Dobson | DaVanzo analyzed preliminary 2020 Medicare Home Health claims and found that agencies may be underpaid on a case basis in 2020 due to the dual pressures of payment system reform and the ongoing COVID-19 public health emergency (PHE). Home health agencies concurrently experienced a decline in home health episode and visit volume, primarily due to the COVID-19 pandemic, but also due to issues stemming from the transition to the new home health reimbursement system—Patient Driven Groupings Model (PDGM). Under PDGM, a provider gets penalized if they deliver fewer visits to a patient than the threshold set by CMS. Prior to the pandemic-related state actions (in January and February), there were many more cases penalized for having too few visits within an episode than CMS targeted in its rulemaking; this is likely the result of PDGM but was subsequently exacerbated by the PHE.
This work, sponsored by the Partnership for Quality Home Healthcare, was submitted during the CY2021 HH PPS proposed rule public comment period and will be made available in the federal register. In it, we examine the extent to which home health agencies have conformed to behavioral assumptions, the basis of prospective CMS rate reductions in 2020. Ultimately, we found evidence that the system has a base payment rate which leads to payments that are 6% lower in implementation than expected in prior rulemaking. CMS reduced rates for 2020 by 4.36% on the basis of assumed provider behavioral responses to the new payment system.
Regardless of the cause (CMS rate reductions, implementation of the new payment system, PHE, hurricanes, and so on), average home health case payments are below the budget neutral level specified as the target spending level in the Bipartisan Budget Act of 2018. PDGM implementation and the COVID-19 PHE are entangled, making it difficult to firmly attribute the observed payment rate to one or another factor. Realistically, all healthcare providers have been affected by the PHE to some extent and it is unclear how long it will take or the extent to which it will to return to pre-pandemic activity levels.
In July, CMS exercised Option Period 2 to extend Dobson | DaVanzo’s contract to assist with Part D Formulary and Benefits Assessment. Under this contract, Dobson | DaVanzo and its sub-contractor, Acumen, LLC, will continue to monitor the prescription drug benefits program as offered through the Medicare Prescription Drug, Improvement, and Modernization act of 2003 (MMA). We will continue to analyze and summarize contract/plan benefit and formulary offerings, enrollment data and prescription drug event (claims) data, as well as the relationship between drug utilization and health status or other characteristics of the beneficiary or plan. These results may influence future Part D formulary and/or benefits requirements.
Dobson | DaVanzo provided expert consulting and testimony concerning hospital taxes and Medicaid rates for the Connecticut Hospital Association (CHA) over a period of several years. The CHA just received a “final” settlement. The settlement was complex involving approval by the State legislature, CMS approval of numerous plan amendments, and approval by the Connecticut (CT) Superior Court. Hospitals in CT will receive a one-time payment and various rate increases. It was an “amazing” journey with an outcome acceptable to both hospitals and the State. This settlement is an example of how complex payment issues can be resolved in a way that ultimately assures continued quality care for CT residents.
In June, CMS exercised Option Period 2 to extend Dobson | DaVanzo’s contract to assist with Monitoring and Data Validation of Parts C & D Reporting Requirement. Under this contract, Dobson | DaVanzo and its sub-contractor Acumen, LLC, will continue to monitor data submissions by Medicare Advantage Organizations (MAOs) and Part D Sponsors, prepare and analyze submitted data, create Public Use Files (PUF) and updates, and/or create Data Validation (DV) Standards. Dobson | DaVanzo will analyze the reporting requirements data reported by Sponsors to calculate overall Part C and Part D program summary statistics and produce performance measures for public reporting. The outcomes from this project will ensure that Medicare beneficiaries have access to information about their health and drug plans, and to ensure that beneficiaries are provided with care that is of high quality and is safe, effective, and timely.
Dobson | DaVanzo welcomed Sarah Rappazzo, a health policy enthusiast, for a virtual summer internship with the firm. Sarah is an undergraduate student at Cornell University with a major in Biology and Society and minor in Health Policy and Nutrition, Health and Society. Among other activities, she will be supporting the firm in its contract with CMS to monitor the Medicare Disproportionate Share Hospital-related comments during the Inpatient Prospective Payment System (IPPS) rulemaking.
