[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
MEDICARE ADVANTAGE HEARING ON PROMOTING
INTEGRATED AND COORDINATED CARE
FOR MEDICARE BENEFICIARIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JUNE 7, 2017
__________
Serial No. 115-HL02
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
33-429 WASHINGTON : 2019
COMMITTEE ON WAYS AND MEANS
KEVIN BRADY, Texas, Chairman
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
DEVIN NUNES, California SANDER M. LEVIN, Michigan
PATRICK J. TIBERI, Ohio JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
VERN BUCHANAN, Florida JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas RON KIND, Wisconsin
ERIK PAULSEN, Minnesota BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee DANNY DAVIS, Illinois
TOM REED, New York LINDA SANCHEZ, California
MIKE KELLY, Pennsylvania BRIAN HIGGINS, New York
JIM RENACCI, Ohio TERRI SEWELL, Alabama
PAT MEEHAN, Pennsylvania SUZAN DELBENE, Washington
KRISTI NOEM, South Dakota JUDY CHU, California
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
TOM RICE, South Carolina
DAVID SCHWEIKERT, Arizona
JACKIE WALORSKI, Indiana
CARLOS CURBELO, Florida
MIKE BISHOP, Michigan
David Stewart, Staff Director
Brandon Casey, Minority Chief Counsel
______
SUBCOMMITTEE ON HEALTH
PATRICK J. TIBERI, Ohio, Chairman
SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
DEVIN NUNES, California MIKE THOMPSON, California
PETER J. ROSKAM, Illinois RON KIND, Wisconsin
VERN BUCHANAN, Florida EARL BLUMENAUER, Oregon
ADRIAN SMITH, Nebraska BRIAN HIGGINS, New York
LYNN JENKINS, Kansas TERRI SEWELL, Alabama
KENNY MARCHANT, Texas JUDY CHU, California
DIANE BLACK, Tennessee
ERIK PAULSEN, Minnesota
TOM REED, New York
C O N T E N T S
__________
Page
Advisory of June 7, 2017, announcing the hearing................. 2
WITNESSES
Gretchen A. Jacobson, Ph.D., Associate Director, Kaiser Family
Foundation's Program on Medicare Policy........................ 6
Cheryl Wilson, RN, MA, LNHA, Chief Executive Officer, St. Paul's
Senior Services................................................ 17
David C. Grabowski, Ph.D., Professor of Health Care Policy,
Department of Health Care Policy at Harvard Medical School..... 27
A. Mark Fendrick, MD, Executive Director, University of Michigan
Center for Value-Based Insurance Design........................ 33
QUESTIONS FOR THE RECORD
Questions submitted by the Minority Members of the Subcommittee
on Health of the Committee on Ways and Means to A. Mark
Fendrick, MD, Executive Director, University of Michigan Center
for Value-Based Insurance Design............................... 68
Questions submitted by the Minority Members of the Subcommittee
on Health of the Committee on Ways and Means to David C.
Grabowski, Ph.D., Professor of Health Care Policy, Department
of Health Care Policy at Harvard Medical School................ 71
Questions submitted by the Members of the Subcommittee on Health
of the Committee on Ways and Means to Gretchen A. Jacobson,
Ph.D., Associate Director, Kaiser Family Foundation's Program
on Medicare Policy............................................. 73
Questions submitted by the Minority Members of the Subcommittee
on Health of the Committee on Ways and Means to Cheryl Wilson,
RN, MA, LNHA, Chief Executive Officer, St. Paul's Senior
Services....................................................... 79
SUBMISSIONS FOR THE RECORD
ACAP, Association for Community Affiliated Plans................. 84
ACHP, Alliance of Community Health Plans......................... 87
American Hospital Association (AHA).............................. 91
America's Health Insurance Plans (AHIP).......................... 95
Better Medicare Alliance (BMA)................................... 104
Commonwealth Care Alliance (CCA)................................. 113
DRIVE Health Initiative.......................................... 117
EmblemHealth..................................................... 122
Genesis Healthcare, Incorporated................................. 128
Healthcare Leadership Council (HLC).............................. 133
National MLTSS Health Plan Association........................... 136
National Association of ACOs (NAACOS)............................ 141
National PACE Association........................................ 142
National Center for Policy Analysis (NCPA)....................... 145
SCAN Health Plan (SCAN).......................................... 153
Special Needs Plan (SNP) Alliance................................ 155
Altarum Institute................................................ 163
MEDICARE ADVANTAGE HEARING ON
PROMOTING INTEGRATED AND
COORDINATED CARE FOR
MEDICARE BENEFICIARIES
----------
WEDNESDAY, JUNE 7, 2017
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to call, at 1:59 p.m., in
Room 1100, Longworth House Office Building, Hon. Pat Tiberi
[Chairman of the Subcommittee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
Wednesday, June 7, 2017
HL-02
Chairman Tiberi Announces
Medicare Advantage Hearing on Promoting
Integrated and Coordinated Care
for Medicare Beneficiaries
House Ways and Means Health Subcommittee Chairman Pat Tiberi (R-
OH), announced today that the Subcommittee will hold a hearing to
review the current status of Medicare Advantage programs such as
Special Needs Plans, other models like the Program for All-Inclusive
Care, and emerging models that allow for increased flexibility and
value-based insurance design that are designed to deliver integrated
and coordinated care for our most vulnerable seniors and people living
with disabilities. The hearing will take place on Wednesday, June 7,
2017, in room 1100 of the Longworth House Office Building, beginning at
2:00 p.m.
In view of the limited time to hear witnesses, oral testimony at
this hearing will be from invited witnesses only. However, any
individual or organization may submit a written statement for
consideration by the Committee and for inclusion in the printed record
of the hearing.
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Note: All Committee advisories and news releases are available at
http://www.waysandmeans.house.gov/
Chairman TIBERI. The Subcommittee will come to order a
minute early, the record will show.
Welcome to the Ways and Means Subcommittee on Health
hearing on ``Promoting Integrated and Coordinated Care for
Medicare Beneficiaries.'' It is my pleasure to welcome our four
witnesses today as we continue our discussion on the Medicare
program and the different integrated care delivery systems
offered to our seniors, including those up for extension this
year.
The Committee continues to look at ways to reform Medicare
and improve the delivery of care for our seniors and people
living with disabilities. I think this is a good place to
start. It is looking at some of the lessons learned from
smaller programs that have offered targeted coordinated care to
some of the most frail and sick beneficiaries in our Medicare
program.
Today is a great opportunity for us to hear about some of
the impediments to providing value-driven care for the
population and hear solutions that have not only benefited
seniors, but taxpayers as well.
PACE, or the Program for All Inclusive Care for the
Elderly, is an integrated care program that provides hands-on
long-term care and support to beneficiaries who need an
institutional level of care but continue to live at home.
Although this program offers seniors and their caregivers a
great opportunity to stay in the community and receive the care
they need, the criteria for entering a PACE organization
remains very restrictive. Additionally, the regulatory and
administrative burdens of operating a PACE facility can often
make it difficult for PACE organizations to expand and grow to
serve more beneficiaries.
Another integrated care option for vulnerable seniors is
the special needs plans, or often called SNPs. Congress must
act by the end of this year to reauthorize SNPs in order for
seniors to continue to have access. Yet, we continue to find
challenges surrounding care coordination and delivery in
certain types of SNPs.
Due to the lack of integration of benefits and
administrative burden of offering a SNP, CareSource, a managed
care plan offered in my district, has delayed offering SNPs in
their current form. While continuing to offer other insurance
products that serve dual-eligible beneficiaries, CareSource
finds the integrated model that they are using in northeastern
Ohio to be better, more effective, and a more efficient model
to serve dual-eligible beneficiaries, one that reduces provider
burden and ensures that a patient receives the care and support
needed to meet their total healthcare needs.
Today, we will hear from our panel of experts on the
benefits and challenges to PACE and SNP operations as well as
its enrollees. We will also explore different bipartisan
options for changes to these key programs and others within the
Medicare Advantage space, such as value-based insurance design,
that are needed to increase efficiencies, quality, beneficiary
experience, and enrollment.
As the Medicare population continues to grow, it is
important that we continue to look at how we can move from
volume to value based across all parts of our Medicare program.
Today, we will hear about how we can allow more plan
flexibility within the MA space through incentivizing the use
of high- versus low-value care and have the potential to lead
to lower costs for both taxpayers and beneficiaries while
improving health and quality outcomes.
I now yield to our distinguished Ranking Member, Mr. Levin,
for the purposes of an opening statement.
Mr. LEVIN. Thank you very much, Mr. Chairman, for holding
this hearing.
I would like also, as you did, to thank our witnesses for
joining us today. We have an impressive panel that has prepared
a number of thoughtful comments and recommendations. I am
pleased to see that it includes a fellow Michigander.
This hearing is about new models to coordinate and
integrate care for Medicare beneficiaries, especially those who
are dually eligible for Medicare and Medicaid. These 11 million
Americans are among the most vulnerable members of our society.
More than 40 percent are under 65 and live with disabilities
and many have very complex healthcare needs. In the past, we
have had a bipartisan commitment to providing high-quality care
for this population, and hopefully this will continue.
Unfortunately, the recent actions of my Republican
colleagues suggest that this may no longer be the case. Last
month, the House passed an ACA repeal bill that would slash
Medicaid by more than $800 billion over the next decade, and 2
weeks ago President Trump proposed a budget that would further
cut Medicaid by $600 billion.
These cuts would have a major impact on the people who are
the subject of this hearing. Cutting Medicaid will hurt those
11 million Medicare beneficiaries who are dually eligible for
both programs and who depend on Medicaid to provide services
and cover expenses that Medicare doesn't. For example, Medicaid
reduces out-of-pocket costs for low-income beneficiaries and
pays for important services that Medicare does not cover,
including long-term care.
Ending the ACA's Medicaid expansion and switching to per
capita caps or block grants would shift health costs onto
beneficiaries and leave many without Medicaid coverage at all.
This will reduce access to care and put financial strain on
low-income seniors and people with disabilities. I hope we
spend time this afternoon discussing this important issue.
We are also here to examine three specific models for
delivering care to Medicare Advantage enrollees. Special needs
plans are the most prominent of the models we will discuss
today. Currently, nearly 2.3 million Americans receive coverage
through these plans, which are tailored to the needs of
specific populations of beneficiaries. Special needs plans are
particularly important to those who are eligible for both
Medicare and Medicaid.
Authorization for the program, as you said, Mr. Chairman,
expires next year, and I look forward to working in a
bipartisan way on an extension that maintains quality while
promoting better care and stronger protection for
beneficiaries.
