We just put out a press release announcing some results from the 2011 Medicare annual enrollment period. In addition to helping more than 150,000 people evaluate and choose Medicare plans, we were able to submit 99% of enrollment applications to carriers within 24 hours, thanks to our back-end integration with carriers.
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Washington Extension

January 20, 2012

Medicare News

Medicare Advantage plans that offer gym memberships to enrollees may have the same effect as cherry picking healthy beneficiaries, according to a new study in the New England Journal of Medicine. The authors found that enrollees in plans with gym memberships are healthier and have fewer mobility limitations than enrollees in plans without fitness benefits. The study did not address whether the plans were purposefully trying to attract and retain healthier enrollees, which is prohibited by law.

Gradually increasing the Medicare eligibility age to 67 would save the Federal government $148 billion over ten years, according to a new Congressional Budget Office report, or about a 5 percent annual reduction in Medicare spending. Although most seniors losing access to Medicare would have employer-based coverage, they would face higher premiums and pay more out-of-pocket for health care.

ACA Update

The White House released a report showing that 28 states have taken concrete steps toward establishing a health insurance exchange—half with clear authority to set up an exchange and half with executive orders or studies authorizing exchange work. Another 22 are still studying their options. The report highlights the actions of ten states and summarizes the authority and funding for exchange development in each state.

Wisconsin Governor Scott Walker will officially return a $37 million Early Innovator grant from the Federal government. He has also directed the state health agency to cease work on a state-run health insurance exchange and will rescind the creation of the state Office of Free Market Health Care. Kansas House Republicans are pressuring Governor Sam Brownback to cancel the state’s $135 million contract with Accenture to design a computer system to track social service applicants. Though Governor Brownback has put a moratorium on health insurance exchange work until after the Supreme Court decision, Republicans saw Accenture’s project as laying the groundwork for an exchange. New Hampshire’s Senate voted unanimously to establish a health insurance exchange, with backers citing the need to keep state control over if the ACA is implemented. New Hampshire’s House is opposed to ACA implementation.

The US Department of Health and Human Services faces pushback on its essential health benefits proposal. Patient advocates are asking for an additional 45 day comment period, after the initial deadline of January 31, 2012. Republicans are criticizing the use of sub-regulatory guidance rather than the traditional rulemaking process, accusing HHS of sidestepping regulatory requirements for cost-benefit and unfunded mandate analyses.

On the Hill

The House and Senate conference committee assigned to negotiate a longer-term solution to the payroll tax break and Medicare physician payments will convene on January 24th. The House returned to Washington, DC on January 17th and the Senate returns on the 23rd. Current law expires on February 29th, at which point Medicare’s payments to physicians would fall by nearly one-third.

Other News/Reports

The Congressional Budget Office found that Medicare demonstration programs—used to explore new ways to deliver and pay for Medicare—rarely reduce Medicare spending and in fact are often more costly. Value-based payment experiments struggled to overcome Medicare’s fee-for-service payment incentives while trying to increase the quality and efficiency of care delivered, and only successfully decreased spending by negotiating lower payment rates. CBO concludes that effective demonstration programs focus on transitions in care settings, gather timely data on care utilization, encourage close interaction between physicians and case managers, and target interventions to high-risk enrollees.

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In keeping with its mandate to inform the public of the measures it’s considering for adoption, the Centers for Medicare & Medicaid Services (CMS) has compiled a list of 367 new ideas on how to accurately and fairly measure doctors, hospitals and other health care providers. The proposed measures came from a variety of sources, including the CMS, CDC, industry groups, companies, health care organizations, universities, research groups and others. After a thorough review, CMS is expected to adopt about 60 of the measures.

A key goal of the Patient Protection and Affordable Care Act (ACA) is to shift reimbursements from being based on the quantity of services delivered to being based on improved efficiency, lower costs and improved quality of care provided. These new measures will be assessed and selected based on their ability to help CMS in their efforts to achieve this goal.

