Los Angeles Times: Obama Administration Pushes Forward on Healthcare Partnerships


By Noam N. Levey

Washington Bureau

October 20, 2011

Working to salvage a much-touted initiative in the new healthcare law aimed at controlling costs, the Obama administration issued revised regulations Thursday to encourage doctors, clinics and hospitals to take greater responsibility for improving patients’ care.

The rules will reward healthcare providers who form partnerships to reduce the cost of caring for Americans on Medicare while also boosting quality, two goals of the sweeping overhaul the president signed last year.

These partnerships — known as Accountable Care Organizations, or ACOs — have been held up by many experts as one of the most promising remedies for the poor outcomes and high costs that bedevil the American healthcare system.

Proponents believe that the partnerships could ultimately save taxpayers billions of dollars by better coordinating the care that patients get and replacing the current fragmented system in which patients bounce between doctors and hospitals with little communication between providers.

“ACOs … can represent a very big step forward in helping to transform Medicare, Medicaid and the Children’s Health Insurance Programs so they can help assure high quality, seamless and less costly healthcare,” said Dr. Donald Berwick, who oversees the Medicare and Medicaid programs and worked on the new rules.

The model outlined by the Obama administration would require participating groups of doctors, clinics and hospitals to take responsibility for managing the care of at least 5,000 Medicare patients.

If they reduce the cost of caring for these patients while also hitting benchmarks that measure how good the care they are delivering is for patients, the medical providers could share in the savings with the Medicare program.  

Spurred in part by the new healthcare law, private insurers, hospitals and doctors are already exploring these kinds of shared-savings partnerships in the private sector.

But the Obama administration has wrestled with how to craft rules that would provide the right financial incentives to doctors and other providers to form these partnerships to care for the more than 45 million elderly and disabled Americans who rely on Medicare.

And the administration’s first proposal, released in March, was criticized as unworkable, in large part because it demanded too much from medical providers.

The new rules released Thursday ease some of the restrictions.

The administration reduced the number of quality measurements from 65 to 33, for example, and eased a requirement that participating medical providers use electronic medical records.

And it created a system to allow doctors and other providers to sign up without taking responsibility for paying the Medicare program if they cannot produce savings.

Providers who agree to assume the additional risk of cost overruns could get bigger rewards.

“We have made changes in response to what we heard,” Berwick said. “I think they make the program more attractive.”

Initially, between 50 and 270 ACOs may sign up for the program and save the Medicare program as much as $950 million over four years, according to estimates from independent federal actuaries.

Los Angeles Times: High court hears key Medicaid case


At issue is whether judges can stop cash-strapped states from cutting their payments to healthcare providers.

By David G. Savage, Washington Bureau

8:40 PM PDT, October 3, 2011

Reporting from Washington

The Supreme Court justices opened their new term Monday by hearing a major healthcare case that tests whether judges can stop California and other cash-strapped states from cutting their payments to doctors and hospitals who serve low-income patients.

The case heard Monday will probably affect how much money is available to pay for medical care for more than 50 million Americans, about half of them children, who depend on Medicaid.

Since its creation in 1965, Medicaid has been a cooperative effort and jointly funded by the federal government and the states. But that cooperation is being tested as states face huge budget deficits. Over the last three years, the California Legislature voted a series of cuts, up to 10%, in its payments to providers of Medi-Cal.

The providers went to court in San Francisco arguing that California was violating federal law by imposing the cuts. They said the reduced payments were so low that patients would be denied the care they needed. In response, federal district and appeals court judges issued orders blocking the cuts from going into effect.

Lawyers for California, backed by other 31 states, appealed to the high court, and were joined by the Obama administration. Together, they argued that disputes over Medicaid funding should be resolved by healthcare administrators in Washington and Sacramento, not by judges in San Francisco.

The dispute “cries out for administrative review,” not an order from a judge blocking the state’s action, Karin Schwartz, a California deputy attorney general, told the justices.

Chief Justice John G. Roberts Jr. said he agreed with the state’s view, since Congress had not given private parties a right to sue under the Medicaid Act.

But Justices Ruth Bader Ginsburg and Elena Kagan spoke up for the medical providers who sued. They said California was seeking to cut its reimbursements even before the state had cleared the move with federal Medicaid officials in Washington. Ginsburg said there was no effective way to enforce the Medicaid Act if patients and providers could not go to court when spending was slashed.