Leslie Norwalk announced that CMS would issue proposed modifications to the HIPAA privacy rule in a few hours.

8:07 A.M. PANEL TWO: MEDICARE + CHOICE

Mr. Donnelly described the history of Medicare + Choice (M+C), which was re-fashioned from an earlier program under the Balanced Budget Act (BBA) of 1997. The goal was to increase choices for Medicare beneficiaries by bringing in managed care plans, while lowering overall costs. The types of plans included not just health maintenance organizations, but also provider-sponsored organizations, preferred provider organizations, private fee-for-service plans and medical savings accounts. Plans are paid a fee per enrollee each month, with payments varying by county and whether the enrollee is aged, disabled or has end-stage renal disease. Limited risk adjustment of payments attempts to pay more for the highest cost enrollees, and more extensive risk adjustment is planned. In large part, the BBA vision of the program has not been realized: enrollment is sagging, many of the plan types have not materialized, and of late plans are withdrawing and reducing their service areas while cutting benefits. A PricewaterhouseCoopers study of burden found problems with CMS’s relationship with the managed care industry and problems with communication and regulatory style.

Mr. Bailey summarized CMS’s efforts to reduce burden in the M+C program. A recent reorganization has consolidated M+C responsibility into one department, the Center for Beneficiary Choices. Certain staff members in the CMS regional offices have also been dedicated to M+C work for day-to-day contract administration, monitoring, application review, and enrollee issues. CMS has attempted to improve communication with plans. Possible reforms of the Adjusted Community Rate Proposals (ACRPs) would include moving the submission date to September, reducing the audit requirements, or eliminating the requirement for actuarial review. All three would require legislative action. CMS also reviews the plans’ marketing materials. Reforms could expand the "use and file" rules for plans that have a history of good performance. Other areas of interest include setting up a CMS "lead region" for plans with large services areas, working with private accreditation programs to assess plan performance, streamlining the monitoring protocol, expanding deeming, and streamlining the payment reconciliation process by letting plans enter their enrollment data directly onto CMS’s systems.

9 A.M. Q&A

The committee and the panel discussed M+C demonstration projects, enrollment in rural areas, possible state-level plan contracts, enrollee lock-in rules, data collected for risk adjustment, the budget goals underlying risk adjustment, and the plan certification process for private-fee-for-service plans.

9:15 A.M. PERSPECTIVES FROM THE FIELD

Ms. MacEwan said the on-site review process for M+C plans needs to change. A review of her group required the time of 50 staff members who had to compile 79 binders of information. Giving each requirement (even minor rules) equal weight increases the review burden. In the review, CMS staff required some changes to the benefit language, which necessitated many systems changes and could have confused enrollees. She said she welcomed the change that high-quality plans as measured by HEDIS are exempted from some reviews. A second problem area is the linkage between the Adjusted Community Rate (ACR) filing and plan benefit packages. CMS initially developed links between the two to explain benefits to beneficiaries, thus requiring ACRs to have much more detail. For example, plans must describe co-pay information for 12 types of providers ¾ information that used to be summarized on one line and which represents overkill for plans with simple-co pay structures. In some cases, the standard language does not correspond to the plan’s coverage, which can confuse beneficiaries.

Mr. Tucker said PacifiCare has seen its M+C membership decline, mostly due to payment issues. On the burden front, reconciling payment when an enrollee’s status is outdated or erroneously listed takes too long, years in some cases, and systems glitches at CMS add to the data errors. Plans spend too much time chasing payments in what is supposed to be a pre-paid system. He recommended that plans enter the status data directly to the CMS system and be held accountable for its accuracy. CMS also needs to be more flexible in enforcing its enrollment and lock-in rules. In a recent case, PacifiCare split an M+C plan into two plans centered on different provider groups, and CMS required that they put all the beneficiaries into one plan or the other, rather than letting them stay with their primary care physicians. Many of the beneficiaries later switched back. 

Donovan Ayres, Blue Shield of California
Woodland Hills, California

Mr. Ayres said the marketing review process needs to be quicker and more flexible. In the urgent matter of a provider going bankrupt, it sometimes takes 45 days to get the needed beneficiary letter reviewed. He recommended that CMS review minor changes to "model documents" and the summary of benefits statement under the expedited 10-day review to avoid rush production costs. The agency should shorten the 45-day review generally and expand the "use and file" system for some materials. In addition, plans should have the same ability as Medicare carriers to deny incomplete claims.