In a competitive bid, Dobson | DaVanzo was awarded a $2 million task order with the Center for Medicare and Medicaid Services (CMS) for Medicare Part D Drug Discount Program Data Support. For this project, Dobson | DaVanzo will be supporting CMS through data analyses and monitoring in ensuring that plans offer appropriate drug coverage and benefits for Part D beneficiaries and that beneficiaries are utilizing drugs in a safe and appropriate manner.
Dobson | DaVanzo is pleased to welcome Ada Cheng to our team of Data Associates. Ada brings more than ten years of experience performing business and statistical analyses in the healthcare sector. She holds a Master in Applied Science and Information Technology from Johns Hopkins University and her repertoire of data sets includes working with the Defense Medical Surveillance System, and data sets including Medicare, Medicaid, and Managed Care systems.
Dobson DaVanzo under commission and in collaboration with Adventist HealthCare (Montgomery County, MD) developed a conceptual model of healthcare financial relationships to relieve a myriad of concerns about today’s healthcare billing system, including surprise balance billing. This conceptual piece called “Consumer Protection Realignment: Shifting Consumer Billing from Providers to Health Plans” was published in the Health Affairs Blog dated May 1, 2020.
The Consumer Protection Realignment (CPR) model is a novel approach that refocuses attention on the financial interaction of patients, providers and health plans. Today’s healthcare billing system frustrates consumers and it is nearly impossible for consumers to anticipate and understand out-of-pocket medical costs, even when receiving simple procedures. Healthcare providers struggle to recoup and manage the complexity of a health insurance market that is facing market pressures that have led to higher out-of-pockets costs in order to control healthcare expenses and premiums. This dynamic has produced a system that is unfavorable to consumers, as they bear the brunt of unaffordable costs, an increased presence of surprise balance billing, a lack of price transparency and a multitude of often complex and unexpected bills.
To solve this issue, the CPR model realigns the billing and collection of deductibles, coinsurance and copayments from health care providers to health insurance plans via proposed federal legislation requiring all providers, whether in- or out-of- network, to bill patient out-of-pocket costs through the insurer. While CPR is an overarching reform approach, the system uses operational mechanisms currently in place. Health plans would still negotiate rates with providers, but would take on the added responsibility and risk of billing patients. In turn, providers would be required to return the resulting savings to plans in the form of reduced charges for services. In so doing, CPR creates a system where consumers enjoy increased price transparency, protection from surprise balance billing, consolidated and simpler billing, and, in the long-term, more progressive and integrated healthcare delivery mechanisms. To read more about CPR visit the Health Affairs blog.
In their March 2020 Report to the Congress: Medicare Payment Policy, MedPAC addressed the question of whether 340B drug discounts create incentives for hospitals to choose more expensive products. As part of their analysis, MedPAC cited Dobson | DaVanzo’s 2017 report entitled Financial Challenges Faced by 340B Disproportionate Share Hospitals In Treating Low-Income Patients, written by Al Dobson, Kennan Murray and Joan DaVanzo. MedPAC wrote that “Dobson and colleagues found that 340B DSH hospitals incur higher drug spending compared to non-340B hospitals due to the type of patients they treat and the characteristics of the facilities they operate. Accounting for differing patient and facility characteristics using propensity score matching (that matched 340B hospitals to non-340B hospitals based on patients’ and hospitals’ characteristics), Part B spending per beneficiary in 2013 was 15 percent greater at 340B DSH hospitals than at non-340B hospitals ($3,204 versus $2,794). However, because 58 percent of the 340B DSH hospitals that could not be matched to non-340B hospitals were therefore excluded from the analysis, a limitation of this study is that it may not be generalized to all 340B DSH hospitals.”
