Blog & News
HPM Seminar Series: The Next Wave of Health Care Reform - April 12th
April 05, 2019:Join us for a lively discussion of the current state of health reform in the United States. Professor Lynn Blewett will facilitate a discussion with the Kaiser Family Foundation’s Larry Levitt on recent and perhaps pivotal events in health policy. We will discuss the latest ruling by a federal judge on Kentucky and Arkansas Medicaid work requirements, the recent ruling on Association Health Plans, and the announcement by the President for renewed efforts to repeal the Affordable Care Act. We will also look ahead to the future of the U.S. health care system and discuss the recent Medicare for All proposals, health care as a presidential election issues and Medicaid and Medicare buy-in proposals. You won’t want to miss it! Everyone is welcome to attend this seminar. Light refreshments served.
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Blog & News
New Issue Brief Examines Ohio Strategy to Improve Opioid Prescribing Through Payment Reform
March 05, 2020:In an effort to improve quality and contain the growing cost of health care, states are increasingly undertaking a shift away from fee-for-service reimbursement models that reward quantity of services and moving toward alternative payment models that reward value. Many of the states leading the way in payment and delivery system reform have received State Innovation Model (SIM) awards from the Center for Medicare & Medicaid Innovation (CMMI) that have aided in accelerating that work.
In a new issue brief, SHADAC senior research fellow Colin Planalp profiles the innovative work in Ohio to link the state’s payment and delivery system reforms with another important policy priority: interventions to curtail the opioid crisis.
This paper was produced collaboratively by SHADAC and the Center for Health Care Strategies (CHCS) with support from the Center for Medicare & Medicaid Innovation (CMMI). SHADAC and CHCS are part of a team led by NORC at the University of Chicago that serves as the SIM Resource Support Contractor. SHADAC and other technical assistance partners support states and the Innovation Center in designing and testing multi-payer health system transformation approaches.
Improving opioid prescribing practices through payment reform
In 2014, Ohio became one of seventeen states to receive a SIM test award from CMMI in order to implement payment and delivery system reforms aimed at controlling the cost and enhancing the quality of health care. Acting as laboratories of innovation, each state employed a unique strategy tailored to their specific situation.
One of the key components of Ohio’s SIM was developing “episodes of care” as an alternative to fee-for-service payments for some types of discrete health care conditions such as an appendectomy, colonoscopy, or treatment of an ankle sprain. Under the episodes of care payment model, participating Ohio providers are eligible for incentive payments if they meet targets for both cost containment and quality performance.
During the payment model development process, staff from the Ohio SIM team recognized that many of the state’s planned episodes focused on procedures such as spine and joint surgery, which they knew were associated with prescription opioid painkillers—a topic of particular concern in Ohio, which has some of the highest rates of opioid overdoses in the U.S.
Based on that realization, the state analyzed its Medicaid claims data and identified potential episodes that represented a large share of opioid prescribing. Afterward, they worked with a consultant and stakeholders to develop evidence-based quality measures for appropriate opioid prescribing. The state then built those quality measures of appropriate opioid prescribing into approximately a dozen episodes of care—such as dental tooth extractions and treatment of lower back pain—as part of a two-pronged strategy: 1) by giving health care providers information on their performance for opioid prescribing quality measures compared to benchmarks; and 2) by using their performance to influence their eligibility for incentive payments, the state aims to leverage its payment reform efforts to reduce inappropriate prescribing of opioids and ultimately mitigate the opioid overdose crisis.
For more information on Ohio’s SIM work to improve opioid prescribing and examples of SIM projects in other states, read the issue brief on CHCS's State Innovation Model Resources Page.
Suggested Further Reading
Quality Measurement for HCBS and Behavioral Health in Medicaid: What’s Happening and What’s Missing
Aligning Quality Measures across Payers
New SHADAC Issue Brief Highlights Lessons Learned from SIM States Working to Align Quality Measures
SHADAC Releases 50-State Analysis of the Evolving Opioid Crisis (Infographics)
Blog & News
New SHADAC Article for INQUIRY Estimates the Cost of National and State-Level Reinsurance Programs for Stabilizing the Individual Health Insurance Markets
March 05, 2020:In hopes of stabilizing individual insurance markets, the idea of reinsurance—a product designed to protect health insurers against the financial risk of covering high-cost enrollees—has attracted bipartisan interest from state and national policymakers.
