Improved Population Health and Reduced Per Capita Costs by Adopting CMS Successful Demonstration Programs


DOD health care costs have climbed from $19 billion in fiscal 2001 to $52.5 billion in fiscal 2012. An MHS purchased health care pilot could be performed by the TMA Operations Branch at no additional cost could adopt successful CMS demonstration programs in order to improve population health and better manage medical cost growth. MHS alignment with the Centers for Medicare & Medicaid Services (CMS) Medicare Shared Savings Program (Shared Savings Program) facilitates coordination and cooperation among providers to improve the quality of care for beneficiaries and reduces unnecessary costs. The pilot would include initiatives to improve beneficiary health outcomes by giving providers incentives to become more efficient.

TRICARE reimbursement follows Medicare inpatient and outpatient reimbursement whenever practicable. On March 23, 2010, the Patient Protection and Affordable Care Act (Pub.L. 111-148) was enacted. Following the enactment of Pub. L. 111-148, the Health Care and Education Reconciliation Act of 2010 (Pub.L. 111-152) (enacted on March 30, 2010), amended certain provisions of Pub. L. 111-148. These public laws are collectively known as the Affordable Care Act. The Affordable Care Act, section 3022, entitled the Medicare Shared Saving Program (Shared Savings Program), amended Title XVIII of the Social Security Act (the Act) (42 U.S.C 1395 et seq.) by adding the "Shared Savings Program", Section 1899, to the Act. Eligible providers, hospitals, and suppliers may participate in the Shared Savings Program by creating or participating in an Accountable Care Organization (ACO). The Shared Savings Program is designed to improve beneficiary outcomes and increase value of care by: • Promoting accountability for the care of beneficiaries • Requiring coordinated care for all services provided • Encouraging investment in infrastructure and redesigned care processes

The Shared Savings Program rewards ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first. Participation in an ACO is purely voluntary.

Value-based purchasing is a concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high quality, efficient clinical care. In addition to improving quality, value-based purchasing initiatives seek to reduce growth in health care expenditures. Value-based purchasing as an important step to revamping how care and services are paid for, moving increasingly toward rewarding better value, outcomes, and innovations instead of merely increased volume.

As an incentive to ACOs that successfully meet quality and savings requirements, the MHS pilot would involve sharing a percentage of the achieved savings with the ACO. Under the Shared Savings Program, ACOs will only share in savings if they meet both the quality performance standards and generate shareable savings. The pilot will focus on achieving the three-part aim consisting of: (1) Better care for individuals; (2) better health for populations; and (3) lower growth in expenditures.

In addition, MHS can initiate pilot programs, under the TMA Operations Branch at no additional costs, based on other successful CMS demonstrations. An outpatient physician and group practice pay for performance pilot could follow the Medicare program Physician Group Practice Demonstration (BIPA 2000), which rewarded physicians for improving the quality and efficiency of health care services for Medicare fee-for-service beneficiaries. It involved 10 large group practices ( > 200 physicians), which earned performance-based payments as a reward for achieved savings compared with a control group.

An MHS pilot could follow the Medicare Care Management Performance Demonstration (Medicare Modernization Act [MMA] section 649), which promotes the use of health IT to improve the care of chronically ill patients. Bonuses are paid to doctors who “meet or exceed performance standards … in clinical delivery systems and patient outcomes,” as defined by CMS. This program is focused on small- and medium-sized practices in Arkansas, California, Massachusetts, and Utah. Another MHS pilot could follow MMA section 646 (the Medicare Health Quality Demonstration) by examining projects that enhance patient safety and reduce variations in utilization through the use of evidence-based care and best practice guidelines. It includes physician groups and local or regional integrated health systems.

Following CMS demonstrations, a disease management pilot administered by OCMO can look at the management of patients with chronic complex disease states, such as congestive heart failure, diabetes, end-stage renal disease, or coronary artery disease. The Chronic Care Improvement Program (MMA section 721) is a pilot program to evaluate disease management programs aimed at particular patient populations (i.e., those with congestive heart failure and/or complex diabetes) and includes companies specializing in disease management, as well as larger organizations such as insurance companies. Participating organizations are required to guarantee CMS a savings of at least 5% plus the cost of monthly fees compared with a similar population of beneficiaries. Additional disease management demonstrations include programs aimed at patients with end-stage renal disease, those with severe chronic illnesses, and chronically ill dual beneficiaries.

In summary, MHS pilots following CMS successful demonstrations will improve population health in addition to bending the MHS cost curve by reducing cost and removing inefficiencies.

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