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Readmission rates vary widely in bundled-payment program

FierceHealthcare reports:

“Participants in a new voluntary bundled payment model will have a lot of work to do to bring down high readmission rates for certain conditions.

But that won’t necessarily scare off prospective participants.

Analysis from Avalere Health found a wide variation of readmission rates among conditions covered under the Bundled Payments for Care Improvement (BPCI) Advanced model, which was announced by the Trump administration in January and will go into effect later this year.”

To read the article, please hit this link.

Will GOP keep a test kitchen for healthcare reform?




For Kaiser Health News

Joint replacements. Cardiac care. Chemotherapy.

What do those things have to do with the repeal of the Affordable Care Act?

Economists and policymakers think the U.S. may be overpaying for such services, which helps drive up healthcare expenses for everyone. And the health law has a program that includes testing new ways to pay for care — including in those three areas — that might result in better quality and lower costs.

But with the ACA up for potential repeal, what happens to that testing now? One of the emerging questions is whether Congress will save all or part of that effort, known as the Center for Medicare & Medicaid Innovation.

Republican lawmakers have complained — along with some in the healthcare industry — that the law under the Obama administration gave too much authority to the head of the Department of Health and Human Services to create and expand projects. Now, however, that very same authority may look appealing as Republicans head the department and may want to use the center to test their own ideas, including those that would revamp Medicare or Medicaid.

“You can dislike that authority, until you have the opportunity to use the authority,” said Rodney Whitlock, a vice president at ML Strategies, a government consulting firm in Washington, D.C., and former Republican staff member of the Senate Finance Committee.

As they debate and discuss ways to repeal the Affordable Care Act, lawmakers will weigh the innovation center, funded through the health law with $10 billion for 2011 to 2019, and another $10 billion for each subsequent decade. The Congressional Budget Office estimates the center would increase federal spending initially, but ultimately result in lower costs and save up to $34 billion over the next 10 years.

Congressional Republicans have not yet hinted whether they will keep, modify or kill the program but they generally support the cost-saving goal of the center and many observers think they will want to preserve it.

“If healthcare providers can do a better job of delivering patient care … at the same or lower costs, that’s the kind of flexibility the system needs more of,” said Mark McClellan, a professor of health policy at Duke University who headed Medicare for two years under the George W. Bush administration.

One group that generally supports the broad cost-saving goal of the center, nonetheless warned that Congress should place limits on it. Otherwise, “there is nothing preventing [the center] from testing a model … that includes all Medicare and/or Medicaid beneficiaries in the U.S,” the Healthcare Leaders for Accountable Innovation in Medicare said in a white paper. “In effect [the center] could test a model that completely restructures the Medicare or Medicaid program.”

Billions of dollars have already been spent by the center, testing a variety of ideas, from ways to improve care for at-home dialysis to ways to foster more collaboration between doctors and hospitals to efforts to reduce unnecessary hospital visits by chronically ill Medicare patients. Many of the efforts look at ways to move from Medicare’s traditional fee-for-service payment system — that economists and policymakers say drive up costs — and instead set up reimbursement that rewards coordinated care. Few of the projects have been in place long enough for the center to determine if they truly save money and improve care.

Even if the center were eliminated, many experts say these types of payment reforms will continue because of private sector interest.

“Pay-for-value is going to be a guiding principle going forward irrespective of who is in power,” said Dan Mendelson, president and CEO of the consulting firm Avalere Health. “It would surprise me to see wholesale U-turn from that policy.”

To date, most of the programs funded by the innovation center are voluntary, but controversy has arisen over several recent initiatives that require participation by doctors or hospitals.

What may happen is that there will be fewer of these mandatory efforts. This year, one such project got underway, testing a method of “bundling” payments for joint replacements at 800 hospitals in 67 metro areas. For their Medicare patients, the project requires a single bundled payment to cover the cost of these procedures, including in-patient and post-operative care, instead of separate payments for each doctor, hospital or nursing home visit. A similar mandatory project for certain kinds of cardiac care has also been proposed.