We will also discuss PACE. This model has shown promising
results by providing coordinated care to frail elderly
populations. Although its footprint is small, PACE has allowed
thousands of Americans to maintain their independence by
providing nursing home-level care in community settings.
As we consider the future of this model, our focus must be
on ensuring that quality remains high and that we do not
sacrifice our standards in the interest of expansion. This is
particularly important now that for-profit enterprises are
eligible to participate in PACE.
Both of these models, special needs plans and PACE, help
provide care for beneficiaries who are relying not only on
Medicare but also on Medicaid.
Finally, we will discuss value-based insurance design, or
VBID, a proposal to reduce healthcare costs by promoting high-
value care. This model is in its infancy in Medicare, and we
still need to learn more about its impacts on the program and
on beneficiaries. To be a success, VBID must show meaningful
improvements in efficiency without reducing access to necessary
services. I hope to hear more from our witnesses, from all of
you, about our options for this model moving forward.
Once again, I thank the Chairman and the panel for joining
us. And I look forward to very constructive back-and-forth.
Thank you, Mr. Chairman.
Chairman TIBERI. Thank you, Mr. Levin.
Without objection, each of our Members' opening statements
will be made part of the record.
With that, I would like to introduce today's witnesses.
First, we will hear from Ms. Gretchen Jacobson, Associate
Director of the Program on Medicare Policy at the Kaiser Family
Foundation.
Thank you for joining us today.
Next, we will hear from Ms. Cheryl Wilson, Chief Executive
Officer at St. Paul's Senior Services.
I appreciate you traveling all the way from California to
be with us.
After Cheryl, we will hear from Mr. David Grabowski, a
professor at Harvard Medical School and recent MedPAC
appointee.
Congratulations, by the way, on that appointment. We look
forward to working with you on other Medicare policies that
come before this Committee in the future as well.
And last but not least, from what we in Ohio call the State
up north, from the school up north, Dr. Mark Fendrick from the
University of Michigan.
Is that your son behind you? Is he an Ohio State guy?
Dr. FENDRICK. Michigan State.
Chairman TIBERI. I like that. Very good. I like that.
Mr. LEVIN. Say that again.
Dr. FENDRICK. Michigan State.
Chairman TIBERI. Michigan State. I like Michigan State.
Dr. Fendrick is Director of the Center for Value-Based
Insurance Design at the University of Michigan. He is also
professor of internal medicine at the School of Medicine and
professor of health management and policy at the School of
Public Health at the University of Michigan. He received his BA
from the University of Pennsylvania, however--that is good--and
his MD at Harvard Medical School.
So welcome all of you. As you can notice, I am in a little
rush, because we have to go vote.
I think what we will do now, if everyone agrees, we will go
vote, we will come back, and then we will hear from Ms.
Jacobson and the rest of you shortly. Sorry for the little
break. But with this, we are going to break for a little bit,
and we will be back.
[Recess.]
Chairman TIBERI. Our hearing will resume, and we will get
right to our witnesses.
First up, Ms. Jacobson, again from the Kaiser Family
Foundation. You are recognized for 5 minutes.
STATEMENT OF GRETCHEN A. JACOBSON, PH.D., ASSOCIATE DIRECTOR,
KAISER FAMILY FOUNDATION'S PROGRAM ON MEDICARE POLICY,
WASHINGTON, DC
Ms. JACOBSON. Mr. Chairman and Members of the Subcommittee,
I am Dr. Gretchen Jacobson of the Kaiser Family Foundation. I
am honored to be here this afternoon to testify on the topic of
promoting integrated and coordinated care for Medicare
beneficiaries.
Over the years, the Medicare program has developed and
continues to test new approaches for integrating and
coordinating care for high-cost, high-need Medicare
beneficiaries in both Medicare Advantage and traditional
Medicare.
My testimony today focuses on three of these approaches:
Special Needs Plans, the Program of All-Inclusive Care for the
Elderly, or PACE, and Value-Based Insurance Design within
Medicare Advantage. Two of three of these approaches focus on
people dually eligible for Medicare and Medicaid. The 11
million people who are dually eligible for Medicare and
Medicaid comprise about one in five people on Medicare, and
these include many of the sickest and frailest people on
Medicare.
While most dually eligible beneficiaries are in traditional
Medicare, about one-third are in Medicare Advantage plans. This
is a similar share to enrollment among other people in
Medicare. Among dually eligible beneficiaries in Medicare
Advantage plans, about half are in regular Medicare Advantage
plans, and the other half are in Special Needs Plans, or SNPs.
SNP enrollment is limited to beneficiaries with specific
health conditions or to beneficiaries dually eligible for
Medicare and Medicaid. SNPs for dually eligible beneficiaries
comprise the largest SNPs and include about 2 million
beneficiaries in 2017.
While SNPs have been part of the Medicare Advantage program
for over a decade, we know little about what additional
services or benefits enrollees receive, how well plans
coordinate care for high-need enrollees, and the outcomes for
high-need enrollees compared to other care options.
Like SNPs, PACE programs also receive capitated payments
from Medicare. PACE is a provider-based program that was
established in the 1970s and is designed for people who need a
nursing home level of care but want to continue living in their
communities. The extensive literature on PACE suggests that it
increases longevity, reduces nursing home care, and reduces
hospitalizations and emergency room visits. The biggest
challenge with PACE has been its scalability. Most PACE
programs are relatively small.
Value-based insurance design is another approach for
improving the management of patient care in Medicare Advantage
and traditional Medicare. Some have proposed using it to allow
Medicare Advantage plans to enhance benefits for enrollees with
specific health conditions. This would be a departure from
current rules, which require Medicare Advantage plans to
provide the same benefit package to all enrollees regardless of
their health conditions.
This year, CMS began permitting Medicare Advantage plans to
test a value-based insurance design model for specific chronic
conditions. My full testimony raises several questions about
value-based insurance design, the largest of which is who
should really decide which providers and services should be
designated as high value?
Overall it is critical to properly evaluate these programs
not only because of the growing number of people in them, but
also because many of the enrollees are some of the sickest and
frailest people on Medicare. It is important to make sure
delivery systems are supporting them rather than putting them
at risk.
Also, if the programs are shown to be effective, it is
worth exploring how to broaden the programs to include other
people in Medicare Advantage plans and traditional Medicare
with high needs and high costs.
Appropriately managing the care of high-cost high-need
Medicare beneficiaries, many of whom are dually eligible for
Medicare and Medicaid, could help ensure the fiscal
sustainability of both Medicare and Medicaid in the years to
come. At the same time, it remains important to ensure that
adequate protections are in place to retain access to
healthcare services, providers, and quality of care for the
sickest and poorest on Medicare.
Thank you, Mr. Chairman. I would be happy to answer any
questions, and I look forward to working with all Members and
staff of the Subcommittee on these issues in the future.
[The prepared statement of Ms. Jacobson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TIBERI. Thank you, Ms. Jacobson.
Ms. Wilson, you are recognized for 5 minutes.
STATEMENT OF CHERYL WILSON, RN, MA, LNHA, CHIEF
EXECUTIVE OFFICER, ST. PAUL'S SENIOR SERVICES, SAN
DIEGO, CA
Ms. WILSON. Good afternoon. Thank you, Mr. Chairman Tiberi
and Ranking Member Levin and other distinguished Members of the
Subcommittee. I am Cheryl Wilson, Chief Executive Officer of
St. Paul's Senior Services and St. Paul's PACE in beautiful
sunny San Diego. I represent the National PACE Association here
today and their 122 PACE organizations with 233 sites in 31
States serving over 42,000 participants each day.
So what is PACE? PACE is the gold standard for integrated
care. PACE stands for the Program of All-Inclusive Care for the
Elderly, a community-based health and social services provider
which receives a capitated payment rate to serve a frail set of
Medicare eligible frail seniors all of whom are at nursing home
level of care but are still being cared for at home by the PACE
team.
We are an insurance company and a care provider. The
average participant is 77 years old and lives with multiple
chronic, very complex conditions limiting their activities of
daily living. Fifty percent have some form of dementia, but
through PACE 95 percent live at home. Even more challenging at
St. Paul's PACE, 50 percent of those we serve live at home all
alone.
Along with our PACE, St. Paul's Senior Services is a full
service, nonprofit organization established in 1960. We provide
retirement homes, HUD housing, assisted living, memory care,
day programs, skilled nursing, and now housing for homeless
seniors.
PACE keeps frail seniors in their homes and communities by
providing timely, clinically appropriate treatments and social
supports. PACE participants experience a high quality of life
and optimal medical outcomes with lower costs.
Two weeks ago I had lunch with a lady enrolled in our PACE
program. She had all her belongings wrapped securely in a
plastic bag. She told me her ``other stuff'' was outside all
wrapped up because of ``bugs.'' She shared with me her multiple
major medical conditions and her inability to get out to
grocery stores or to her doctors for visits. Thus, she had a
history of visiting the emergency room every 2 to 3 months,
which she hated because of the long waits, ``all the hubbub,''
and the fact that no one ever spoke to her, rather only about
her and over her.
She said she was getting to like the PACE staff, but it was
taking time to believe that they could be so nice and really
mean it. In fact, this participant had spent the first 3 weeks
in PACE sitting outside the building with care being delivered
either to her at home or on the bench outside due to her
paranoia and fear of exploitation.
She finally agreed to have her home treated for bed bugs
and other infestations, to receiving personal care, and to
having her belongings wrapped up until she was willing to give
them up for 3 days of freezing, which was needed to eliminate
all the infestations.
In the meantime this lady was provided with home care, home
delivered meals, daily home medications, twice weekly personal
care at the PACE center, weekly physician visits, social
services, psychiatric interventions, and many other ancillary
services. In the 4 months she has been with PACE, this lady has
not experienced a single emergency room visit.
In fact, a study we did showed that in the first year of
PACE, patient hospital visits declined 73 percent. PACE serves
many frail elders and individuals with disabilities today but
we could serve many more. The decades old PACE regulations must
be updated immediately. While CMS has issued a proposed rule,
it is yet to issue the final rule.
Similarly CMS could support PACE growth by implementing the
congressionally granted pilot authority to serve new
populations with similar needs and medical complexities. We ask
CMS to move the pilots forward quickly.
Other steps forward are some statutory improvements to
enable PACE to better serve Medicare beneficiaries. PACE has
incorporated many of the reforms promoted by Medicare,
including coordinated care and integrated financing. PACE has
proven to be a good value to taxpayers. If you haven't visited,
please go to visit a PACE site in your State, and if you don't
have a PACE site, ask why.
