ICYMI: AHIP Letter to HHS Secretary Sebelius
Posted by The Campaign on March 16, 2010 at 11:31 AM
AHIP sent a letter to HHS Secretary Sebelius yesterday to respond to her request for specific cost savings recommendations that could be included in the current legislation. Below are a few highlights from the letter:
Increased Transparency
To address your request for greater transparency, we immediately began working with the National Association of Insurance Commissioners (NAIC) to develop a template our members can use across the country to provide information on the factors that are driving premium increases.
As you request transparency from our members, we urge you also to consider pursuing transparency for hospitals, physicians, pharmaceutical and device companies, and other suppliers.
First Do No Harm
We are particularly concerned that there are inadequate incentives in the legislation to bring everyone into the system, that new age-rating requirements would drive up costs for younger families, and that the proposed premium tax on health insurers would further drive up costs for consumers in the individual and small group markets.
Limiting the amount by which premiums can vary by age can have particularly significant effects for young adults, as moving from a 5:1 to 3:1 rating band...raises rates for adults under age 30 by approximately another 30 to 50 percent beyond that projected for the population as a whole.
Enacting insurance reforms and coverage expansions without meaningful cost control will bring more people into an unsustainable, unaffordable system.
The Senate legislation would establish a new commission to review Medicare and private sector health care spending. That is a start, but it will not provide the comprehensive oversight needed because it would exempt Medicare payments for hospitals, physicians, and other key services from review during the first five years.
Payment Reform
Within a comprehensive framework for cost containment, we recommend broadening and expediting certain provisions of the Senate bill that focus on realigning incentives and promoting innovation. The following are several specific examples:
- To reduce preventable hospital readmissions, we recommend strengthening the Senate bill's proposal to require modest Medicare payment reductions for hospitals with unnecessary risk-adjusted readmissions for three conditions. Increasing the amount of the payment reduction and applying it to a broader range of conditions will create stronger financial incentives for improvements in patient care, thereby reducing unnecessary admissions that are contributing to higher costs while also improving patient safety and quality.
- To reduce hospital-acquired infections, we recommend building upon the Senate's proposal to reduce Medicare payments by one percent for the worst performing hospitals on medical conditions identified by the Secretary. The Senate proposal would be more effective if it established a stronger financial incentive and applied to all "never events" identified by the National Quality Forum.
- To accelerate the adoption of payment reform and quality improvement, incentives under the Value-Based Purchasing program should be accelerated forward to begin in 2011 with final recommendations by 2015. By building on existing collaborations to tie hospital performance on quality measures to common high-cost conditions (AMI, Heart Failure, Pneumonia, etc.), we can more rapidly move away from traditional fee-for-service structures.
- To advance new payment reform models on a system-wide basis, we recommend that the Senate proposal for a CMS Innovation Center be expanded beyond Medicare and Medicaid. Focusing solely on public programs will not improve the overall health care system.
- To improve the value of comparative effectiveness research and the proposed Patient Centered Outcomes Research Institute, we recommend that such research focus on both the clinical and cost effectiveness of treatments.
Provide Malpractice Protections for Doctors
To reduce the burden of defensive medicine, a fresh approach to medical liability reform should be adopted that combines a safe harbor for following evidence-based medicine and a system to ensure that harmed individuals are compensated adequately. As an alternative to the existing litigation system, we recommend an approach that offers protections for providers who follow established best practices and implement safe, accountable care models based on the latest scientific evidence.