In the end, the center’s future will be determined by whether the Republican majority believes it is one of the best ways to slow rising medical costs, said Christopher Condeluci, principal at CC Law & Policy in Washington, D.C., and the former tax and benefits counsel to the Senate Finance Committee.

“If the answer is yes, they will keep it and it might go to new heights,” Condeluci said.

But economist Joe Antos, a resident scholar at the American Enterprise Institute, does not think the new administration — or many members of Congress — will push to use the center’s authority to create broad, mandatory nationwide experiments with Medicare.

“I can’t imagine a Trump administration saying we want the bureaucrats to decide on the healthcare your grandmother is going to get,” said Antos. “Anything that is that much of a marquee issue absolutely has to go through Congress.”

Some GOP governors to try to block Trump efforts to stop Medicaid expansion


GOP governors in several states will push back against any Trump administration efforts to stop or reverse the Medicaid expansion that has taken place under the Affordable Care Act.

Ten states approved expansion under Republican governors, and even GOP-dominated statehouses.  The Wall Street Journal reports that ending  Medicaid expansion would take away insurance coverage for millions of Americans,   creating a political backlash as a result.

The WSJ noted that Medicaid expansion “has also slashed uncompensated care provided by the nation’s hospitals by billions of dollars annually. The states that have yet to expand Medicaid have forfeited hundreds of billions of dollars in federal funds.”

“Right now a lot of Republican governors expanded Medicaid and they have said they will fight to keep it,” Caroline Pearson, a senior vice president at Avalere Health, told the publication. Meanwhile prominent Trump supporter and former Arizona Gov. Jan Brewer told the Associated Press that she wants the Trump administration to see Arizona’s Medicaid expansion as model of cost-effectiveness.

To read the WSJ article, please hit this link.

Warning to hospitals on CMS joint-replacement rules



A new analysis by Avalere Health discussed in MedPage Today warns that most hospitals involved in Medicare’s new hip- and knee-replacement model would suffer financial penalties if they failed to cut care costs.
“Historically, hospitals focused on what’s happening within the four walls of their institution,” said Josh Seidman of Avalere Health, but much of patients’ costs occur after a procedure is completed and the Centers for Medicare & Medicaid Services (CMS) recognizes this.

In July, 2015, CMS announced the Comprehensive Care for Joint Replacement (CJR) model, which orders 800 hospitals in 67 metropolitan areas to bundle payments for joint replacements in the lower extremities over a 90-day “episode of care.” Avalere estimates that 60 percent of hospitals would face penalties under the new model. The new rule is a “wake up call” for hospitals who had adopted a wait-and-see approach to payment reform, Seidman  said.
Unlike past demonstrations, which were voluntary, hospitals in these randomly chosen regions must adhere to the new program and its rules.

Using  the CMS Public Use File, Mr. Seidman compared hospitals’ current costs across the full spectrum of care and projected where hospitals would rank using the benchmarks set by the new rule.

MedPage reported that “Some hospitals have prepared for changes in payment by developing new or deeper relationships with post-acute care providers, by focusing on both patient and information flow across the care continuum and by creating new ways to improve care management, Seidman noted.”

How N.C. is trying to reshape Medicaid

By MICHAEL TOMSIC of WFAE via Kaiser Health News

North Carolina is overhauling its Medicaid program. The governor and state lawmakers are using a mixture of healthcare models to put the major players — doctors, hospitals and insurers — all on the hook to keep rising costs in check.

For many of the Republicans who control the state legislature, the reason for the change is simple: budget predictability.

“For years and years and years, Medicaid has been considered the budget Pac-Man that eats up all the dollars that people in this chamber would like to see spent on many, many other things,” Rep. Bert Jones said during the North Carolina House’s debate of the bill last month. Gov. Pat McCrory signed the overhaul into law on Sept. 23.

The state, which has not expanded Medicaid under the health law, struggled with huge Medicaid cost overruns from 2010 through 2013. That sent lawmakers looking for a better way to manage it, even though a signature part of the program has won national awards for quality and cost.

The lawmakers settled into two camps: One camp wanted to use a managed-care model, which basically means paying large insurance companies a specific amount per person covered and relying on the companies to contain costs.