In all my years in healthcare I know that PACE is the very
best model of care as professed to me by Health and Human
Services Secretary Tommy Thompson over 15 years ago.
Thank you for listening to me, and I look forward to
answering your questions.
[The prepared statement of Ms. Wilson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TIBERI. Thank you. Mr. Grabowski, you are
recognized for 5 minutes.
STATEMENT OF DAVID C. GRABOWSKI, PH.D., PROFESSOR OF HEALTH
CARE POLICY, DEPARTMENT OF HEALTH CARE POLICY AT HARVARD
MEDICAL SCHOOL, BOSTON, MA
Mr. GRABOWSKI. Great. Thank you. Good afternoon. My name is
David Grabowski, and I am a professor in the Department of
Health Care Policy at Harvard Medical School.
I would like to thank Chairman Tiberi, Ranking Member
Levin, and the distinguished Members of the Committee for
giving me this opportunity to speak today.
This testimony is derived in large part from the academic
work I have done related to integrated and coordinated care for
Medicare beneficiaries. Before I begin my substantive remarks,
I would like to emphasize that my comments reflect solely my
beliefs and do not reflect the opinions of any organization I
am affiliated with, including MedPAC, which I was just
appointed to last month.
Mr. Chairman, we all share the policy goal of coordinated,
high-value care for dual eligible and chronically ill Medicare
beneficiaries. Under traditional Medicare fee-for-service dual
eligible beneficiaries have three health insurance cards,
Medicare Part D, and Medicaid, with three very different sets
of benefits.
Ultimately this fragmented model of coverage does little to
encourage cost containment or high-quality care. Under an
integrated model of care, enrollees ideally have a single set
of comprehensive benefits covering a range of services. They
have an individualized care plan with a coordinated team of
health providers that encourages care in less restrictive,
lower-cost settings.
Medicare Advantage Special Needs Plans, or SNPs as they are
called, are one potential way to achieve this type of financial
and clinical integration. SNPs were authorized in 2003 with the
idea of attracting a different type of beneficiary into
Medicare Advantage. Today over 2 million individuals are
enrolled in SNPs, which is greater than the number of Medicare
beneficiaries in all other integrated care programs combined.
SNPs enjoy some unique regulatory advantages. As such, it
is vitally important that we understand whether there is
anything truly special about Special Needs Plans to justify
their unique status.
Two areas where SNPs have the opportunity to provide
benefits are through improved quality, and better integration.
In terms of quality, the research is somewhat mixed when
comparing SNPs with traditional Medicare Advantage plans. The
findings depend on the type of SNP. Institutional SNPs, or I-
SNPs, perform better than other plans on the available quality
measures. Dual eligible, or D-SNPs, perform better when they
are strongly integrated with Medicaid but very similar to other
plans when less well integrated.
Finally, Chronic Conditions SNPs, or C-SNPs, generally
perform no better, and often worse, when compared to other
plans.
In terms of integration, if the dual eligible SNPs are
going to offer a truly integrated product, they need to both
clinically and financially integrate with Medicaid.
As a bit of history, the first generation of D-SNPs had
little integration with Medicaid. Beginning in 2008, the D-SNPs
were required to have a contract with Medicaid. In response,
most D-SNPs simply established a contract for case management
of Medicaid services. Today most D-SNPs are still not at risk
for Medicaid spending or accountable for Medicaid outcomes.
This is not true integration.
Moving forward, Mr. Chairman, I want to highlight four
areas of opportunity for Medicare policy.
First, all D-SNPs should be both clinically and financially
integrated with Medicaid, otherwise it is hard to make a case
for this model over regular MA plans.
Second, SNPs must show that they offer higher quality to
beneficiaries. If certain models like C-SNPs do not generally
perform better than regular Medicare Advantage plans, we need
to reconsider whether this model is working for beneficiaries.
Third, payments to SNPs for those full duals should be
commensurate with the cost of covering these individuals.
Historically risk adjustment has not properly accounted for the
frailest beneficiaries. CMS recently adjusted payments upward
for the full duals to address this issue. I would encourage
continued oversight on the adequacy of payments and risk
adjustment.
Finally, relative to other models like PACE and the V-BID
demonstration, SNPs have not been comprehensively studied by
CMS in over a decade. If we are going to continue to put public
dollars into this program we need a more rigorous and nuanced
understanding of which SNP models work for which Medicare
beneficiaries.
In summary, the theory of integrated care underlying the
SNPs is incredibly compelling. In practice, however, we have
not achieved meaningful integration in a majority of SNPs to
date. Reforms that encourage true integration will help ensure
high-value care for our frailest Medicare beneficiaries.
Thank you, Mr. Chairman. I look forward to your questions.
[The prepared statement of Mr. Grabowski follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TIBERI. Thank you. And last but not least, the
gentleman from up north, as you would say in Ohio, Dr.
Fendrick, you are recognized for 5 minutes.
STATEMENT OF A. MARK FENDRICK, MD, EXECUTIVE DIRECTOR,
UNIVERSITY OF MICHIGAN CENTER FOR VALUE-BASED INSURANCE DESIGN,
ANN ARBOR, MI
Dr. FENDRICK. Good afternoon, and thank you Chairman
Tiberi, Ranking Member Levin, and Members of the Subcommittee.
I am Mark Fendrick, a practicing primary care physician and a
professor at the University of Michigan. Go Blue.
Mr. Chairman, I applaud you for holding this hearing
because access to quality healthcare and containing Medicare
costs are among the most pressing issues for our national well-
being and economic security.
Moving Medicare Advantage from volume driven to a value-
based program requires a change in both how we pay for care and
how we engage consumers to seek care. Yet before today's
hearing little attention has been directed to how we can alter
beneficiary behavior to make MA more effective and efficient.
Today I urge you to support the bipartisan effort to allow
MA plans across the country to incorporate value-based
insurance design to help members become better healthcare
consumers.
I could tell you with great confidence that my Medicare
patients could care less how much the Federal Government spends
on healthcare. But they do care deeply about the amount they
have to pay out of pocket to get the care they need.
With rare exception, MA plans implement cost sharing in a
one-size-fits-all way and each beneficiary is charged the same
amount for every doctor visit, every diagnostic test and
prescription drug. People ask me all the time whether the
amount of cost sharing faced by MA members is too high or too
low.
The answer, as every clinician knows, is it depends. But
asking MA members to pay more for all services despite clear
differences in clinical value results in decreases in the use
of essential care, the care I beg my patients to do. And this
cost-related nonadherence negatively impacts our most
vulnerable patient populations. So I see this blunt one-size-
fits-all approach as penny wise and pound foolish.
Does it make sense to you, Mr. Chairman, that my MA
patients pay the same copayment to see a cardiologist after a
heart attack as to see a dermatologist for mild acne or pay the
same prescription drug copayment for a life-saving drug that
treats diabetes, cancer, or depression as one that makes
toenail fungus go away? Realizing that MA beneficiaries use too
little high-value care and too much low-value care, I endorse a
clinically nuanced cost-sharing approach as a potential
solution.
Clinically nuanced value-based insurance designs set
consumer cost-sharing levels to encourage the use of high-value
services and providers and discourage the use of low-value
care.
For the record, I support high cost-sharing levels but only
for those services that do not make MA beneficiaries any
healthier. Led by the private sector, V-BID is implemented by
hundreds of public and private employers, several States, and
will soon be incorporated into the TRICARE program. The
integration of V-BID into MA has garnered broad multi-
stakeholder and rare bipartisan support.
I would like to acknowledge Subcommittee Members Diane
Black and Earl Blumenauer whose bipartisan leadership on this
issue led to the 2015 announcement of the MA V-BID model test,
a 5-year program that allows designated plans now in seven
States to reduce cost sharing for specific services and
providers, but only for those beneficiaries with specified
chronic conditions.
In January of this year, nine MA plans successfully
launched disease-specific programs combined with enhanced
benefits to help people manage their chronic diseases.
Responding to interest from MA plans in other States, CMS added
three more States to the demo starting next year. So due to the
V-BID success in the private sector, the TRICARE pilot, and
nationwide interest in the MA V-BID model test, bicameral,
bipartisan legislation has recently been introduced to allow MA
plans in all 50 States the flexibility to allow MA plans to set
beneficiary cost-sharing levels on clinical value, not price of
medical services.
It is my hope that the Subcommittee supports the national
expansion of V-BID and MA, which when coupled with other
promising integrated models like the PACE program discussed
today, could result in a healthier Medicare population, which
motivates me as a physician, and more efficient Federal
expenditures, thus serving the best interests of American
taxpayers and future beneficiaries.
So it is my great pleasure to support the Medicare program,
and I am happy to work with the Subcommittee further and look
forward to hearing your comments and answering your questions.
Thank you.
[The prepared statement of Dr. Fendrick follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TIBERI. Thank you, Doc. Not bad for a Michigan
guy.
Dr. FENDRICK. Thank you.
Chairman TIBERI. Ms. Wilson, just a thought on the PACE
program.
I think we all agree that most of us as we age and become
elderly would prefer to remain in our homes. Ensuring that
Medicare beneficiaries have the option to safely stay in their
homes along with the right support system is obviously
important, but it often requires a dedicated caregiver who can
help with household needs or transportation or meals.
Caring for that elderly family or friend can be awfully
difficult at times and can take a toll both mentally and
physically and sometimes actually financially.
Can you expand on that, comment on that, and give us your
thoughts?
Ms. WILSON. One of the challenges is to keep the person,
the participant, the patient at home because that is where they
want to be, but it is challenging.
Ninety-five percent of all PACE participants, however, do
live at home, and that is across the country. The way that
happens is because the interdisciplinary team meets on a daily
basis and the needs of that person at home are just as
important as the medical conditions that are treated once they
come into the clinic. So taking care of things at home, such as
meals, housecleaning, grab rails in the bathroom so people
don't fall, all of those things, are very important.
The social components of healthcare are just as important
to save dollars on the healthcare side and to make keeping
somebody at home efficient and effective is the key to PACE.
Chairman TIBERI. Mr. Grabowski and Ms. Jacobson, if you can
comment on this, you specifically spent quite a bit of time in
your testimony on the dual eligibles.
Dual eligibles are auto assigned Medicare prescription drug
plans in several States, including my own State of Ohio, and
they are allowed to auto enroll dual eligible beneficiaries
with opt-out parameters in the D-SNPs specifically. Can auto
assignment lead to higher beneficiary enrollment in your
opinion and can auto assignment be used as an incentive maybe
to fully integrate their benefits in the D-SNPs?
