Lazarte 1

Thomas Lazarte

Summer Dupree

English 201

04/02/2017

Transitioning Away From Fee for Service in Healthcare:

Abstract

How has The Affordable Care Act affected the quality of patient care among the

chronically ill population? Since the signing of the Affordable Care Act in March of 2010

healthcare has been changing at an increasing rate. One of the many changes enacted by the bill

was to change or modify how traditional hospitals and healthcare providers received payment for

CMS (Center of Medicaid and Medicare). Also, how to change the structure of our healthcare

system to focus on best outcomes and preventive medicine rather than the fee for service model.

After reading The Affordable Care Act (which will be referred to as the Act) and researching

all the programs and incentives that CMS (Center for Medicare and Medicaid Services) has

implemented by cause of the bill, I will show that the research speaks for itself how the quality

has been improved.

 Lazarte 2

Introduction

The Affordable Care Act, otherwise known as Obamacare has been in talk a lot as of

recent due to the failed attempt to repeal and replace it. There is much to be said about the Act

and how it has and is changing healthcare as we know it. Besides giving subsidies to insurance

providers to provide healthcare coverage to all income demographics, there is much more that

the Act provides. The Act offers grants and funding for preventive medicine practices, and health

screenings for the workforce, elderly and the chronically ill. Its additional purpose is to start

initiative programs for hospitals, states, and providers to seek preventive methods to achieve

better quality.

The focus of all this is the chronically ill population which include any individual that has

a chronic illness as described in the chronic conditions by CMS such as, diabetes, COPD,

congestive heart failure, Alzheimers, etc. To clarify, since there are many debts to be had on how

the act has affected our economy, debt, and the free market I am going to restrict my argument to

stay on healthcare performance and clinical outcomes to focus just on how it the Act has affected

quality. I will also be focusing just on the chronically ill patient population and elderly since

those populations are generally categorized in the same group. My goal is to show with clear

evidence how affordable care act has had an impact on healthcare and patient care quality.

Re-Hospitalizations

Along with many others the Act gave some accountability to the hospitals for their

patients who return for another admission to the ER within 90 days for the same diagnosis. This

accountability is known as reimbursement withholdings or penalties for these returning

patients, this is part of the value based method the Act is implementing. According to a report by

Jordan Rau by Kaiser Health News the federal governments readmission penalties on hospitals
 Lazarte 3

will reach a new high as Medicare withholds more than half a billion dollars in payments over

the next year. The idea is simple, penalize the hospital for the re-admissions thus incentivizing

more quality care. This would in turn potentially solve two major issues with healthcare, the cost

and quality.

There can be no doubt that the cost plays a major factor on quality and it needs have a

place in the discussion. Medicare takes 14% of the government budget according to an article by

The Henry Kaiser Family Foundation, which in the same article it states that of the 14%

Medicare budget 23% is due to Hospital inpatient services, which for the record that is 137

billion dollars. With Medicare costs on the rise that follows suit with the increase of chronic

illness in the country, there is a clear understanding that something has to be done. Regarding the

Quality, the average national readmission rate is 19.5% which according to Mercola in an article

in 2014 it claimed that one in 25 patients contract a hospital acquired infection. This being multi-

drug resistant infections for which an antibiotic may not be enough or very harmful to any

individual with a low immune system. For anyone with a chronic illness or an elderly patient this

is very dangerous. Thus, cost and quality are interrelated and require a delicate balance.

Unfortunately, this doesnt mean that the hospital will spend more resources on keeping

you healthy and if so certainly not their own resources. As an example, I will use the data from

St. Alphonsus Hospital located right here in Boise Idaho. In report from the Advisory Board it

states that Saint Alphonsus is estimated to lose $704,555 this year 2017. With an annual revenue

of over 700 million dollars this is of little importance. Though the health system has been

penalized it really hasnt been enough to make any sort of impact. To summarize The Act is

penalizing the hospitals for the lack of care provided however it may not be enough to make a

difference.
 Lazarte 4

ACOs

Another major change by the Affordable Care Act was the start of an ACO or an

Accountable Care Organization. An ACO was created to promote coordinated care, its a group

of insurances providers, hospitals, and providers. CMS created many but there are some private

ACOs as well. The goal here is to minimize the excess cost of Medicare and Medicaid expenses

and lack of coordinated care by banning together and since 10% of Medicare patients cost for

90% of Medicare expenditures this is especially important for the chronic care population. The

ACO receives a percentage of the reduced cost that they save, this being their main incentive

from Medicare. So, has is helped? Well once again its more complicated than that. ACOs saved a

approximately 280 million in their first year, while many see this as a success however ACOs

across the board have been dropping one by one, so why the change if the program seemed a

success? In an article by Jacqueline DiChiara titled Why Did Experienced Accountable Care

Organizations Fail? she interviews Johnathan Niloff, MD where he said that A number of the

parameters of the original Pioneer Program did not create the optimal environment for an

organization to be able to manage an at-risk population from a perspective of coordination of

care across the continuum. In other words, the risk management was too much to take on for the

private organizations and the longevity was one of the key factors. She uses basic logos to

penetrate your understanding while dealing with real dollars and tangible evidence persuading us

to see the basic fundamental flaws with Acos. The benchmark methodology was too difficult

and causing many to leave the program. Since an ACO is voluntary the ACOs run privately are

the ones to watch for indications of success.