Dr. Johnson said the ACR process is unnecessarily burdensome: managed care companies should be able to file a single ACR proposal for all plans in their different service regions. Plans often get caught crossways when CMS announces a new policy and then issues an interpretation that makes them change what they had implemented. Payment reconciliation for incorrect enrollee data takes too long. Monitoring systems do not prioritize requirements, which unnecessarily adds to burden. Review of marketing materials should be more selective and should not delay getting information to beneficiaries. Quality improvement projects should be flexible to make sense for local conditions.

9:50 A.M. Q&A

The committee discussed HIPAA’s likely impact on claims submission, what goes wrong with enrollee status data, and the laws governing enrollees’ selections of M+C plans.

10 A.M. PERSPECTIVES FROM BENEFICIARIES

Ms. Taylor said beneficiaries face shrinking provider networks, reduced drug benefits, more drug formulary restrictions, and large bills in cases when plans go bankrupt. Due to confusing language in the M+C instructions, some beneficiaries inadvertently end up back in fee-for-service Medicare when they meant to switch M+C plans. The administrative lag in enrollment changes means that in January, when the new enrollment is supposed to have already taken effect, beneficiaries are often asked to pay up front for their prescriptions. Because of a mismatch between zip codes and counties, the Medicare Compare database gives some beneficiaries information for the wrong county. Some operators at 1-800 Medicare give out incorrect information.

Mr. Griffith described how confusing instructions accidentally drop people out of M+C and back into fee-for-service Medicare. Lock-in provisions particularly impact people with second homes who travel and expect to switch managed care plans periodically.

Dr. Kirschner, a former Arizona Medicaid director and hospital administrator, said his 93-year-old mother in an M+C plan has trouble understanding managed care. The promises of the BBA 1997 have not been fulfilled. Beneficiaries are now seeing decreasing choice and benefits, with increasing complexity. Beneficiaries want stability, choice of plans and providers, and good information, including quality reports written in plain language. CMS should support SHIP and pharmacy benefits for all.

10:30 A.M. Q&A

The committee discussed the experience of Medicare+Choice beneficiaries who have been involuntarily disenrolled from their plans. They also discussed the quality of the Medicare Compare website, the Medigap Compare website and the Medicare & You booklet.

Randy Kammer, vice president for regulatory affairs with Blue Cross Blue Shield of Florida, said CMS has embarked on a number of administrative changes, but has a way to go. Payment increases set by Congress have not covered costs. CMS should streamline the ACR process: data collection for both commercial products and the ACR segments is a labor-intensive process. The requirement that one-third of ACRs are audited every year is burdensome, and some auditors are "tremendously unfamiliar" with the ACR process and the actuarial concepts. The CMS review of marketing materials should include more "use and file" submissions. Finally, plans often get inconsistent answers even within CMS regional offices.

Dr. George Burdick, past president of the Arizona Medical Association, said reimbursement to physicians under M+C was inadequate, and rural areas are underserved. EMTALA has been an "absolute disaster." It has put more ambulances on diversion status, and created lines at trauma centers. Requiring doctors to provide services for free is de facto slavery. Specialists are shunning hospitals and emergency room call duty. It’s particularly a problem for border communities, and many physicians are leaving. EMTALA should be repealed, not revised.

Michael Parks, an attorney, said changes in the M+C program have been hugely disruptive. He recommended that CMS contract with plans for two years rather than one; expand special enrollment periods to allow beneficiaries to change plans if their primary care physician leaves or if the managed care plan stops covering a specific service they need; require that promised benefits remain in effect throughout the year; set a floor that keeps cost sharing below that of regular Medicare; keep the review of marketing materials strong; and strengthen the provisions that require plans to explain beneficiaries’ rights to appeal coverage denials. On other topics, beneficiaries should have greater say in developing M+C policy, and Medigap plans should electronically coordinate their claims with Medicare claims.