Mr. GRABOWSKI. Yes, maybe I will start. There was actually
some early experience with auto enrollment or passive
enrollment in the SNPs.
Several States actually had their beneficiaries, Texas,
would be an example, Arizona, Minnesota, about 50,000
beneficiaries were automatically or passively enrolled into the
D-SNPs. So there was some early experience that it actually
worked. I think it can increase enrollment numbers. I would be
wary of saying it is going to get everyone enrolled, but it
will get a broader selection of individuals in, so it gets
around some of the risk selection issues that many of us have
been so concerned about with plans cherry-picking or attracting
certain types of beneficiaries.
I would point, however, to the work we have done on the
financial alignment initiative, the CMS demonstrations for the
duals. We looked at eight States, and all of those eight States
used passive enrollment or auto enrollment, and it turned out
only about 25 percent of eligible duals stuck. So that means
that 75 percent opted out. You will be happy to hear, Mr.
Chairman, the State that did the best was Ohio actually.
Chairman TIBERI. Wow.
Mr. GRABOWSKI. Yes. About two-thirds of beneficiaries
remained in the dual demo. Ohio did a very clever thing by
first enrolling individuals passively into Medicaid in a first
stage, and then doing Medicare in a second stage.
On the other end of the spectrum, New York had the lowest
enrollment at 5 percent. There, they coupled their enrollment
process with counseling and required each new beneficiary to
actually go through counseling. That turned out to be a mistake
in that a lot of individuals didn't want to undertake the
counseling, and hence, opted out of the program.
Chairman TIBERI. Okay.
Mr. GRABOWSKI. So I guess passive enrollment will work to
bring enrollees in. It will bring in a more diverse group of
enrollees. I think the challenge is that it won't get everyone,
and I do think how you design the passive enrollment, the Ohio/
New York difference, really matters.
Thank you.
Chairman TIBERI. Ms. Jacobson.
Ms. JACOBSON. I agree. The financial alignment models do
provide a precedent for this. You do need to really consider,
though, that more than half of dual eligibles have some sort of
mental impairment or cognitive impairment. So it is really
important to consider not only that they have a method of
opting out, but also, that they know about it and that they are
aware of it.
And this is very difficult when you are talking about a
population with schizophrenia, Alzheimer's disease and other
mental illnesses to make sure that they really understand they
have another option that they can go to.
Chairman TIBERI. Great point. Doc, you mentioned the CMS V-
BID demonstration, and in your opinion, if you could expand on
it, the demonstration is set up in a way that allows Medicare
Advantage plans the necessary flexibility for them to reach the
full benefit of the V-BIDs?
Dr. FENDRICK. So that is a great question, and it is
important to point out that, as mentioned in Dr. Jacobson's
remarks, when Medicare was introduced in 1965 one of the
foundations was this nondiscrimination clause that every
American in Medicare have the same benefit design, and it, as
all clinicians, and like Representative Black, know, medicine
is unbelievably personalized and moving rapidly in that
direction down to the level of the gene.
So we have argued that people should be treated differently
and given access to different care, most notably an eye exam,
which should be more easily accessed by someone who has
diabetes than someone who doesn't. And it was quite a task, and
I thank this Subcommittee for the leadership to have this
waiver be the first ever to allow a Medicare recipient with a
specific condition to have a different benefit design than
someone else, allowing precision medicine to be aligned with
benefit design. So important step forward.
Three of the States that are expanding to next year are
represented on this Committee, and I think that there is
movement afoot by CMMI to allow greater flexibility and uptake
of these programs, most notably one is that the conditions are
designated by CMMI. I think the plan should have a little bit
more flexibility to decide which population should be available
to have greater access to certain services and providers.
I think that we should allow the plans to expand the
services that they can reduce cost sharing for across the
entire spectrum of care, and I think given that the fiscal
responsibility that we must attend to with any changes in
Medicare is to say we can't always spend more, we often have to
cut back.
And given that most of the blunt instruments get people to
use less of all care, I think it is important now for Medicare
to walk very slowly and carefully into the area of reducing the
hundreds of billions of dollars of Medicare expenditures that
don't make one beneficiary any healthier.
There is a new initiative called the Choosing Wisely
program, which has launched over 40 clinical specialty
societies, naming specific services that maybe we are doing too
often and spending too much money on. So broader spectrum of
services, more flexibility on the specific conditions and to
start to pay attention to the fact that while the best part of
the demo is making high-value services more accessible, to be
fiscally responsible we have to start thinking about clinically
driven reduction of low-value care.
Chairman TIBERI. Thank you. With that, Mr. Levin is
recognized.
Mr. LEVIN. Thank you, and, again, welcome. Just a word on
integration. As I look about us, the four of us Democrats on
the Committee at the time of ACA were in the vanguard of those
who sought to have more integration, more bundling, all kinds
of concepts. And some of that was built into ACA in part I
think because of the efforts of some of us here on the
Committee.
Let me just say a word about the interaction between
Medicare and Medicaid because when we have been debating
healthcare reform there has been very little attention to that.
So I would like us, I guess, Ms. Jacobson, you referred to
it and others might comment, just how important it is and the
potential impact of reduction of Medicaid on dual eligibles and
others who are in like positions.
If you could, it can be complicated, but I think it can
also be stated rather clearly. Why don't you try? What is at
stake when we talk about dramatic decreases in Medicaid as in
the bill that passed here and then the President's proposal for
an additional, what, $600 billion?
Ms. JACOBSON. Okay. Like you said, this is a very
complicated issue and could have a wide range of effects. One
thing that a per capita cap like that would do is it does lock
in historic spending.
So, for example, while it would adjust for the changes in
the number of people who may be on the program, it would not
necessarily adjust for the services that a State may want to
provide to the people in the program. So, for example, if it
would like to shift more people into community-based services,
which seniors prefer, it may not have the financial flexibility
to do so without cutting back on other benefits. It would be
more of a tradeoff financially for a lot of States because the
mix of services they provide to some extent would be
constrained.
It would affect, most importantly to note, that one in five
people on Medicare who also receive benefits from Medicaid most
of whom received cost sharing and full Medicaid benefits, as
well. So this would affect a significant share of people on
Medicare.
Mr. LEVIN. Does anybody else want to comment on that? Mr.
Grabowski.
Mr. GRABOWSKI. Sure. I assume we will talk a lot today on
the adequacy of payments on the Medicare side of the SNPs. If
we are not contributing enough on the Medicaid side, if there
are shortfalls there, that is also going to lead to access
problems, quality of care problems, and a lot of my research
has suggested when you underfund Medicaid that causes
spillovers to Medicare.
So you underfund nursing home care or care in the home or
the community, that leads to more Medicare-financed
hospitalizations for dually eligible individuals. So to think
about these programs as being in their own silos is a mistake.
For the dually eligible individuals, how we finance and
deliver Medicaid services matters for Medicare spending and
outcomes, and the opposite obviously is true, as well. How we
pay for and deliver Medicare services matter for Medicaid
outcomes and spending. They are linked, and so you can't think
about them separately. So any kind of cut in Medicaid will have
impacts for the Medicare program as well as for the dually
eligibles.
Mr. LEVIN. Anybody else want to comment on that?
Ms. WILSON. Medicaid pays about 65 percent of a PACE
participant's capitated rate, and so Medicaid is a very
important piece. I think each State will have to look deep into
their souls and decide how those Medicare dollars are going to
be expensed into which populations because there are many
populations other than seniors who receive Medicaid funds.
I think it is going to be a very difficult decision, and I
think those of us who serve seniors will be faced with very
difficult decisions. And I think we will have to be very
creative because I don't see any of us wanting to cut back on
any services for seniors going forward.
Mr. LEVIN. Thank you.
Chairman TIBERI. Thank you. Before I recognize Mr. Roskam I
just want to remind Members that we do not have jurisdiction,
though we would love to have jurisdiction in the Medicaid
program, Mr. Walden and Dr. Burgess would not like that, so if
we could kind of focus within our jurisdiction.
With respect to that, Mr. Roskam is recognized for 5
minutes.
Mr. ROSKAM. Thank you, Mr. Chairman. Admonition received.
June is Alzheimer's and brain awareness month, and it is no
surprise to anybody on this panel the devastating nature of
this disease. It is the sixth leading killer in the United
States, 5 million Americans are suffering from it, and some
folks suggest that it is the most expensive disease in the
United States that people are suffering with.
One of our colleagues, Representative Sanchez, and I have
been working on legislation that would authorize a CMS
demonstration in terms of a general approach on this. So that
is all to say there is a lot of interest in how all these
things have an interaction with Alzheimer's in particular.
Dr. Jacobson, what is your insight or what is your
perspective on how many Alzheimer's patients are enrolled in
SNPs, and in your opinion what are the benefits that these
plans have for Alzheimer's patients and their families based on
your experience?
Ms. JACOBSON. We actually don't have the data on how many
Alzheimer's patients are enrolled in SNPs. That is possibly
something that we could look into and I could get back to you
or your staff after this hearing.
Mr. ROSKAM. Okay. That would be helpful.
Ms. JACOBSON. Yes. So we really don't know to what extent
what additional services and benefits are being provided to all
SNP enrollees, including people who have Alzheimer's. So it is
really difficult to say what they are actually receiving that
is helping them in these SNPs.
Mr. ROSKAM. Anybody else have a perspective on that?
Ms. WILSON. In PACE, 50 percent of our population has some
form of dementia or Alzheimer's disease, and it is a challenge.
It is truly a challenge. So moving forward we need to deal with
this. We are dealing with it very well in the PACE program
right now. We are able to still keep those people at home. And
as I mentioned before, some of them are living alone at home,
but it is something that we are seeing as a future problem as
the population grows.
Mr. ROSKAM. Okay.
Mr. GRABOWSKI. Although we can't give you the exact number,
there are undoubtedly a number of individuals with dementia in
the different SNP models. I can say there are very few chronic
condition SNPs focused just on dementia.
The majority of the C-SNPs are focused on diabetes. I think
just given the prevalence here we actually need to do better
across the board in dementia care. I don't think a specialized
model is really the way forward. I would prefer to see all
Medicare Advantage plans get better at dementia care. Trying to
build more specialized models I don't think is the best path
forward just given the numbers you already cited.
Mr. ROSKAM. Okay. Dr. Fendrick.
Dr. FENDRICK. Briefly, just for the reasons that you seek,
Mr. Roskam, I was very pleased to see that not only were three
States added to the V-BID demo for 2018, but two conditions
were added, as well, which dementia was one.