The National Association for Home Care and Hospice (NAHC) has commissioned Dobson | DaVanzo to conduct analyses assessing the impact of potential regulatory payment and policy changes that may be under consideration by the Medicare Payment Advisory Commission (MedPAC) and Centers for Medicare and Medicaid Services (CMS). Payment policy changes could adversely affect the fairness and accuracy of Medicare Fee for Service payments for hospice services if not carefully conceptualized and implemented; current considerations seem to have little to do with differences in patient mix, but rather have more to do with provider characteristics. In this preliminary study, Dobson | DaVanzo will be preparing descriptive statistics and preliminary analyses to eventually develop and understand what a hospice-specific case-mix system that predicts Medicare hospice expenditures might look like
As the coronavirus situation evolves, the Dobson | DaVanzo team remains fully operational as we continue to work remotely, ensuring a safe environment for all our employees, colleagues, and clients. Our proactive business continuity plan that was put into place early on, has enabled us to continue operations without business disruption, and to allow our clients the prompt and continued access to our services, as they so deserve. As the world changes from day to day, we are closely monitoring the situation, following the CDC rules and recommendations, and paying close attention to what the rest of our country, as well as the entire world, are doing in these difficult and uncertain times. Although the virus has driven certain segments of the economy to a stand-still, Dobson | DaVanzo has continued our momentum coming out from our best year to date into the first quarter of 2020. We remain dedicated to taking care of both our employees and clients and are here to serve the needs of health care organizations as they navigate this time of crisis. As we continue to grow, we are pleased to inform you that we intend to increase our workforce by as much as 10% in the upcoming months. Our robust backlog and strong portfolio of liquid assets allows Dobson | DaVanzo to continue to invest in our organization and in our client products. We are uniquely positioned to further help our customers with more complex and challenging assignments so we, collectively, can make it through these very real and difficult times.
Medicaid work requirements can result in loss of health coverage for communities, especially in rural areas. Furthermore, the requirements can harm hospitals as they lose Medicaid revenue, see an increase in their uncompensated care costs, and a reduction in hospital operating margin. Dobson | DaVanzo examined the impact of imposing work requirements on Medicaid enrollees through Section 1115 waivers in 16 states that have implemented the waiver or are scheduled to do so after approval. To find out how your state might fare under the policy, download the fact sheets from The Commonwealth Fund.
Dobson | DaVanzo is pleased to welcome Stephanie Demian to our team of Research Analysts. Stephanie brings valuable health policy and management experience from prior roles as the Assistant Director of Quality and Regulatory Affairs at the American Academy of Child and Adolescent Psychiatry and also served as the Implementation Manager for a quality improvement project under contract with the Centers for Medicare and Medicaid Services.
Dobson| DaVanzo has long-standing experience in conducting feasibility studies. These studies assess whether Medicare claims can be used to demonstrate the value proposition of medical technologies, procedures and policy changes. Our knowledge of publicly available and proprietary claims and financial datasets combined with our thorough understanding of clinical treatment pathways enables us to paint a picture of a medical product’s utilization and payment over time as the technology diffuses. We help ascertain the way forward for new technologies by determining whether there is an adequate sample size in the data, both to create the treatment group as well as the best matched comparison group. We also determine the best outcome variables to be used to demonstrate value in healthcare and economic outcomes. These analyses help clients to truly understand the use of their technology in specific situations. A feasibility study demonstrating a sufficient sample size is generally followed by a health economics and outcomes study that provides vital information on demographics and comparative cost outcomes. These studies can also take the form of market analyses, enabling our clients to make a plausible case for new technologies and their pay
As the world confronts an emerging global pandemic of coronavirus outbreak, Dobson | DaVanzo is developing a business continuity plan that ensures our ongoing support for our clients. With an internal team of staff trained in public health, our onsite infectious disease prevention plan is designed to keep our staff healthy and productive.
Our business continuity plan is also designed to permit Dobson | DaVanzo to continue operations and avoid significant business disruption. This business continuity plan addresses: data back‐up and recovery, all critical IT systems, financial and operational assessments; communications with our clients and employees; alternate physical location of employees. All of this is directed at assuring our clients prompt and continued access to our services.