“The alternative idea was to contract with what are called accountable care organizations,” said Wake Forest Prof. Mark Hall, “which is a newly emerging idea both at the state level and the federal level to organize systems of healthcare finance and delivery that are led by doctors and hospitals.”

The federal government is pushing that model for Medicare, the government insurance program for the elderly. The idea is to put the doctors and hospitals in charge of the health of a certain population of people. If they can provide care that keeps people healthy and saves money, doctors and hospitals can share some of that savings.

Some state lawmakers worried that the doctor-and-hospital model wouldn’t save enough money. Others worried the insurance company model would skimp on care. So they settled on a mixture of both.

Will that create “a Frankenstein’s monster?” That’s the question Hall, the Wake Forest professor, asked earlier this year.

“We proposed the thought that hybridizing these two separate ideas might be freakish, but in fact, I don’t think it is,” he said. “I think it’s actually a very sound and carefully thought-out use of the best of both models.”

Outside of North Carolina, Oregon is also contracting with both MCOs and ACOs, and a few other states are exploring how to encourage provider organizations to play a bigger role in Medicaid managed care.

In the meantime, North Carolina is drawing from the managed-care/insurance company model to change how it pays for Medicaid.

As of now, doctors bill Medicaid after they provide services, so the incentive is to provide more services. In the new system, the state will set budgets up front for whomever it puts in charge of managing care. If those managers go over budget, they’re on the hook – not the state.

That’s becoming the standard approach to payment, says Dan Mendelson, CEO of consulting firm Avalere Health.

“Most states contract for Medicaid through managed care because states don’t want open-ended financial liability,” Mendelson said.

Normally, those states contract with insurance companies. But here’s where the doctor-and-hospital model comes in. North Carolina will open up its bids to insurance companies and doctor-and-hospital systems. It will also set up quality metrics to track how they do.

Game on, says Julie Henry of the North Carolina Hospital Association.

“We’re moving in this direction in other arenas in healthcare, not just for the Medicaid population, but for commercially insured patients and for Medicare patients,” she said.

Henry points out some doctor-and-hospital systems in North Carolina are already meeting quality metric standards and saving money under Medicare. Some insurance companies are posting similar results.

Patient advocates say one system isn’t necessarily better than the other.

“We think it’s important to focus on not just who we hand a big bucket of money to, but what are the rules for spending that money,” said Corye Dunn, of Disability Rights North Carolina.

She says making sure the quality metrics are effective will be a crucial part of the overhaul process.

Also, lawmakers set a cap of 12 percent for how much money can go toward administrative costs and profits.

“The challenge lies in the fact that Medicaid is already a very lean program, and there’s just not a lot of fat to cut out there,” said Joan Alker of the Georgetown University Center for Children and Families. “The concern is, will the managed care company save money the right way or the wrong way?”

Some worry the risks of the overhaul outweigh the benefits. Cost overruns have not been a problem the past two years. And many in North Carolina’s medical community take pride in effective parts of the old program.

A Republican legislative leader on healthcare policy, Rep. Nelson Dollar, voted against the overhaul. And Democratic Rep. Gale Adcock, a nurse practitioner from Wake County, told other lawmakers to consider a guiding principle in healthcare.

“First, do no harm,” she said on the House floor. “I’m very fearful that if we pass this bill, we will do harm.”

The version that passed will change the award-winning part of the program, called Community Care of North Carolina. Community Care is a network of doctors, nurses and pharmacists who coordinate care for roughly 80 percent of Medicaid patients. A recent state audit found that Community Care has been saving the state money and improving patient outcomes.

As insurers and hospital systems take over those functions, Community Care President Dr. Allen Dobson says his organization will look to partner with them.

“We expect we’ll play a fairly significant role,” Dobson said. “It will be different. We may move from having one customer, which has been the state, to having multiple customers.”

One of the Republicans who led the overhaul effort, Rep. Donny Lambeth, says Medicaid is not broken in North Carolina. But he says as health care evolves, the state needs to keep up.

“Fact is, we can actually do better in North Carolina for these Medicaid beneficiaries,” Lambeth said on the House floor. “Do you think quality in North Carolina across all the providers is equal and good? I can tell you it is not.”