Anita Merko, medical director for the Health Services Advisory Group, an association of peer-review organizations, said her organization supports the committee’s recommendation that peer review of alleged EMTALA violations be made mandatory early in the process. This step could eliminate a large number of unjustified allegations. CMS regional offices need more training and more consistency on EMTALA enforcement.

The committee discussed pressures on doctors and nurses, as well as what they learned on Wednesday’s site visits. Judith Sutherland and Heidi Margulis talked about the warm, caring and dignified atmosphere they saw at the Phoenix Mountain Nursing Home. Tony Fay talked about the difficulty the PacifiCare claims processing facility has in chasing down correct payments from the government for its Medicare + Choice enrollees. Mary Martin and Bill Toby heard how the Good Samaritan Hospital is being affected by EMTALA.

Dr. Jane Orient, who also spoke Wednesday, said M+C should treat patients like paying customers. Reducing regulations on plans will create a better marketplace. People need insurance and devices such as medical savings accounts, not "fluff and guaranteed rationing."

Dr. Wood summarized the written testimony of Dr. Elizabeth Valdez, executive director of Concilio Latino de Salud. She wrote that help for people with limited English proficiency is key, and medical translation is a quality-of-care issue. Proper translation services can reduce costs from medical errors and superfluous tests that are ordered because the patient cannot properly communicate symptoms to the doctor. Providers need to have an advance plan for translation services. The community can pool its resources by working with contract interpreters, community-based agencies, telephone translation services, and educational institutions.

The committee discussed the issues they had identified with MDS and M+C. HHS staff will provide technical guidance on these issues, and the subcommittees will work to refine them.

Updating MDS – Expediting the release of MDS 3.0 sooner than 2004; convening a panel for a collaborative improvement process; incorporating predictive software; fostering more real-time data analysis, including clinical uses; clarifying which data elements are needed for quality and for reimbursement; incorporating staffing standards and improvement measures; and establishing a common set of due dates.

MDS Data Use – Distributing data on quality to the public and for policy uses; adding case-mix adjustment to more of the quality indicators; making the reports facility-specific; designing summary data elements; revising the template for Nursing Home Compare; making data available more quickly; and examining the role of HIPAA on MDS data use.

MDS Across the Continuum of Care – Linking MDS with other data sets (OASIS); automating the process wherever possible throughout programs, including RAPS; exploring the impact of HIPAA; convening a panel and/or studies to establish a core set of data elements; collecting data less often but sharing it better among providers; exploring "Smart Card" technology to ease the transfer of patient data; and finding ways to make information follow the patient across the continuum of care.

Streamline MDS – Changing the way assessment for short-term stays is done; expanding the use of the shorter "quarterly" assessments for Medicare payment purposes, especially for chronically ill patients; and quantifying the payment-related elements on MDS.

Education – Updating the user guide and documentation, and encouraging more geriatric training in medical schools.

Link to Payment Systems – Looking at the number and specificity of MDS elements that are linked to payment.

Medicare Part A Problems – Looking at who is covered, what events can interrupt a spell of illness, and how information is shared and integrated.

Nursing Facility Reviews – Making reviews scalable; making high quality the main goal; finding ways to generalize reviews across programs; setting up performance goals; and focusing reviews on areas where the MDS data suggest problems.

Medicare + Choice-Related Issues

Ideas discussed included speeding up the payment reconciliation process for enrollee status errors by allowing managed care plans to enter data directly into CMS’s systems; simplifying the ACR filings; better training for CMS auditors and monitors, and including the affected plans in the training process; simplifying and expediting the review of plans’ marketing materials; clarifying information on the Medicare Compare website; streamlining data collection for risk adjustment; making risk adjustment budget neutral; examining CMS’s multiple roles as a regulator, an insurer and a purchaser; creating greater stability in the program for providers and better benefits for beneficiaries; being more flexible with enrollee selection and lock-in rules; addressing problems with beneficiary disenrollment; addressing balance billing in cases where plans or providers go bankrupt; fixing cases where enrollees get information for the wrong counties because of a mismatch with their zip codes; ensuring that CMS’s web site is accurate and up to date; creating a central source to route all Medicare-related questions; providing more information to people eligible for both Medicare and Medicaid.

In addition, the committee discussed advance beneficiary notices in emergency room settings and local medical review policies.