So we are very hopeful since many of the States represented
on this Subcommittee are actually in those demo States, the
seven original States, and Michigan, Alabama, and Texas all
represented here would talk to their Medicare Advantage plans
to encourage them to step away from diabetes, heart disease,
COPD, the more common conditions now in the current demo and
think outside the box and move to explore a V-BID MA dementia
model that would, I think, lead to the increase in care that
you are looking for.
Mr. ROSKAM. Okay. Thank you, all. Mr. Chairman, I yield
back.
Chairman TIBERI. Ms. Sewell, you are recognized for 5
minutes.
Ms. SEWELL. Thank you, Mr. Chairman. Today we are talking a
lot about saving costs and increasing value in the Medicare
program. The reality is that we are not going to save costs in
the long run if we don't improve outcomes.
For our most vulnerable Medicare beneficiaries, especially
our dual eligible, transportation barriers are often linked to
poor outcomes.
My office gets calls from seniors in my district who face
both transportation and financial barriers to accessing basic
healthcare services. Whether you are an urban or rural
resident, if you are disabled and elderly with limited income
and no access to a car or public transportation, even a few
blocks can be the difference between you going to the doctor or
not.
My constituent Eva is 81 years old. She is dual eligible.
In Selma, my hometown, Selma, Alabama. She is a diabetic, and
when she has to go to the doctor, having no transportation, she
really depends upon the neighborhood boys to drive her there.
When Miss Eva's Social Security check doesn't make ends
meet, she can't afford to pay the neighborhood boys to take her
to the doctor, so she misses many appointments. In addition to
diabetes, Miss Eva has a disease that doesn't allow her to cut
her own toenails, a more advanced stage of diabetes. And so,
often many times she has to continue to have this very painful
procedure done. She can't get it done at home because they are
so afraid that something would go wrong with her diabetes, and
so she can't walk oftentimes.
For diabetes, foot care cannot be ignored like that of Miss
Eva. She often ends up at the emergency room having no
transportation.
Mr. Chairman, stories like Miss Eva's are more common than
they are rare. This is not sustainable for patients or for the
system as a whole. As I have said before, we aren't going to
reduce costs until we improve outcomes.
Had Miss Eva been enrolled in a plan that provided
transportation services or had been educated on the resources
available to her through non-emergency medical transportation,
her emergency room visits would have been prevented.
As you mentioned, Ms. Wilson, PACE organizations provide
care in the home and transportation services to providers in
the community. PACE organizations expand and improve on other
services available which are often inaccessible for frail and
elderly populations like Miss Eva.
The PACE program, however, is a very small program in my
home State of Alabama, and, in fact, only services 200
Alabamians and is not available in Selma, Alabama, so Miss Eva
cannot take part in it.
My question is to you, Ms. Wilson: In your testimony you
talked about a story about a lady enrolled in your PACE program
that made me think of Miss Eva, and I know that in California
you have access to a broader range of transportation than we do
in Alabama.
And my question is, do you believe that there are areas
around the country where the PACE program would not work or
where the program has not been successful? Likewise, what are
the greatest barriers to expansion of the PACE program or
Special Needs Plans in rural communities like Selma?
Ms. WILSON. Thank you for that example. That is very
touching.
Transportation is very definitely one of the greatest needs
for our seniors because it isolates them. They can't get to the
grocery store, they can't get to the laundromat, they can't get
to the doctor. And emergency room visits are the response to
that. So you are absolutely right. Transportation can be
provided by PACE. Can PACE be provided in Selma? PACE can be
provided anywhere.
Ms. SEWELL. So rural communities are not being managed,
even though when you look at where your programs are, where the
PACE programs are they are mostly in urban areas and not in
rural communities.
Ms. WILSON. There are quite a few in rural communities. It
started as a pilot project under CMS, and they have been very
successful.
And most of those services are provided in the home with
professionals going to the home because travel distances are a
little bit longer than in urban areas, but still the services
needed to be provided, and they are provided more often by
community service providers rather than PACE employees doing it
in the center itself.
So I would encourage you to encourage your State. Part of
the problem with the difficulty in starting new programs is the
cost and the timeframes to start new programs, and if we could
all work with our State Representatives and also with the CMS
representatives to help speed up the process, there would be
many more PACE programs across the country.
Ms. SEWELL. Thank you very much. I yield back.
Chairman TIBERI. Thank you. Mr. Smith is recognized for 5
minutes.
Mr. SMITH. Thank you. Thank you to our witnesses here
today, and certainly I appreciate the perspective.
My colleague just raised some concerns about rural areas
and perhaps the flexibility. I know that flexibility in general
has afforded a lot of Americans within Medicare Advantage some
options, and I think that is helpful, but it certainly hasn't
really provided as many options for what I would say are rural
residents and then residents of very remote areas, and
sometimes those services just are hard to come by, and whether
it is Selma or whether it is range country in rural Nebraska,
that there are some vast areas there that I hear, you know,
from various seniors their concerns.
But I am just wondering if you would like to elaborate at
all on what was already asked or what other innovative ideas
you might have, Mr. Grabowski, or Dr. I guess it is, if you
would care to elaborate?
Mr. GRABOWSKI. Yes. So I will start by saying Special Needs
Plans are national models, especially the institutional SNPs,
and the dual eligible SNPs are definitely in all markets. The
chronic condition SNPs are largely concentrated in the south,
but the point you raised is a good one. They are much more
prevalent in urban relative to rural areas.
I think there are two sets of explanations here. There are
supply side explanations and demand side ones. There are a lot
of stories like Miss Eva where I think there is a lot of demand
for these models, and so I think I find that explanation less
compelling. I think it is more of a supply side story, whether
it is payment issues, regulatory, or just the economics of
trying to have a plan that is more diffuse in a rural area.
So I do think this is an area, assuming the models meet the
other criteria we have been talking about today like full
integration with Medicaid and all these other conditions, that
we definitely need to address.
Mr. SMITH. Sure.
Dr. FENDRICK. I think your question brings up this point
about extending healthcare coverage to a broader segment of
healthcare services. As you can see in my testimony, the V-BID
MA demo model focuses on high-value services, high-value
providers, but we worked very, very hard to include expansion
of supplemental benefits. So I see patients like Miss Eva every
week. And if for some reason we figure out a way to get her her
medications or get her specialty visits, but she has no way to
have transportation to them, the whole thing falls apart.
So one of the more interesting aspects as we hope the MA
demo goes nationally, that instead of maybe saying that you
should go to this hospital or use this medication, that maybe
the demos will focus on these supplemental benefits like
transportation and other types of services that may not be
considered in the sweet spot of the realm of typical insurance
designs.
Mr. SMITH. Thank you. Because I think there are a lot of
great stories to tell about overall access and affordability
within the fiscally responsible way. It is just that there are
still some gaps out there. So does anyone else care to comment?
Ms. JACOBSON. Yes. I will also comment that, I mean,
Medicare Advantage plans as a whole, the penetration rate in
places like Nebraska is fairly low, and it is generally lower
in more rural areas. So this really raises the question of,
well, Medicare Advantage plans in certain models like SNPs have
been pretty successful and proliferating in urban areas, but
like you said, they really don't exist as much in rural areas.
So it deserves some consideration of how to develop these
models more broadly and make them more available perhaps to
people on traditional Medicare as we learn more and more about
what actual benefits help people.
Mr. SMITH. Very well. Thank you. I yield back.
Chairman TIBERI. Ms. Chu, you are recognized for 5 minutes.
Ms. CHU. Ms. Wilson, I have visited my local PACE in
Southern California, and I was so impressed by the level of
care that was there. They have 2,300 participants. This is the
program called AltaMed, and they have 2,300 participants
through eight centers in the greater Los Angeles area, 73
percent of which are dually eligible for Medicare and Medicaid.
And I could see that these are some of the most vulnerable
patients.
The average enrollee has nine separate medical diagnoses
and has impairments in four activities of daily living, such as
eating, bathing, walking, and dressing. And nearly 30 percent
of AltaMed's enrollees have Alzheimer's or related dementia.
Eighty-nine percent are from racial and ethnic minority groups,
and 75 percent are monolingual.
AltaMed succeeds because it is dedicated to serving the
entire patient, rather than focusing on one symptom at a time,
and as a result their enrollees have higher immunization rates,
lower emergency room and hospital admission rates and shorter
hospital stays than their peer groups. And 97 percent of
AltaMed's participants are able to remain in their homes with
the assistance of care from PACE providers.
Now, Ms. Wilson, in your testimony you noted the importance
of the interdisciplinary team in the PACE model. Can you
discuss how patients with co-morbidities like the majority of
patients served by AltaMed are served by this interdisciplinary
team?
Ms. WILSON. Yes. The interdisciplinary team is the heart of
PACE. It is a group of 11 professionals, most with advanced
degrees, who sit around the table and discuss each and every
patient and each and every condition or situation that may come
up with that particular patient. And everybody there is a part
of the team, an equal partner, including the driver, including
the nurse attendant, including the physician, the physical
therapist, the dietician, the master's level social worker, the
recreational therapist.
All of those people sit around the table and more as is
needed, and they make decisions about the person in the best
interests of the person, not in the best interests of the
finances of the organization, not in the best interests of
staff. Sometimes the family's best interests also weigh
heavily, how will the family deal with the situation that is
under consideration? And so the interdisciplinary team is the
heart of the program.
When I first started becoming involved with PACE, having
been in healthcare for many, many, many years, I thought oh, my
gosh, think of all the dollars that are sitting around that
table every morning, and I didn't really think that was going
to be a good use of many professionals' time.
Over the 10 years that we have been providing PACE, I have
absolutely changed my mind. It is the heart of the program. It
is the reason that PACE is so effective, and it is the reason
that it is cost effective because the care is given at the
level that is needed before there is a major crisis which
necessitates a hospitalization or other very high-cost care in
services.
Ms. CHU. Thank you. Thank you so much.
Dr. Jacobson, I want to address the issue of mental health
disorders and the senior center enrolled in Medicare Advantage.
CareMore Center, a Medicare Advantage provider in my
district, developed the Brain Health Pilot Program in Southern
California that sought to treat individuals with dementia-
related problems, and this pilot used teams of practitioners,
including a neuropsychologist, a neurologist, pharmacists, and
dieticians to educate patients and caregivers about the risk of
neurological disorders and how to address them.
So the pilot found that their wraparound services had a
profound effect, and there was a 57 percent increase in
reported falls and a 38 percent decrease in emergency room
visits, but as a former clinical psychologist, I am
particularly interested in the ability of Special Needs Plans
to provide coverage and care for individuals with mental and
behavioral health issues.
