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Beyond the “Doc Fix”: The Better Care, Lower Cost Act of 2014

The collective gaze of the health care community is squarely focused on the 113th Congress, wherein the long-overdue repeal of Medicare’s sustainable growth rate (SGR) formula as the basis for payments to those who offer health care services is the subject of ongoing bipartisan and bicameral conversations. The critical importance of these deliberations and of the hoped-for “doc fix” can hardly be overstated.

Eli Adashi, MD, MS

With less than 2 months remaining until the March 31, 2014, deadline, Congress has a historic opportunity not only to repeal the SGR provision, but also to replace the time-honored fee-for-service payment paradigm (“pay for volume”) with a quality-driven substitute (“pay for value”). In so doing, Congress could further “bend the cost curve” while establishing a more rational—let alone more affordable—health care system. Whether Congress will seize the moment remains to be seen. The prospect of yet another temporizing SGR “patch” is all but unthinkable.

On January 15, 2014, barely a week into the resumption of the doc fix deliberations, Sen Ron Wyden (D, Ore), Sen Johnny Isakson (R, Ga), Rep Erik Paulsen (R, Minn), and Rep Peter Welch (D, Vt) unveiled the Better Care, Lower Cost Act of 2014, or BCLCA for short (S 1932 and HR 3890). As articulated by the sponsors, the purpose of the BCLCA is to “establish a Medicare Better Care Program [BCP] to provide integrated care for Medicare beneficiaries with chronic conditions.”

As written, the BCLCA is the brainchild of Sen Wyden, who—not unlike many other baby boomers—is about to join the ranks of Medicare this year when he turns 65 years old. Not surprisingly, the BCLCA bears all the marks of other bills and plans sponsored by the senator from Oregon: the now familiar “big think,” the reliance on the best available evidence, and the characteristic bipartisanship. Past examples include—but are not limited to—the Wyden-Bennett Healthy Americans Act, the Wyden-Judd Tax Fairness and Simplification Act, and most recently, the Wyden-Ryan Bipartisan Plan for Health Care and Medicare Reform. With Sen Wyden slated to assume the leadership of the Senate Committee on Finance (with jurisdiction over Medicare, Medicaid, and the Children’s Health Insurance Program), the BCLCA is likely to receive a thorough hearing.

“Dealing with chronic disease, protecting the Medicare guarantee, and holding down costs—that’s the ball game for Medicare,” said Wyden about the bill. “That’s where the money is!”

The timing of the announcement of the BCLCA may not have been optimal. Overshadowed as it was by the SGR debate, the newly minted bill hardly received the attention it deserved. This latest round of potential Medicare reform, which focuses on people with chronic illnesses and the coordination of their care, presents a compelling rationale. As recently as 2010, 68% of Medicare enrollees were afflicted by 2 or more chronic conditions, thereby accounting for $487 billion in annual Medicare spending, or 93% of the entire Medicare outlay. It follows that cost savings—if realized—could be substantial.

The potential advantages for Medicare beneficiaries appear equally real. Any improvement in the coordination of the care of Medicare beneficiaries would go a long way toward addressing one of the more egregious deficiencies of the current health care delivery system.

According to a summary about the bill from Sen Wyden’s office, at its core, the BCLCA “removes the barriers preventing Medicare providers from focusing on the chronically ill and helps ensure that seniors have access to specialized, patient-centered chronic care no matter where they live.” More specifically, the BCLCA relaxes federal rules that preclude physicians from offering specialized chronic care to those in need. In so doing, the BCLCA seeks to move Medicare from its current focus on illness to one that promotes wellness.

To accomplish its stated goals, the BCLCA targets those at risk to receive care so as to preempt further deterioration of the relevant disease state. In addition, the BCLCA is supportive of both physicians and nonphysician providers as leaders of coordinated, high-quality, affordable BCP teams. As envisioned, the BCP care teams will be deployed nationwide with an eye toward ending geographic disparities. Current expectations are that Medicare will approve as many as 250 BCPs that will be preferentially located in communities where chronic disease is prevalent.

The basic BCP care team envisioned by the BCLCA is best thought of as an accountable care organization (ACO) variant dedicated to people with chronic illnesses. As such, BCPs are highly reminiscent of the coordinated care organizations, another ACO variant now operating in Oregon in the service of the state’s Medicaid program. As is true for ACOs, BCPs embrace care coordination as their guiding principle. They will address the all-important need to coordinate the care of Medicare beneficiaries who are being seen and treated by multiple specialists and primary care providers. The BCLCA specifies that Medicare will compensate dedicated care coordinators, whose tasks will include scheduling and tracking a patient’s visits to physicians as well as sharing and disseminating relevant information among these clinicians.

In addition—not unlike ACOs—BCP providers and plans will be required to meet quality standards while being “fully responsible for the cost, care, and outcomes of their enrolled patients,” according to Physicians for a National Health Program. Participating health systems or provider groups will receive a capitated fee per enrollee and will keep any savings realized but will be at risk for losses incurred. The range of services offered by BCPs would be commensurate with required Medicare benefits, including outpatient visits, hospital care, and postacute care, to name a few. In a departure from ACOs, all of the beneficiaries enrolled in BCPs will undergo standardized health and functional assessments and receive a care plan tailored to the patient’s specific needs and conditions. Long-term services (for example, long-term care) will not be provided.

Going forward, the BCLCA will likely be taken up by the Senate Committee on Finance, which will debate, amend, and rewrite it. Should the bill (or a version thereof) be approved by a majority vote in that committee (as expected), it will move to the Senate. If and when the bill is brought to the Senate floor, it is likely to follow 1 of 2 routes. The bill could be considered on its own, independent of other legislation. Or the bill could be incorporated into the pending SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013 (S 1871), due to be enacted by March 31. Under these circumstances, a bill encompassing several major Medicare reforms would be considered in the aggregate, thereby signaling a fundamental shift in the direction of Medicare. A parallel if less predictable path may be envisioned for BCLCA’s House twin.

All told, the reforms in question—if written into law—will profoundly alter US health care for years to come.

About the author: Eli Y. Adashi, MD, MS (Eli_Adashi@brown.edu) is Professor of Medical Science at the Warren Alpert Medical School of Brown University in Providence, RI. A member of the Institute of Medicine, the Association of American Physicians, and the American Association for the Advancement of Science, Dr Adashi has focused his writing on domestic and global health policy at the nexus of medicine, law, ethics, and social justice. A former Franklin fellow, Dr Adashi served as a senior advisor on Global Women’s Health to the Secretary of State office of Global Women’s Issues during the first term of the Obama Administration.
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