In addition, the ACA requires a federal “pre-rulemaking process” for selecting quality and efficiency measures. In compliance with this requirement, CMS submitted the entire list of proposed measure to the NFQ organization Measures Application Partnership (MAP) for their review.  MAP has studied the proposed measures to determine which ones it believes will accurately and fairly measure health care provider performance.” Their pre-rulemaking report is posted online and indicates which measures it does and does not endorse.

The new measures under consideration for 2012 are spread across 12 out of 23 CMS programs. In the chart below (from the CMS list of measures) you’ll find the number of measures being considered listed by program. It’s interesting to note that most of the measures are concentrated into just a few of the programs.

  • 153 measures (more than 40%) fall under the CMS program Physician Quality Reporting System
  • Other programs with many new measures include Medicare and Medicaid Incentive Program for both eligible professionals and for Hospitals and CAHs, and Hospital Inpatient Quality Reporting
  • None of the measures are related to the Medicare Shared Savings Program, Health Insurance Exchange Quality Reporting, or Medicare Part C and Part D Plan Rating Programs.
CMS Program

No. of new measures

End Stage Renal Disease Quality Improvement


Hospice Quality Reporting


Hospital Inpatient Quality Reporting


Hospital Value-Based Purchasing


Inpatient Psychiatric Facility Quality Reporting


Inpatient Rehabilitation Facility Quality Reporting


Long-Term Care Hospital Quality Reporting


Medicare and Medicaid EHR Incentive Program for Eligible Professionals


Medicare and Medicaid EHR Incentive Program for Hospitals and CAHs


Physician Quality Reporting System


Prospective Payment System (PPS) Exempt Cancer Hospital Quality Reporting


Physician Feedback/Value-Based Modifier Program: Value-Based Payment Modifier






At Extend Health we like to keep an eye on trends in the health care and insurance industries, and lately one big trend is erosion of the clear boundaries between providers and payers – specifically, insurance carriers who are positioning their businesses to cope with the cost-control challenge they face as MLR requirements of the Affordable Care Act (ACA) start to kick in.

The trend of hospitals expanding into regional super-providers, buying up physicians groups and ancillary service providers, has been going on for some years now. But recently there has been a spate of activity among carriers who are expanding into new areas, buying companies or forming partnerships to offer new services both to patients and providers. Carriers are also investing in ways to educate patients and increase compliance with preventive and wellness measures, improve patient care coordination among their provider networks, and help patients find the services they need. A few examples follow:

  • Aetna recently announced Whole Health, a new insurance plan available to employees of small businesses. Employees who are covered under the plan receive lower co-pays if they get their care through Arizona’s Banner Health Network, Aetna’s ACO partner on the plan. The Whole Health plan is built on the ACO model of care, using electronic medical records (EMR) technology to allow providers to share patient information and data so they can better coordinate care. Employees will also have access to technology in the form of on-line tools that will help them do a better job of managing their health.
  • UnitedHealthcare (UHC) purchased XLHealth Corp., a Baltimore-based provider of programs for managing Medicare beneficiaries with chronic conditions such as diabetes. XLHealth’s model includes a variety of interventions enabled by health information technology to address the needs of its Medicare membership. For example, XLHealth members may be provided with advance home monitoring tools used to gauge their health status on a daily basis.
  • UHC also recently opened a consumer storefront, dubbed a “comprehensive health benefits store” in Flushing, New York. The store is meant to serve as a prototype for future consumer-support centers around the country. The center gives UHC plan members access to customer service representatives who can explain benefits, resolve claims issues, and help with other insurance-related matters. Specially-trained staff will also be available to help both UHC plan members and nonmembers find and apply for state and federal financial aid for such things as prescription drugs, food stamps, and heat and electric subsidies. Visitors to the center will be able to use available computers and iPads to find and print health-related information, and a health-screening kiosk will measure blood pressure, pulse and body mass index. Finally, the center will host an ongoing series of free-to-the-public seminars on topics such as nutrition and exercise, disease management, and financial planning.
  • Taking another tack, Humana has acquired Anvita, a health care analytics firm – a move that will allow Humana to give actionable clinical data to health care organizations, which they can use to improve patient outcomes and reduce costs. Humana will offer Anvita’s suite of software to hospitals and physician practices within its network.
  • Humana also recently bought a company that employs care managers for seniors with chronic illnesses. SeniorBridge, a clinical care company based in New York, provides in-home care for chronically ill patients. According to SeniorBridge, its beneficiaries have fewer unnecessary hospitalizations, falls, and emergency department visits.
  • CareFirst BlueCross BlueShield in Ohio has teamed up with Cardinal Health on a clinical pathways program for Rheumatoid Arthritis (RA). The partnership engages nearly 70 rheumatology practices who will participate in a “treat-to-target” approach to RA care – testing different treatment options until a patient’s symptoms are in remission. The goal of the program is to find ways to standardize the way rheumatologists treat RA patients.