You noted in your testimony that about 1 percent of C-SNP
patients are enrolled in plans to specifically treat their
mental illnesses. What information do we have, if any, about
the beneficiaries enrolled in C-SNPs and D-SNPs for mental
illness?
Ms. JACOBSON. To answer your question directly, we don't
have that data. It is possibly something we could look into,
and I am happy to talk further with your staff about that after
the hearing.
There are a few things to sort of emphasize on this,
though. For example, the C-SNP that you mentioned is the one C-
SNP that focuses on mental illnesses. It is only available in
Southern California. That again emphasizes that these plans are
not offered across the country. It really depends upon where
you live in terms of whether you have access to this.
We don't know, at least offhand, how many people with
mental illnesses are in SNPs overall. One thing to emphasize,
though, is we have noticed that people who are under the age of
65 who are on Medicare, many of whom have mental illnesses, are
underrepresented in Medicare Advantage plans, and we really
don't understand why they are not enrolling in Medicare
Advantage plans at the same rate as other Medicare
beneficiaries.
Similarly, people who are over the age of 85 are also
underrepresented in Medicare Advantage plans, many of whom have
Alzheimer's. So it really raises questions about what is
actually going on in the Medicare Advantage plans, and we
really need more information as to how they are actually
treating mental illnesses and what they are offering the
beneficiaries.
Chairman TIBERI. The gentlelady's time is expired. Ms.
Jenkins is recognized for 5 minutes.
Ms. JENKINS. Thank you, Mr. Chair, and I thank the panel
for being here.
Ms. Wilson, thanks for your testimony regarding the PACE
program. In Kansas, just down the street from my Topeka office,
is Midland Care Connection. It operates a very successful and
growing PACE program.
In September of last year they expanded their PACE program
into Wyandotte County, which is in the Kansas City metropolitan
area, and they created a new grieving adult support group, and
I am very pleased that they were able to do that. I really
admire their work and compassion for their patients and hope
that they will be able to continue growing and offering
services to more Kansans.
I have a question about the expansion of PACE and your
thoughts on that topic. As you can tell from the questions on
Committee today, many of us represent rural communities and
Midland Care PACE program there in Topeka serves rural counties
in the second congressional district in Kansas. It is a
wonderful program that is a real lifeline for many vulnerable
seniors and people living with disabilities.
I understand that CMS issued a PACE regulation almost a
year ago that is still pending. Were there any flexibilities
including in that regulation that would encourage PACE programs
to expand to rural areas?
Ms. WILSON. Yes. That is one of the priorities for the
National PACE Association is to have that PACE regulation
approved, and the proposed rule we need to get is out, but we
need to have the final rule. It should be ready to go.
All the comments are back to CMS, and there are
flexibilities especially for rural areas, and that is being
able to use community physicians, to be able to change the
interdisciplinary team that I mentioned earlier on so that you
don't have to have 11 professionals around the table, that you
can have the select few that need to be there in relation to
that particular resident or that particular participant and
their particular issue. The CMS guidelines that would come out
will be very, very helpful to expanding PACE and doing it a lot
more quickly.
Additionally, the pilot programs that were approved by
Congress and are still waiting to be implemented by CMS, will
allow us to reach out and do many more programs and reach many
more populations that we currently are not allowed to do.
So we are waiting for CMS to pull the trigger and would be
happy to have NPA work with you, Ms. Jenkins, on anything that
you might need in order to help your State move forward on some
of those issues.
Ms. JENKINS. Excellent. We will look forward to helping you
do that.
As a followup, in your role at leading age in the National
PACE Association, what would have been some of the concerns
that you heard from your local PACE program operators and staff
regarding the burden of Federal regulations or the confusion
that a lack of regulation causes on them, and what can we all
do to help ease those concerns?
Ms. WILSON. Well, I don't think there is a lack of
regulation ever at CMS. But the changes in regulations--let me
just put it this way, PACE started as a pilot project with On
Lok in San Francisco 45 years ago, and because it was a pilot
project there were many, many regulations and requirements
imposed upon it to see whether or not it would be reasonable to
continue the program.
It obviously was reasonable, and 20 years ago the first
regulations came out, and they have been in place now, the same
regulations, and it is time to take a look at those regulations
and to make the changes.
National PACE Association has made recommendations. We have
worked with CMS to look at those regulations and to make
improvements and changes to help PACE to be able to grow to
simplify the regulations so that PACE programs that might serve
Miss Eva as mentioned before might be able to flourish, and we
need CMS to, as I said, pull the trigger.
And if you can make a few phone calls to whomever you may
know in that department, then that might help them to
understand the importance of their work related to the PACE
Innovation Act and also the proposed rules.
Ms. JENKINS. Thank you. Mr. Chairman, I yield back.
Chairman TIBERI. Thank you. The gentleman from California
is recognized for 5 minutes.
Mr. THOMPSON. Thank you, Mr. Chairman. Thank you for
holding this hearing, and thanks to all the witnesses for being
here.
I think this is one of those rare occasions where we found
something that everybody on the Committee, irrespective of
which side of the dais you sit on, agrees, and I think there
are plenty of examples of us working across the aisle to try
and facilitate ways to ensure that folks can get healthcare at
home.
And you see it in some of the telehealth legislation that
Ms. Black and I wrote, and there are just a number of examples
of that, and the PACE program is right up that alley.
So I want to thank you all for what you are doing and for
the testimony that you are bringing forward.
I don't have a PACE program in my district, but I know my
constituents would like to be able to expand their access to
healthcare while being in the comfort of their home.
And maybe starting with Ms. Wilson, can you talk about some
of the hurdles that organizations may face in creating a PACE
program and what Congress and/or the Administration could do to
support the launch process?
Ms. WILSON. Well, first of all, help us to pass those
regulations, encourage CMS to pass them.
Second of all, the process to start a new PACE program is
long and arduous. It takes about 2 years. And to develop a PACE
site takes between $7 and $9 million. That includes the upfront
costs to purchase the program, purchase the land, build the
building, outfit the building. And then have the money on hand
because it takes 1\1/2\ to 2 years in order to break even with
the current payment methodology. Those upfront costs are never
reimbursed. Those are costs that not-for-profits fundraise for
traditionally.
The other concern is in starting a new PACE program. CMS
came out 1\1/2\ years ago saying that they had a new way for
applications to be submitted and then approved. The new way is
once a quarter there is 1 day, 24 hours, when you may submit
electronically your application, and if you miss that timeframe
by 1 minute then you must wait another 3 months.
The timeframes that are lost because some consultant didn't
get their report in by 2:00 p.m. in California so that you can
submit it by close of business to CMS 5:00 p.m. back here on
the east coast is a real challenge. And we are starting to try
to open another site in our area in San Diego, and that is the
biggest concern of all of our staff.
In fact, the greatest fear is they will miss that 1 day
when they ``push the button,'' and if they miss that push the
button that is another 3 months' delay, that is costs that we
will be incurring for another 3 months for which we will
receive no reimbursement, and we will not be able to open our
program, and it will delay the entire program by at least 6
months. That is for a program that is already up and running,
and we were just asking for an expansion.
Now, if you look at somebody that wants to come to your
area and start a PACE program, they are starting the 2-year
journey, if they forget to press that button or miss that date
because of a consultant report, then they are going to be
delayed, and that is time and money. That is why people don't
want to do PACE programs.
It is not that they don't want to do them, it is just so
onerous to start a new program that it is almost self-
defeating. CMS puts up so many barriers to beginning a program
that it is incredibly, incredibly hard.
Mr. THOMPSON. Anyone else like to add anything? Everybody
concur?
How about qualified personnel, qualified practitioners, is
there difficulty in finding folks?
Ms. WILSON. At a PACE center?
Mr. THOMPSON. Yes, for a PACE center.
Ms. WILSON. We hire on average at our centers in California
70 professional, that is graduate-level-degreed people, and on
average between 25 to 35 entry level positions. That will be
food service workers, care attendants, other positions, day
centers, CNAs, et cetera, that perform that level of work. But
on average, 70 professional clinical personnel who serve these
people on a daily basis.
Mr. THOMPSON. Thank you.
I yield back.
Chairman TIBERI. Thank you.
The gentleman from Texas is recognized for 5 minutes.
Mr. MARCHANT. Thank you, Mr. Chairman.
I just have a few questions about the Medicare Advantage
Plan and its growth that is taking place. I have a district
around the Dallas-Fort Worth area, suburban Texas, but I have a
30 percent participation rate. Of my Medicare eligible, there
is 30 percent of that population in Medicare Advantage, and
that number seems to be growing.
I think, Ms. Jacobson, you did a report. I am working off
of some of your work from last year.
My question is, is there any correlation? Yet Mr. Smith
over in his district has like 5 percent of people who
participate in Medicare Advantage, only 5 percent that are
eligible to do it.
When you look down through everybody's district, is there
any correlation in the participation in these special programs
that we are talking about today, is there a correlation between
the participation in Medicare Advantage in those districts? Mr.
Curbello has 60 percent of his Medicaid-eligible people take
Medicare Advantage. Is there any correlation between any of
those figures as it relates to those special programs?
Ms. JACOBSON. Yes, there is a correlation, to give a very
straightforward answer, because part of why Medicare Advantage
penetration and enrollment rate really differs across the
country, one of the reasons is due to firm experiences in those
parts of the country and just history of managed care in those
parts of the country, which really differs across the country.
And another reason is payment rates. And both of those
reasons would apply to both regular Medicare Advantage plans as
well as special needs plans. And it makes sense that the more
plans that are offered, the higher enrollment likely is going
to be in those areas. So we do see that the more plans that are
available in an area tend to be areas where enrollment is
higher.
So in that sense, yes, you do see more SNPs in areas where
you see more regular Medicare Advantage plans. And we have
looked at the growth in Medicare Advantage enrollment
nationally as well as in different counties. And in many
counties where Medicare Advantage enrollment used to be
relatively low, it has been growing pretty quickly. But in
other counties, you still see pretty low Medicare Advantage
enrollment and relatively few plans. So there is quite a
difference across the country.
Mr. MARCHANT. Any other comments?
Mr. GRABOWSKI. I completely agree with that. I just wanted
to piggyback, that just because an area has a strong Medicare
Advantage penetration and that leads to greater growth in the
special needs plans doesn't mean that Medicaid is able and
willing to play ball alongside it.
And I think that is a really important point, that in order
for these models to really work, you need a robust SNP market,
special needs plan market, but you also need that State
Medicaid plan to be willing to play with them.
And I think that has been one of the real challenges with
this model, SNPs have sort of followed Medicare Advantage plans
in some States, like Minnesota, and there really is a robust
kind of Medicaid side to this market, but that is not
everywhere.