Lambeth says the new quality metrics will make it easier to track that. He says it’ll take three to four years to get federal approval and implement the changes.

This story is part of a reporting partnership that includes WFAE, NPR and Kaiser Health News

How to get 5 stars as a home-health agency

CHARLOTTE — Home health agencies are a segment of the medical industry that you may not know about if you or a loved one has never needed one. The companies send therapists and nurses into the homes of Medicare patients to help them recover from an illness or surgery.

This summer the federal government started rating home health agencies – doling out one to five stars – to give consumers a better picture of the job  they do. The top grades were elusive: only 239 agencies out of 9,000 nationwide earned five stars, according to a Kaiser Health News analysis.

In North Carolina, Brookdale Home Health Charlotte was one of just two agencies out of more than 170 in the state to earn five stars. How did they manage it?

Physical therapist Kurt Harcar’s session with Annie Wilson is a window into Brookdale’s success.

Harcar helped Wilson to her feet and handed her a soccer ball. “You’re going to hold onto the ball, both hands,” he said. “Now we want to go side to side.”

“I was a great square dancer back in my young days,” Wilson, 105, said with a laugh.

It’s far from square dancing, but the exercise is designed to improve her balance and help her manage the walker that allows her to still get around on her own.

“The big key that we try and focus on here is making sure they’re safe and as independent as they can be,” Harcar said. The side-to-side soccer ball move can help Wilson maintain her balance as she navigates the kitchen or bathroom in her apartment.

How often patients get better at moving around is one way Brookdale sets itself apart. It’s also far above national averages on quickly initiating care and easing pain, according to Medicare data.

“These metrics as a whole show home health’s ability to improve somebody’s function and home health’s ability to prevent costly episodes that are negative for the patient, like a hospitalization or like a delay in service,” said Harrison Brown of The Advisory Board Company, a consulting firm.

That’s part of the reason Medicare is putting a brighter spotlight on home health – by keeping people out of the hospital, it can save the federal government money.

Brown said the new star ratings are good for consumers and for the most effective agencies.

“This is really an opportunity for home health agencies to differentiate themselves, given that home health actually has a lot of variability in it in terms of quality and cost,” Brown said.

The ratings have limitations. Bill Dombi of the National Association for Home Care and Hospice says that for one, they emphasize improvement.

“The population in home health tends to be fairly aged with multiple chronic illnesses, where stabilization may be the goal rather than improvement,” he said.

Dombi said it’s unrealistic for a patient with Parkinson’s disease, for example, to get much better. But home health can help that person maintain some independence.

Another limitation is that the underlying data for the star ratings are self-reported, which creates potential for some agencies to pad their stats.

“You don’t know what you’re getting, and there is little quality oversight of the data,” said Dan Mendelson, CEO of consulting firm Avalere Health.

He said the data need to improve before Medicare starts tying payments to the quality metrics, as it’s already doing with hospitals.

“Some home health agencies are taking this very seriously and are getting really good real-time data and going in and collecting the data on patients that they see, and others aren’t,” he says. “That’s the situation right now.”

Brookdale Home Health Charlotte is getting real-time data. Nurses like Ginny Grenda use tablets to update patient information as they go.

“I don’t hear near as much congestion as I did when we were listening last week,” she told patient Larry Goelz as she listened to his lungs recently.

Goelz is coming off a hospitalization for pneumonia and congestive heart failure. To help his lungs recover, she’s given him a device he can use to practice blowing.

It’s easy for Grenda to keep tabs on Goelz – she’s part of  a Brookdale team  set up inside this retirement community. “We are in the building, which helps,” she says. “We see them intermittently. But if there is a complication, the staff can get us, and we can get orders to see the patient as needed.”

Brookdale Home Health has teams set up in 22 retirement communities in the Charlotte area. That may give it an advantage in the star ratings over agencies that are constantly driving from home to home.

That said, the only other five-star agency in North Carolina, Well Care Home Health in Wilmington, mostly does serve private homes.

Brookdale’s director, Cheryl Engram, says the more important factors are how experienced her staff is and how well they know their patients. One nurse said she is as familiar with her patients as she is with her family.