Many of these programs are targeted at Medicare beneficiaries for several reasons, not the least of which is the funding and support provided by the ACA-instituted Center for Medicare and Medicaid Innovation (CMI). Seniors are also a good target for finding care improvements and cost efficiencies – older people generally need more health care services, and are far more likely to suffer from one of the 15 chronic conditions that account for 44% of total U.S. health care expenses.

There are many other examples; these are just a representative few. Looming MLR target requirements, along with the economic downturn, are making it imperative that carriers push for efficiency. It’s encouraging to note that so many carriers are looking for ways to improve efficiency by also improving patient care, enlisting both providers and consumers in improving health and managing chronic conditions.

Visit Extend Health — the nation’s largest private Medicare exchange.

The Washington Extension

January 6, 2012

Medicare News

HHS is proposing changes to its quality rating methodology for Medicare Advantage and Part D prescription drug plans for 2013. Plans receive bonus payments based on quality scores. Updated quality ratings would reflect measurements of plan enrollees receiving high-quality hospital care, coordinated care, and medication reviews. The quality scores would also reflect statistically significant improvements in individual quality measures. Public comments are accepted until January 13, 2012.

ACA Updates

HHS released a bulletin proposing minimum requirements for essential health benefits that most health plans in the individual and small group markets must cover by 2014. Rather than list specific benefits, HHS proposes to allow states to choose a benchmark plan that reflects one of the three largest plans by enrollment in the small group market, State employee benefit plans, or national FEHBP plans, or base the benchmark plan on the state’s largest non-Medicaid HMO. Health plans must offer benefits that are “substantially equal” to the benchmark plan, as well as any necessary additions to meet the ten health benefit categories required by the ACA. HHS proposes this approach for 2014 and 2015 and will reevaluate for future years. Public comments are accepted until January 31, 2012.

Alaska will contract with Boston’s Public Consulting Group for exchange planning consultation. PCG already provides operational support for Massachusetts’ exchange. Democrats in Ohio proposed legislation creating a state-run health insurance exchange, though Republicans—including the governor and lieutenant governor—claim that their actions are premature due to continued uncertainty about the law. Republicans in Michigan’s Senate removed authorization for use of federal funding to begin exchange planning in the state, despite Republican Governor Rick Snyder’s support for an exchange. Lawmakers prefer to wait until after the Supreme Court decision about the constitutionality of the ACA but state health officials fear that delay would make exchange preparedness by January 2013 impossible.

On the Hill

A bicameral, bipartisan conference committee will begin working on a longer-term fix for Medicare’s payments to physicians, which were frozen through March 1, 2012 to avoid a 27% payment decrease at the end of 2011. Members of the committee include chairmen of the House and Senate committees of jurisdiction, as well as freshmen members.

The House is recessed until January 17th and the Senate is scheduled to return on January 23rd.

Reports/Other News

Major health insurance companies increasingly derive revenue from government programs like Medicare and Medicaid, rather than from commercial business, according to a new report by Bloomberg Government.  Commercial business now accounts for less than half of the combined revenue of WellPoint, UnitedHealth Group, Aetna, Humana and Cigna. Average operating profit margins have also increased in 2011 relative to the 18 months before the ACA was passed, largely due to expansion into the public sector, according to the report.

Visit Extend Health — the nation’s largest private Medicare exchange.