Mr. MARCHANT. And I know we don't have any jurisdiction
over Medicaid. Is there a correlation between the States that
expand it and the participation in these programs?
Ms. JACOBSON. That is not something that we have looked at,
although I would emphasize that for Medicare Advantage and for
SNPs it really is a county-by-county issue. It is not a State
issue. So parts of Texas even have relatively low Medicare
Advantage enrollment. But, obviously, other parts of Texas have
relatively high Medicare Advantage enrollment, and you see that
in many States.
Mr. MARCHANT. Thank you.
Thank you, Mr. Chairman.
Chairman TIBERI. The gentleman from Oregon is recognized
for 5 minutes.
Mr. BLUMENAUER. Thank you, Mr. Chairman. I appreciate our
having this conversation.
Dr. Fendrick, I appreciate having you back. I continue to
be quite enthusiastic about the simple logic that you
described. Some of the work that is underway, I appreciate you
giving us some specifics that you think might make a difference
to accelerate the progress.
And, Mr. Chairman, I would hope that this would be an area
on which we could spend a little more time. As you know,
Congresswoman Black and I have had legislation in the last
couple sessions. We are fans. We think that this can be
advanced outside of the scope of some of the things that get us
tripped up around here. And I think there is some really
powerful evidence that we can help provide better care and bend
the cost curve.
But there is just one area, Doctor, that I would seek your
advice and counsel, because there are questions about the
applicability for VBID in very low-income populations who
aren't involved with a copayment, can't afford more, some of
them have no cost sharing.
Do you think there are ways that this can be applied in
value-based design to be able to get around this, to be able to
provide the power of the concept for people who don't have that
type of copayment or capacity to pay more?
Dr. FENDRICK. So, first off, thank you for the kind words.
I am happy to be back, and it is a great pleasure to be talking
about one of the rare bipartisan healthcare reform ideas. And I
appreciate your work and Representative Black's and others on
the Committee to make this happen.
So we have studied the impact of increases in cost sharing,
because that is what has largely happened in this country. And
it comes as no surprise, and you don't need advanced degrees
like my fellow panelists to know that if you make people pay
more for something, they will buy less of it. And poor people
are impacted by higher prices more than rich people are.
So we have focused very, very much on those people with
multiple chronic conditions and those who are economically
vulnerable and have basically tried to implore public and
private payers, if you can't extend VBID principles to
everyone, you should probably extend VBID principles and lower
cost sharing to the people who would benefit the most, and
those are the sickest individuals and those who do not have
economic resources.
The good news, as we heard, such as the PACE program, there
has already been integration of VBID principles to make sure
that those who cannot afford essential services can. That
doesn't mean it is happening all over the Nation.
I think it is particularly germane regarding prescription
drugs in this program, and we have focused a lot of our
attention on trying to extend this clinically nuanced cost-
sharing issue to the issue of Part D drugs. We know that there
are a lot of low-income Medicare beneficiaries who are either
cutting their pills or taking them every other day or not
taking them as their doctor or nurse practitioner prescribed
that they do that. And there have been external influences,
like patient assistance programs and charity programs, to help
bridge that gap.
It is our hope that if value-based insurance designs are
put in place, whether it be for middle income or low income,
that those services that are deemed to be highest value would
have zero cost sharing, regardless of income, which is the case
for many preventive services in Medicare now, much to the
credit of this Committee.
And we are hopeful that as VBID ideas are extended,
particularly for those extraordinarily well-established, high-
value services, to Dr. Gretchen Jacobson's point, I don't want
to get into the areas where there is controversy when there is
20 years of evidence of quality metrics in the Medicare
program. Let's start with those low-lying fruits. And if we
can't extend them because of fiscal issues to every Medicare
beneficiary, then obviously the best place to get a return on
investment would be to focus those on the populations who are
most likely to achieve benefit, and those are the low-income
folks.
Mr. BLUMENAUER. Well, I am hopeful that we won't ignore the
areas of controversy, but I subscribe wholeheartedly to the
notion let's start where we can, establish the principles,
spread the benefit. But having a sense of how we can develop
the nuance for the lower income where there might be some way
of having a more powerful incentive or some of the nuance
through the program administration, if you could lend some
thought to that.
Dr. FENDRICK. I will just quickly say that, not being a
legislator or a lawyer, not understanding all the regulations,
in the commercial sector, where the VBID experience is much
better studied and has wider implementation, there are public
and private employers that are extending greater subsidies to
employees who are, say, hourly compared to salary.
Mr. BLUMENAUER. I understand. I just would like your
reflection at some point about where there is no cost sharing,
very low income, how we can refine, perhaps, that incentive.
Mr. Chairman, thank you. I appreciate the conversation, and
I hope that we can dig a little deeper here. This is very
helpful.
Chairman TIBERI. Thank you. Me too.
The gentleman from Wisconsin, Mr. Kind, is recognized for 5
minutes.
Mr. KIND. Thank you, Mr. Chairman.
I want to thank our panelists for your testimony here
today.
I represent a very large rural western Wisconsin district.
And we are kind of proud in Wisconsin for some of the unique
pilot SNP programs that we have, especially with the dual
eligibles back home. We have about 20 percent penetration with
MA plans. Those numbers have been going up even in the large
rural area. And I am a big believer in trying to move the
system to a more value, more quality, more outcome-based
incentive system, whether it is through delivery system reform
or payment reform.
Dr. Fendrick, with the value-based insurance plans out
there, just how much more can we be pushing? How quickly? And
when can we start bringing this, really, to capacity so that we
start seeing better results at a better price?
Dr. FENDRICK. I appreciate that comment. I think a lot of
people were talking about alignment in a different context
earlier in the panel.
I want to talk about alignment to you as I know you have
been pushing for value in caring more about health than costs
even though we have to be fiscally responsible and clinically
nuanced at the same time.
Most of the major reforms going on in American healthcare,
and particularly Medicare, are the supply side or provider-
facing initiatives trying to get clinicians like myself to
behave different and better. And I think we have made marginal
success in this regard moving in that direction.
We have not done the same for the patient-focused side. We
have continued into this kind of one-size-fits-all design. And
I think for me the end-all is to find a situation where
clinicians, hospitals, SNPs, ACOs, whatever, are aligned
completely with the patient. Imagine now, Mr. Kind, I am paid a
bonus to get my patients with diabetes to the eye doctor and my
patients are in a plan for which they can't afford the
deductible to go to the eye doctor for that exam.
So my view about alignment is not more of these granular
issues. Imagine a situation, which we are moving slowly in a
bipartisan way toward, where both the providers and the
patients are aligned over health, understanding that we have to
be fiscally responsible in this regard.
Mr. KIND. Well, we have numerous alternative payment
methods out there, different pilots. I think one of the best
things we created in the Affordable Care Act was the Center on
Innovation so we can start experimenting in these areas. But is
there more, is there another pilot or something that you
envision that the Center on Innovation ought to be setting up
and working with in order to move down this path?
Dr. FENDRICK. Well, I will stay with the Chairman's theme
of integration. I think that one is not so much creating new
pilots but getting pilots to think about one another.
And since many of you are from rural areas, one of my
favorite demos is the Pennsylvania Rural Health Model, which
has been taken in a bipartisan way in that State--again, many,
many rural districts there--to try to preserve and protect
access to care for many of those individuals who live in those
areas, but being fiscally responsible in that way.
And this is largely at this early stage a way to deal with
hospitals and clinicians there. And they are only just now
thinking about how to better engage patients to get care
locally when it is best for them, and when it is best for them
in that rare instance where they have to go to a center of
excellence to go elsewhere.
Again, many of these conversations are driven by dollars,
and I love your theme of the fact that we have to think about
health as well as dollars in moving these ideas.
Mr. KIND. Mr. Grabowski, you have already mentioned about
the importance of greater clinical financial integration
leading to better results, and that I think is particularly
pertinent with the dual SNPs as well, the Medicaid, Medicare
overlapping in that. What more can we be doing in order to
encourage that type of integration of services?
Mr. GRABOWSKI. Yes, I touched on this earlier in my
remarks, but I really think pushing on Medicaid, once again,
getting beyond simply having these contracts that consist of
case management. I really want true alignment where the
Medicaid program is actually working closely with the plan, and
the dual-eligible SNP actually has some control over the
finances, a truly integrated financial product.
Another model that can often work is where the same managed
care company has the dual-eligible SNP and a Medicaid plan and
there is the opportunity to kind of align there. But if they
are not kind of at risk for Medicaid finances, you are not
going to get that meaningful financial alignment up top, and
that is not going to work at the delivery level.
Mr. KIND. How are we doing overall as far as the collection
of data when it comes to quality measurements? Are we getting
better?
Mr. GRABOWSKI. I think we are getting better, but I think
in regards to this population, we have a long way to go. We
have sort of had a one-size-fits-all model, as Mark just said.
That is really challenging, because this is a really unique
population with really unique outcomes. And the thought that a
70-year-old Medicare beneficiary who is healthy will have the
same kind of quality outcomes as an 80-year-old diabetic or an
individual with dementia just isn't the case.
Mr. KIND. Yes. Thank you, Mr. Chairman.
Chairman TIBERI. Thank you.
Mr. Higgins, you are recognized for 5 minutes.
Mr. HIGGINS. Thank you, Mr. Chairman.
You have all studied the Medicare Advantage program pretty
extensively. And about 31 percent of the Medicaid--Medicare
population is enrolled in Medicare Advantage programs. Pretty
accurate?
Ms. JACOBSON. Did you say 1--it is about one-third now.
Mr. HIGGINS. It is about one-third. Okay.
A little less than 2 million are enrolled in special needs
programs. That is about 12 percent of the Medicare Advantage
population. As this population is frail and chronically ill, I
presume that consumes a disproportionate amount of the Medicare
Advantage dollar.
Do you have any estimates as to what was spent on the
Medicare Advantage special needs program last year or in 2015?
Ms. JACOBSON. We don't have specific figures of how much,
that is not publicly available data, of how much plans,
specific plans receive.
Mr. HIGGINS. Well, why wouldn't that--I mean, it is a
public program. Why wouldn't that be--if we are looking at
designs for greater efficiency in the delivery of services and
lowering costs, it would seem to me that the amount of money
that we spend each year would be readily available, because
that would be an important number to either conclude that we
are doing well with it or we need to do better.
Ms. JACOBSON. So in the past, CMS has released some data on
the bids Medicare Advantage plans would get, which would help
to get at how much they are paid.