“That speaks to me volumes about what we do and the services that we provide,” Engram says. “Not just the fact that we’ve got a team of people here, but that the people who make up that team are following through on the things that they need to do.”

Engram says Brookdale is now looking to expand, and it’ll use its five-star rating as a selling point.


ACA exchanges’ narrow networks


A study by the  consulting firm Avalere Health says that consumers who bought insurance on the Affordable Care Act health exchanges last year had access to a third fewer physicians and hospitals, on average, than people with traditional employer-provided coverage.

The Washington Post said that the “provides a statistical basis for anecdotal reports from consumers and others about the more limited doctor and hospital choices in plans offered on marketplaces created by the Affordable Care Act.”

The paper notes that in these “narrow networks,” health plans “negotiate contracts with a select number of providers who agree to be reimbursed at lower rates. That means the insurers can set their premiums lower, at least theoretically. But, depending on the plan’s design, consumers typically pay more, and sometimes much more, if they use a doctor or hospital outside the network.”

The plans under the exchange  had networks with 42 percent fewer cancer and cardiac specialists; 32 percent fewer mental-health and primary-care doctors, and 24 percent fewer hospitals.

But other studies have said that patients prefer narrower networks of providers if it means lower premiums.

No rush to pricey specialists under the ACA


Some observers have feared that many who signed up for insurance under the Affordable Care Act would be  sicker than those with employer-based health programs and would be especially likely to seek out expensive specialists.

But a Reuters study suggested that these new entrants, while enthusiastic about getting preventive care, were no more likely than others to see the aforementioned pricey specialists. If anything, the study reminds us at Cambridge Management Group that the newly insured  is boosting demand not only for primary-care physicians but also for nurse practitioners and physician’s assistants.

Reuters said that  the profile of people covered by the Affordable Care Act exchanges came from  ZocDoc, a free online appointment-booking tool used by millions of people in all 50 U.S. states.

”The data, covering thousands of users aged 18 to 64, suggests that ‘the vast majority who signed up in the first wave of Obamacare didn’t have acute medical needs, contrary to expectations,” Dr. Oliver Kharraz, ZocDoc’s co-founder and chief operating officer, told Reuters. ‘The biggest news here is the absence of dramatic utilization differences.”‘


Still, a caveat: ”The question is whether, over time, preventive care visits lead to more use of specialists,” Elizabeth Carpenter, director of the healthcare-reform practice at Avalere Health, told Reuters. “Obviously, the more individuals seek preventive care and screenings the more likely they are to be referred to a specialist.”






Penalties wipe out much of Medicare quality rewards

Bradley Tsalyuk & Corey Dunlap, Don't Wish it Were Easier
Custom printed banner, Mylar balloons in installation by Bradley Tsalyuk and Corey  Dunlap, at New Art Center, Newtonville, Mass.
By JORDAN RAU, for Kaiser Health News
Kaiser Health News is a nonprofit national health-policy news service. 

Medicare is giving bonuses to a majority of hospitals that it graded on quality, but many of those rewards will be wiped out by penalties the government has issued for other shortcomings, federal data show.

As required by the 2010 health law, the government is taking performance into account when paying hospitals, one of the biggest changes in Medicare’s 50-year-history. This year 1,700 hospitals – 55 percent of those graded – earned higher payments for providing comparatively good care in the federal government’s most comprehensive review of quality. The government measured criteria such as patient satisfaction, lower death rates and how much patients cost Medicare. This incentive program, known as value-based purchasing, led to penalties for 1,360 hospitals.

When all these incentive programs are combined, the average bonus for large hospitals — those with more than 400 beds — will be nearly $213,000, while the average penalty will be about $1.2 million, according to estimates by Eric Fontana, an analyst at The Advisory Board Co. a consulting company based in Washington. For hospitals with 200 or fewer beds, the average bonus will be about $32,000 and the average penalty will be about $131,000, Fontana estimated. Twenty-eight percent of hospitals will break even or get extra money.

On top of that, Medicare this year also began docking about 200 hospitals for not making enough progress in switching over to electronic medical records. Together, more than 6 percent of Medicare payments are contingent on performance.