 Lazarte 5

Bundle Payments

Bundle payments is another inventive program brought on by the Affordable Care Act to

increase the shared risk and benefits. To put in simply the bundle payment program is giving a

hospital a large amount of money to manage for any given visit to the hospital but if the patient

returns for the same problem or illness there will be no reimbursement for the visit. It is very

similar to the penalties, but the main difference is the hospital would be in a position to gain

much more benefits through this incentive program than the traditional penalty method. The

issue here again is to high risk sharing. The current infrastructure is not prepared to manage

outpatient care appropriately. With any hospitals already opting out of this program there are

some still willing to try our hospital her in Boise Idaho Saint Alphonsus is one such hospital

taking on this risk, we can only wait and see. Overall the attempt to inventive hospitals on this

regard was a swing and a miss most would agree.

Macra

With the start of The Affordable Care Act was the start of quality measures or

requirements to ensure consistent quality. They are called MIPS and PQRS but with the start of

2017 both programs were consolidated to being called MACRA. Macra which stands for

Medicare Access and Chip Reauthorization Act is a required program to all Medicare

reimbursement recipients. Its goal is to promote one again low readmissions and better

coordinated care. Though this was not part of the Affordable Care Act its impossible to say that

it didnt influence the quality measures of healthcare. The program along with a number of

things requires providers to summit individual claims to CMS to demonstrate how a curtain

quality measure was implemented in there plan of care. There is a complete list of the 240+
 Lazarte 6

quality measures on CMS. One quality measure is the use of an electronical medical records or

EMR to better protect patient information and privacy. When complied with, the program offers

the provider an increase in the reimbursement amount, failure to do so will result in a penalty.

The Future

The research seems to suggest that we are only going to be seeing more inventive

programs to promote better quality of care. One such item that keeps appearing is the use of tele-

medicine services and remote case management. Tele-medicine is a device or tablet that is kept

by the patient and he or she inputs daily vitals and is transmitted to their primary care provider

thus providing closer watch over patients. The technological innovations introduced in the last

few years to inpatient care have been very successful in providing better quality of care. The

greatest example is the remote intensive care unit monitoring of patients by medical doctors

trained in intensive care unit care This technology has improved medical care in remote

communities and even in urban areas where the availability of this type of specialty care is

lacking. This remote monitoring has provided first rate care to patients that otherwise could not

due to lack of specialists in this area. I believe that the next step will be for Medicare to start

reimbursing for tele-medicine services in the next couple of years or so.

Conclusion

There was been many attempts to improve quality of healthcare and reduce cost and at

the forefront was the Affordable Care Act. While many of these programs may have seemed to

have failed several seem to successful for the time being. Its important to remember that when
 Lazarte 7

talking in terms of healthcare to focus always in the outcomes not necessarily the marginal

benefits the to bottom line. I think that the Affordable Care Act in regard to quality improvement

was trying to accomplish both goals by putting government spending to the private sector to

improve quality and outcomes. There have been modest improvements and this is significant all

things considered equal.

Work Cited

"COMPILATION OF PATIENT PROTECTION AND AFFORDABLE CARE ACT." 111TH

CONGRESS 2d Session, 11 Mar. 2010. Web.

 Lazarte 8

"2015-12-10-2." CMS.gov Centers for Medicare & Medicaid Services. N.p., 10 Dec. 2015. Web.

11 Apr. 2017.

24, 2015 Jul. "The Facts on Medicare Spending and Financing." The Henry J. Kaiser Family

Foundation. N.p., 04 Aug. 2015. Web. 11 Apr. 2017.

"CC_Main." CMS.gov Centers for Medicare & Medicaid Services. N.p., 18 Jan. 2017. Web. 11

Apr. 2017.

"Centers for Medicare & Medicaid Services." CMS.gov Centers for Medicare & Medicaid

Services. N.p., n.d. Web. 1 Apr. 2017.

Gold, Jenny. "Accountable Care Organizations, Explained." Kaiser Health News. N.p., 13 July

2016. Web. 11 Apr. 2017.

"Healthcare-associated Infections." Centers for Disease Control and Prevention. Centers for

Disease Control and Prevention, 05 Oct. 2016. Web. 11 Apr. 2017.

Hoffman, Jim. "Overview of CMS Readmissions Penalties for 2015 - BESLER." Protecting and

Enhancing Revenue for Hospitals. N.p., 01 Dec. 2015. Web. 11 Apr. 2017.

Mercola, Dr. "1 in 25 Patients End Up with Hospital-Acquired Infections." Mercola.com. N.p.,

n.d. Web. 11 Apr. 2017.

"Overview." CMS.gov Centers for Medicare & Medicaid Services. N.p., 06 Jan. 2015. Web. 11

Apr. 2017.

"Rethinking the Hospital Readmissions Reduction

Program." Http://www.aha.org/research/reports/tw/15mar-tw-readmissions.pdf. AMERICAN

HOSPITAL ASSOCIATION, n.d. Web. Mar. 2015.

"The 2,597 hospitals facing readmissions penalties this year." Advisory Board Daily Briefing.

N.p., n.d. Web. 11 Apr. 2017.

 Lazarte 9

RevCycleIntelligence. "Why Did Experienced Accountable Care Organizations

Fail?" RevCycleIntelligence. N.p., 17 Mar. 2016. Web. 11 Apr. 2017.