The issue is that it is not--the data that has been
released is not granular enough for us to look at what--how
much SNPs in particular have been paid.
Mr. HIGGINS. Could we safely assume, then, that it is--it
has to be a very high number as compared to the rest of the
Medicare Advantage population, right?
Ms. JACOBSON. Yes.
Mr. HIGGINS. Okay.
Medicare Advantage is administered by private insurance
companies. How big a player is UnitedHealthcare in the Medicare
Advantage special needs plans?
Ms. JACOBSON. UnitedHealthcare is the dominant insurer firm
offering the institutional SNPs. They also offer many chronic
care SNPs.
Mr. HIGGINS. Is 20 to 25 percent of the special needs
population on the Medicare Advantage program, are they covered
by UnitedHealthcare?
Ms. JACOBSON. A fairly significant portion, yes, are
covered by United.
Mr. HIGGINS. Do you know what is going on with
UnitedHealthcare right now? The United States Department of
Justice has just joined a lawsuit against UnitedHealthcare for
allegedly defrauding the Medicare Advantage program out of
hundreds of millions and potentially billions of dollars in
each of the last 10 years.
When we look at designing a program to discover value-based
insurance designs by using financial incentives to promote
cost-efficient high-value rather than low-value healthcare
services, it would seem to me that is a major issue. As
students of the Medicare Advantage program, are you familiar
with the details of that investigation and its implications
relative to funding that program?
I am not picking on you.
Ms. JACOBSON. I am well aware that the investigation is
ongoing.
Mr. HIGGINS. Are the other private insurance companies that
are involved in the Medicare Advantage program for special
needs, are they also being looked at for also defrauding,
overcharging the American taxpayers in Medicare Advantage under
the special needs program?
Ms. JACOBSON. I do not know what other companies are
currently being looked at that have not been announced.
What I would emphasize is the Medicare Payment Advisory
Commission, as you may know, has done a lot of work looking at
coding intensity.
Mr. HIGGINS. I understand. This is fraud. This is stealing
money from the American people in the Medicare Advantage
program. It is a different issue altogether.
I yield back.
Chairman TIBERI. The gentleman's time has expired.
Mr. Meehan is recognized for 5 minutes.
Mr. MEEHAN. Thank you, Mr. Chairman. I want to thank you,
frankly, for holding this hearing, which I think is really
focused on something which is so important, which is this
effort to assure that we continue to look for innovative ways
to deliver quality care while at the same time looking for ways
to hold down costs. And I am moved by a couple of realities.
One, the recognition that when we get to the Medicare
Advantage population, we have about 50 percent that consume
about 3 percent of the costs, and then a very small percentage,
10 percent, that account for about the other two-thirds. So we
know we are dealing with a very targeted population to begin
with.
And what I have found actually sort of heartwarming, and it
is sort of counterintuitive, you would think that Medicare
Advantage falls disproportionately, that the wealthier you are,
the more likely you are to purchase the plans. And yet, to the
extent that I have been able to look at it in my own district,
the people who have taken the time to invest in getting these
plans are not always people with the highest means. So there is
an effort on the part of those who want to be consumers of it.
But, Dr. Fendrick, I want to focus on what your testimony
was earlier, about this being directed toward the patients, not
just specifically the payer. One of the things that we are
looking at is legislation that would create more flexibility,
to prevent chronic illness or improve care coordination, those
kinds of things.
Would you speak to that issue of flexibility that you would
like to be able to see so we can deliver to this chronic group
and really not just cost savings, but it is quality, it is
these people are better off.
Dr. FENDRICK. Right. So excellent point.
So, first off, healthcare is very complicated. Who knew,
right? So it has been a longstanding fact that a significantly
small portion of populations in Medicare and commercial expend
a very, very large part of the healthcare pie. Most of the
fabulous innovation that is going on that allows me to better
treat these patients--and I congratulate Congress for the
bipartisan passage of the 21st Century Cures Act, which allows
even a greater influx of innovative funds to help me take care
of my patients better.
So that is all well and good for those of us who are
trained to improve the quality and length of life. Almost all
of these innovations, with very few exceptions, come at a
significant expense, which requires that tension that I prefer
you to have rather than I, which is we want to do the best for
our patients, but we also have to be fiscally responsible,
which you mentioned very clearly in the call of this hearing.
So as the practice of medicine moves forward at a rapid
pace, Star Wars, we have precision medicine. We have genetic
medicine. The delivery system, in my opinion, is like the
Flintstones, right? So the delivery system has not been able to
catch up to the incredible science that we have had.
So we have one of two choices. One is that we slow down the
innovation in the Star Wars medicine, which I would not advise,
or we continue to have conversations like we are having today
and have experts like I have to my right to think about ideas
that allow us to have the delivery system catch up to the
precise example that you raised.
And, again, going back to 1965, there was this important
issue to make sure that every Medicare beneficiary had the same
benefit design. I would argue, 2017 and beyond, given that we
can't give all things to all patients, that instead of blunt
instruments, a much better approach would be one that is
individualized, similar to the situation that we heard of in
the PACE programs.
Mr. MEEHAN. Actually, part of the legislation is to create
supplemental benefits for those that are chronically ill sort
of to address that. Do you think that would go toward the
objective that you are articulating?
Dr. FENDRICK. Absolutely. And, again, it is baby steps. But
the initial VBID MA demo, not just that includes services and
providers, CMMI, was very, very careful to follow advice from
this Committee to allow the demo plans to extend supplemental
benefits as part of the demonstration package, a broader view.
Mr. MEEHAN. Thank you for your testimony.
Mr. Chairman, I yield back in light of time.
Chairman TIBERI. Thank you.
Mr. Reed.
Mr. REED. Thank you, Mr. Chairman.
I was just going to listen today, but, Dr. Fendrick, you
touched on something and I want to follow up on my colleague
from Pennsylvania on it, looking at it from a beneficiary
patient perspective.
One of the things I firmly believe is that people react to
their own fiscal condition. If they see money in their pocket,
it seems to generate more behavioral change, in my opinion,
than other items in this arena.
And so, are you aware of any studies that talk about human
behavior and the impact that having a carrot approach to this
may have a beneficial income on a reimbursement model? You are
talking about in some of your testimony, for example, the
diabetics and having foot and eye exams with no copays, that
type of thing, yes, that is a bottom line financial impact to
an individual, but do they really see it?
And what I mean by that, I will tell you a story. When I
was a kid, I was raised by a single mom, youngest of 12, and
every time we went to the bank to pay the bills each month she
would cash her checks to hold the cash and then give it back.
Is there any type of creative, innovative ways that we
could talk about in regards to reimbursing patients for seeing
a doctor and getting followup care, medication adherence? I
have even had talks with CEOs of different carriers about even
giving them a gift certificate for doing that. And they told me
that regulations in New York prevented them from doing that, or
maybe they are Federal regulations.
Does that carry any weight, that kind of nominal impact on
human behavior? Do you think that could change the curve?
Dr. FENDRICK. So I should bestow a degree of behavioral
economics for that. I mean, David and others are experts here
on that.
Mr. REED. Well, let's go to David, too, after you. But,
please, from your patient perspective.
Dr. FENDRICK. So first off, the Kaiser Family Foundation
has all this information, a lot of good information in the
testimony and elsewhere, to answer these types of points.
I do believe strongly that, particularly in the low-income
folks that we talked about earlier, something as low as a
dollar matters. So I have seen Medicare Advantage patients who
are faced with $4 copays for drugs that everyone in the exam
room knows will be meaningful changes, but you never want to be
in the situation to either pay rent, buy food, or fill your
prescription, which is why we argue for these types of things.
But I want to make sure, it is not all things for everyone.
I would like to start with those conditions and those services
for which there is no doubt that they should be prescribed and
used in those situations, which is where the nuance comes in.
In some commercial settings, we have gone beyond free and
we have actually paid people to do certain things like quit
smoking or take their prenatal vitamins or other types of
things.
Mr. REED. And we have seen a positive change.
Dr. FENDRICK. We do. But we also have what I call the
frozen carrot, that if people are given an advantage and lower
cost sharing to do certain things and they don't, they should
also be accountable for that.
Mr. REED. They get the stick.
Dr. FENDRICK. I call it a frozen carrot. I would rather
call it that.
Mr. REED. A frozen carrot. Very good.
David, could you offer on that?
Mr. GRABOWSKI. Absolutely. I come to Congress and a
behavioral economics lecture breaks out here. This is great.
As Mark described, I really like these programs. There have
been a lot of positive studies. I am thinking of the work of
Kevin Volpp at the University of Pennsylvania where he has paid
patients to take particularly high-value drugs, and it is VBID
on steroids basically and it has shown to be very effective in
those applications.
So I think you raise a really good point, Mark, that
accountability is key in these kinds of programs as well. But I
do think if there is going to be huge costs to the healthcare
system of drug non-adherence here, we want to make certain that
we are potentially incentivizing individuals to adhere to their
drug regimen.
Mr. REED. And would you agree, David, that even a dollar
would matter to a lot of those individuals, change their
behavior to adhere to their medications?
Mr. GRABOWSKI. It absolutely does.
Mr. REED. You know it does.
Dr. FENDRICK. I want to say one thing that you may find
very interesting, as the argument breaks out here. In a large
commercial experiment we offered Americans in really good
insurance plans who had heart attacks their drugs to prevent
their second heart attack at no cost to them. They only took
them 50 percent of the time.
So we need to go beyond financial incentives, particularly
the carrot, as you described, communication, literacy,
transportation, not just drug reductions in copays, to make
this work. They took it more often than when they had to pay
for it, but still we have a long way to go.
Mr. REED. I appreciate that. And being new to the
Subcommittee, I appreciate the opportunity to continue to learn
on this, and I appreciate the opportunity to participate.
Thank you, Chairman.
Chairman TIBERI. Well, thank you, Mr. Reed. We have about a
minute left to go vote, so perfect timing on your part.
Dr. Fendrick, Dr. Grabowski, Ms. Wilson, Dr. Jacobson, you
guys were outstanding. And Mr. Levin and I both were chatting
here, and you have really helped bring along the debate as we
move to making Medicare more efficient both for taxpayers and
for the patients that you see, Dr. Fendrick. So we appreciate
your testimony today. Your answers were very good. We look
forward to working with you in the future.
With that, please be advised that Members will have 2 weeks
to submit written questions to be answered later in writing.
Those questions and answers will be made part of the formal
hearing record.
With that, the Subcommittee stands adjourned. Thank you
all.
[Whereupon, at 4:28 p.m., the Subcommittee was adjourned.]
[Questions for the Record follow:]
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