“You’re starting to talk about real money,” said Josh Seidman, a hospital adviser at Avalere Health, another consulting firm in Washington. “That becomes a really big driver; it really gets the attention of the chief financial officer as well as everybody else in the executive suite of the hospital.”

Among these programs, the Hospital Value-Based Purchasing initiative, now in its third year, is the only one that offers bonuses as well as penalties. It is also the only one that recognizes hospital improvement even if a hospital’s quality metrics are still subpar. The value-based purchasing bonuses and penalties were based on 26 different measures, including how consistently hospitals followed a dozen recommended medical guidelines, such as giving patients antibiotics within an hour of surgery, and how patients rated their experiences while in the hospital. Medicare also examined death rates for congestive heart failure, heart attack and pneumonia patients, as well as bloodstream infections from catheters and serious complications from surgery such as blood clots.

Adding An Efficiency Measure

Medicare this year added a measure intended to encourage hospitals to deliver care in the most efficient manner possible. Federal officials calculated what it cost to care for each hospital’s average patient, not only during the patient’s stay but also in the three days before and a month after. Often the biggest differences in medical costs between hospitals are due to what happens to patients after they leave. For instance, Medicare pays more to inpatient rehabilitation facilities than it does to skilled nursing homes, even though both treat similar kinds of patients.

“It’s your one opportunity either to make money on pay-for-performance or at least recoup some of the potential losses you have from the other programs,” said Paul Matsui, who directs data research at The Advisory Board Company.

This year, Medicare judged hospitals based on how they performed in comparison to others in the second half of 2012 and all of 2013, and how much they had improved from two years before. Medicare adds a hospital’s bonus or penalty to every Medicare reimbursement for a patient stay from last October through the end of September.

Nearly 500 more hospitals earned bonuses in the value-based purchasing program compared to last year. The biggest is going to Black River Community Medical Center in Poplar Bluff, Mo., which is getting a 2.09 percent increase, the analysis found. The largest penalty this year is assigned to the Massachusetts Eye and Ear Infirmary, a teaching hospital of Harvard Medical School, in Boston. It is losing 1.24 percent of its Medicare payments.

The Massachusetts infirmary said in a statement that it was losing only about $60,000 because most of its patients do not remain overnight in the hospital, and the penalties only apply to inpatient stays. The infirmary had so few of those cases that Medicare could not assess its performance on more than half the measures the government uses. Medicare’s program “is a poor match for what” the infirmary does, it said.

Nationally, the average bonus for hospitals under value-based purchasing was a 0.44 percent increase, while the average penalty — not including the other penalty programs — was a 0.30 percent reduction, the KHN analysis found. The actual dollar amount will depend on the mix of Medicare patients that hospitals treat through September and how much they bill Medicare. Medicare set aside 1.5 percent of its payments for the incentives, totaling about $1.4 billion.

States Most Impacted

Medicare awarded bonuses to at least three-fourths of the hospitals it evaluated in Alaska, Hawaii, Maine, Minnesota, Montana, Oregon, South Dakota and Wisconsin, the KHN analysis found. Medicare penalized more than half the hospitals it evaluated in Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Florida, Nevada, New Jersey, New York, North Dakota, Pennsylvania, Washington and Wyoming.

More than 1,600 hospitals were exempted from the incentives, either because they specialize in narrow types of patients, such as children or veterans, or because they are paid differently by Medicare, such as all hospitals in Maryland and “critical access hospitals” that are mostly in rural areas.

Hospitals awarded bonuses in one year of the value-based purchasing program do not necessarily do as well the next year. Out of 2,672 hospitals that have been evaluated in all three years of the program, roughly a quarter got bonuses all three years and a quarter lost money in all three years. The rest had a mix of bonuses and penalties, the KHN analysis found.

Matsui said swings were not surprising given that hospitals are getting acclimated to the programs and Medicare has added new measurements each year. “In the grand scheme of things,” he said, “we’re still in the embryonic stage of the pay for performance programs.”

Jay Hancock: Meager results in anti-readmissions program

By JAY HANCOCK ( | @JayHancock1)

Kaiser Health News

Obama administration officials have warned that ambitious experiments run by the health law’s $10 billion innovation lab wouldn’t always be successful. Now there is evidence their caution was well placed.