Alaska, Minnesota, and Oregon have already implemented state-based reinsurance programs under the Affordable Care Act’s (ACA) 1332 State Innovation Waivers and further waiver applications have been approved for reinsurance programs to begin this year in Maine, Maryland, New Jersey, and Wisconsin, with the Centers for Medicare and Medicaid Services (CMS) recently releasing 2019 federal pass-through funding amounts for each program.
In a new article for INQUIRY: The Journal of Health Care Organization, Provision, and Financing, SHADAC researchers Lynn A. Blewett, PhD, and Brett Fried, MS, along with Coleman Drake, PhD, at the University of Pittsburgh, estimate the costs of implementing state-based reinsurance programs in four large states whose size provides a useful cost-projection base for other state policymakers considering reinsurance programs.[1] The article also projects the cost of a federal reinsurance program, which existed on a temporary basis when the ACA first launched in 2014 and expired in 2016.
State-based Reinsurance Programs
Using health spending data from the 2007-2016 Medical Expenditure Panel Survey (MEPS) and state demographic and health insurance coverage data from the 2015-2017 Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), the article examines the potential for state-based reinsurance programs in California, Florida, Illinois, and Texas.
The authors’ calculations encompassed a variety of hypothetical reinsurance program models. All projections used a reinsurance cap of $250,000, but varied the lower-limit of reinsurance coverage from $20,000, $40,000, and $60,000, and also adjusted the percent paid to insurers from 70 percent to 80 percent to 90 percent.
For California, estimated program costs ranged from $0.7 billion to $2.3 billion. Florida’s estimated started at $0.5 billion and grew to $1.6 billion. Projected costs in Illinois varied between $0.2 and $0.8 billion, and estimates for a reinsurance program in Texas went from $0.4 billion up to $1.3 billion.
Federal Reinsurance Program
In recent years, Congress has also considered proposals to reinstate a federal reinsurance program, which would support state-based reinsurance by directly appropriating funds for financing outside of the ACA state waiver approval process.
Using the same MEPS and CPS-ASEC data sets, the paper projects that a national program with an average 80% payment rate and a lower limit of $40,000 would cost $30.1 billion from 2020 to 2022, or roughly $10 billion per year—an estimate in line with projections from the Congressional Budget Office (CBO) and the budget limits provided in the Bipartisan Health Care Stabilization Act.
Conclusions
Though the authors present a strong case for reinsurance as a robust tool that can help steady the individual market, they note that it is only one part of the solution for successful stabilization. Other potential policies that could be implemented in conjunction with reinsurance include:
- Altering risk adjustment payments to help lower premiums
- Recreating a risk corridor program to encourage insurer participation
- Restructuring premium tax credits to increase enrollment and incentivize healthy individuals to join the marketplace
Read the full article for more detail on the data and methodology used to estimate costs of state and national reinsurance programs.
Suggested Further Reading
Resource: 1332 State Innovation Waivers for State-based Reinsurance
Modeling State-based Reinsurance: One Option for Stabilization of the Individual Market
[1] This project was funded in part by a grant from the Robert Wood Johnson Foundation.
Publication
SHADAC in INQUIRY: Estimating National and State-Level Costs of a Reinsurance Program to Stabilize the Individual Health Insurance Market
Reinsurance, an insurance product designed to protect health insurers against the financial risk of covering high-cost enrollees, has attracted bipartisan policy interest as a mechanism to stabilize individual health insurance markets. Three states—Alaska, Minnesota, and Oregon—have implemented state-based reinsurance programs under the Affordable Care Act’s 1332 State Innovation Waivers. Reinsurance waivers have also been approved (and given funding estimates) to begin this year in Maine, Maryland, New Jersey, and Wisconsin.
In a new article for INQUIRY: The Journal of Health Care Organization, Provision, and Financing, SHADAC researchers Lynn A. Blewett, PhD, and Brett Fried, MS, with former UMN Health Services Research, Policy and Administration graduate student Coleman Drake, PhD, estimate the costs of implementing both a national and state-based reinsurance programs. Using health spending data from the 2007-2016 Medical Expenditure Panel Survey (MEPS) and state demographic and health insurance coverage data from the 2015-2017 Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), the article projects that a federal reinsurance program would cost $30.1 billion in 2020-2022. The article also examines the potential for, and estimated costs of, state-based resinsurance programs in four states—California, Florida, Illinois, and Texas.