Only a small minority of community groups getting federal reimbursement to reduce expensive hospital readmissions produced significant results compared with those from sites that weren’t part of the $300 million program, according to partial, early results. The closely watched program is one of many tests to control costs and improve care being run by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act.

Dozens of community agencies on aging, from Ventura County, Calif., to southern Maine were offered money to try to ensure that seniors leaving the hospital received care that reduced their chances of being readmitted within a month.

But an early evaluation found that only four groups out of 48 that were studied in the Community-based Care Transition Program significantly cut readmissions compared with those of a control group.

At the same time, 29 groups have either withdrawn from the program or been terminated by the Department of Health and Human Services for failing to achieve targets, agency officials said. The CCTP project, which has grown since the evaluation was done, now has 72 participating sites  that administration officials hope will still produce readmission reductions and lessons in post-hospital care in return for the investment.

The evaluation, produced under contract with HHS by consulting firm Econometrica, is one of the first independent analyses of an innovation-lab test to be made public. It is dated May 30, 2014, but was posted on HHS’s Web site Jan. 2.

The 111-page report notwithstanding, experts said it’s too soon to pronounce substantial judgment on CCTP.

“It’s really too early to tell,” said Ellen Lukens, who leads the practice on hospital and post-hospital care at Avalere Health, a consulting firm. “Can you really evaluate this when it’s been such a short period of time?”

A five-year experiment, the program signed its first round of deals with community agencies in late 2011 and its fifth and last round in March 2013. Econometrica’s report covered partial-2012 results from groups participating in the early rounds, including some for which only a few months of data were available. Congress required the lab to closely monitor all tests, which explains the early evaluation, experts said.

One positive note was that “a lot of the sites were able to implement the program very quickly,” Lukens said, adding that later data will give a better idea of CCTP’s effectiveness.

The readmissions result — less than one site in 10 significantly reducing them — “seems kind of wimpy,” said Eric Coleman, a professor at the University of Colorado whose previous work on care for discharged patients influenced the CCTP program. He said he remains optimistic about the tests, however, also noting that the results are early and praising HHS for cutting off nonperforming groups.

“This is really the first glance of the first two waves of the program,” said HHS spokesman Raymond Thorn. “It’s too early to determine whether this model is failing or not. We will have successes.”

CCTP is one of dozens of experiments being run by HHS’s innovation lab, which has a 10-year, $10 billion budget. Preventable readmissions are calculated to cost the Medicare program for seniors $17 billion a year.

Paying community agencies to work with hospitals was thought to be one potential way of reducing them. Rather than getting grants, agencies are paid according to the discharge cases they handle.

The program faces several challenges, experts said. In awarding funding, HHS favored groups working with hospitals with high readmission rates, perhaps making success more difficult.

Plus, numerous groups and hospitals are working to cut readmissions through other means. That increases competition for aging agencies trying to make their mark and raises the difficulty of measuring their results separately from those of other programs.

Readmissions have been dropping nationally since Medicare began penalizing hospitals in late 2012 if they have too many. Some CCTP groups reduced readmissions — but so did comparison hospitals. That means the system improved overall in those areas and money was saved, but statistically the aging agencies did not show up as the critical factor.

Coleman faulted HHS for requiring agencies to file detailed reports on care models and administration rather than letting them focus on the main job.

“If it doesn’t reduce readmissions it’s game over, so why do you want all these process measures?” he said. “If we want these sites to succeed we need to get out of their way.”

Originally more than 100 agencies agreed to participate. But 29, including New York Methodist Hospital and Pennsylvania’s Delaware County Office of Services for the Aging, have withdrawn or didn’t have contracts renewed because they missed readmission-reduction or enrollment targets, HHS said.

The health-law innovation program also includes Accountable Care Organizations to cut costs and improve care quality; tests giving more resources to primary-care doctors to coordinate care; and innovation awards for promising models to improve Medicare efficiency.

Administration officials like to compare the lab to a venture-capital fund, in which many investments are expected to fail but a few succeed spectacularly. Many Republicans think it’s a waste.


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