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HHS OIG — Federal Marketplace: Inadequacies in Contract Planning and Procurement

January 21, 2015 Comments off

Federal Marketplace: Inadequacies in Contract Planning and Procurement
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
The Federal Marketplace at HealthCare.gov was designed to enable millions of Americans to select health insurance in a “one-stop shop” environment. A project of this magnitude and complexity required the development, integration, and operation of multiple information technology (IT) systems and Government databases. CMS acquisition planning and procurement activities were among the first steps critical to ensuring the success of this project. CMS awarded 60 contracts across 33 companies to perform this work. The troubled launch of the Federal Marketplace at HealthCare.gov in October 2013 raised a number of concerns, including questions about the adequacy of CMS’s planning and procurement efforts for this key project under the Affordable Care Act.

HOW WE DID THIS STUDY
We conducted a detailed review of documentation provided by CMS for the 60 Federal Marketplace contracts, selected 6 key contracts for indepth review, and interviewed Department of Health and Human Services (HHS) and CMS officials involved with contracting for the Federal Marketplace. We also reviewed procurement regulations, manuals, guides, and procedures provided by both HHS and CMS for acquisition planning, contractor selection, and contracting oversight processes.

WHAT WE FOUND
When awarding the Federal Marketplace contracts, CMS did not always meet contracting requirements. For example, CMS did not develop an overarching acquisition strategy for the Federal Marketplace or perform all required oversight activities. Moreover, for a project of this size and importance, CMS missed opportunities to leverage all available acquisition planning tools and contracting approaches to identify and mitigate risks. Specifically, CMS did not exercise the option to plan for a lead systems integrator to coordinate all contractors’ efforts prior to the launch of the Federal Marketplace. The complexity of the Federal Marketplace underscored the need for CMS to select the most qualified contractors. However, CMS did not perform thorough reviews of contractor past performance when awarding two key contracts. CMS also made contracting decisions that may have limited the number of acceptable proposals for much of the key Federal Marketplace work. In addition, CMS selected contract types that placed the risk of cost increases for this work solely on the Government.

WHAT WE RECOMMEND
We recommend that (1) CMS ensure that acquisition strategies are completed as required by regulation, (2) CMS assess whether to assign a lead systems integrator for complex IT projects, (3) CMS ensure that contract actions are properly documented, (4) CMS ensure that all contracts subject to oversight review requirements undergo those reviews, (5) HHS limit or eliminate regulatory exceptions to acquisition planning requirements, and (6) HHS revise its acquisition guidance to include specific standards for conducting past performance reviews. HHS and CMS concur with all of our recommendations.

Medicare Per Capita Spending By Age And Service: New Data Highlights Oldest Beneficiaries

January 20, 2015 Comments off

Medicare Per Capita Spending By Age And Service: New Data Highlights Oldest Beneficiaries
Source: Health Affairs

Medicare per capita spending for beneficiaries with traditional Medicare over age 65 peaks among beneficiaries in their mid-90s and then declines, and it varies by type of service with advancing age. Between 2000 and 2011 the peak age for Medicare per capita spending increased from 92 to 96. In contrast, among decedents, Medicare per capita spending declines with age.

As the US population ages and more people on Medicare live into their 80s, 90s, and beyond, analysts and policy makers are examining the impact of these trends on the federal budget and the Medicare program. At the same time, geriatricians and other providers who care for older patients are paying greater attention to the question of how best to meet the needs of an aging population. By 2050 the number of people on Medicare ages 80 and older will nearly triple; the number of people in their 90s and 100s will quadruple.

To inform discussions about Medicare’s role in providing coverage for an aging population and to assess the relationship between Medicare spending and advancing age, this article presents findings from an analysis of Medicare per capita spending among beneficiaries over age 65 in traditional Medicare, by age and type of service.

Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?

January 19, 2015 Comments off

Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?
Source: National Bureau of Economic Research

We examine the long-term impact of expansions to Medicaid and the State Children’s Health Insurance Program that occurred in the 1980’s and 1990’s. With administrative data from the IRS, we calculate longitudinal health insurance eligibility from birth to age 18 for children in cohorts affected by these expansions, and we observe their longitudinal outcomes as adults. Using a simulated instrument that relies on variation in eligibility by cohort and state, we find that children whose eligibility increased paid more in cumulative taxes by age 28. These children collected less in EITC payments, and the women had higher cumulative wages by age 28. Incorporating additional data from the Medicaid Statistical Information System (MSIS), we find that the government spent $872 in 2011 dollars for each additional year of Medicaid eligibility induced by the expansions. Putting this together with the estimated increase in tax payments discounted at a 3% rate, assuming that tax impacts are persistent in percentage terms, the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return on investment does not take into account other benefits that accrue directly to the children, including estimated decreases in mortality and increases in college attendance. Moreover, using the MSIS data, we find that each additional year of Medicaid eligibility from birth to age 18 results in approximately 0.58 additional years of Medicaid receipt. Therefore, if we scale our results by the ratio of beneficiaries to eligibles, then all of our results are almost twice as large.

Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities

January 16, 2015 Comments off

Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
Medicare hospice care is intended to help terminally ill beneficiaries continue life with minimal disruption and to support beneficiaries’ families and other caregivers in the process. Care may be provided in various settings, including a private home or other places of residence, such as an assisted living facility (ALF). Pursuant to the Patient Protection and Affordable Care Act, CMS must reform the hospice payment system, collect data relevant to revising hospice payments, and develop quality measures for hospices. This report provides information to inform those decisions and is part of OIG’s larger body of work on hospice care. While the report focuses on ALFs, many of the issues identified pertain to the hospice benefit more broadly.

HOW WE DID THIS STUDY
We based this study on an analysis of all Medicare hospice claims from 2007 through 2012. We used Certification and Survey Provider Enhanced Reports data and Healthcare Cost Report Information System reports for supplementary information on hospice characteristics.

WHAT WE FOUND
Medicare payments for hospice care in ALFs more than doubled in 5 years, totaling $2.1 billion in 2012. Hospices provided care much longer and received much higher Medicare payments for beneficiaries in ALFs than for beneficiaries in other settings. Hospice beneficiaries in ALFs often had diagnoses that usually require less complex care. Hospices typically provided fewer than 5 hours of visits and were paid about $1,100 per week for each beneficiary receiving routine home care in ALFs. Also, for-profit hospices received much higher Medicare payments per beneficiary than nonprofit hospices. This report raises concerns about the financial incentives created by the current payment system and the potential for hospices to target beneficiaries in ALFs because they may offer the hospices the greatest financial gain. Together, the findings in this and previous OIG reports show that payment reform and more accountability are needed to reduce incentives for hospices to focus solely on certain types of diagnoses or settings.

WHAT WE RECOMMEND
We recommend that CMS, as part of its ongoing hospice reform efforts: (1) reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays, (2) target certain hospices for review, (3) develop and adopt claims-based measures of quality, (4) make hospice data publicly available for beneficiaries, and (5) provide additional information to hospices to educate them about how they compare to their peers. CMS concurred with all five recommendations.

Variations in County Level Costs Between Traditional Medicare and Medicare Advantage Have Implications for Premium Support

January 12, 2015 Comments off

Variations in County Level Costs Between Traditional Medicare and Medicare Advantage Have Implications for Premium Support
Source: Commonwealth Fund

In comparing spending for beneficiaries enrolled in traditional Medicare with spending for those in private Medicare Advantage plans, researchers found that costs for Medicare Advantage are higher in about half of U.S. counties—corresponding to areas of the country where traditional Medicare costs are low. The relative costliness of Medicare Advantage varies by geographic area and by the type of plan. Policymakers should consider these findings when assessing the potential impact of proposals to redesign Medicare as a “premium support” program.

Coverage of Preventive Services for Adults in Medicaid

January 4, 2015 Comments off

Coverage of Preventive Services for Adults in Medicaid
Source: Kaiser Family Foundation

The Affordable Care Act (ACA) added emphasis to the importance of preventive services in improving lives. As of January 1, 2013, per Section 4106 of the ACA, states can receive a one percentage point increase in their federal Medicaid match rate for preventive services if they cover without cost sharing all the adult preventive services (see Table A1) recommended by the federally-convened U.S. Preventive Services Task Force (USPSTF) and Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP). As of the time of the survey, four states had submitted state plan amendments (SPAs) to receive the 1% increase and since then, 4 additional states (8 total) have submitted SPAs for the enhanced match. States must cover preventive services for adults newly eligible for Medicaid under the ACA, but this is not required for the group of adults enrolled in or eligible for traditional Medicaid prior to the ACA’s expansion of the program.This brief highlights data from a survey of state Medicaid programs conducted by the Kaiser Commission on Medicaid and the Uninsured (KCMU) on coverage of preventive services recommended for non-elderly adults before the ACA was enacted.1,2 The survey asked states about coverage and cost sharing in their fee-for-service Medicaid programs as of January 1, 2013 for 40 adult preventive services rated grade “A” or “B” by the USPSTF and immunizations recommended by the ACIP. The survey also asked about coverage for seven additional preventive services for women that are recommended by the Health Resources and Services Administration (HRSA) (see Table A2).3 In total, 39 states and the District of Columbia replied to the survey.

The Expanded State of Medicaid in the United States; Private Medicaid Health Plans Crossing the Tipping Point

December 23, 2014 Comments off

The Expanded State of Medicaid in the United States; Private Medicaid Health Plans Crossing the Tipping Point (PDF)
Source: PricewaterhouseCoopers (via Medicaid Health Plans of America)

With the continued implementation of the Affordable Care Act, Medicaid, the government sponsored coverage for the low income and disabled, has generated broad interest and visibility as a core element of our national health ecosystem. Coupled with a historic increase in Medicaid enrollment through expansion, the continuing arc towards private managed care health plans has broad implications for the American population, providers, health plans, and government finances. This paper, a follow-up to 2013’s The State of Medicaid in the United States, seeks to update the comprehensive view of Medicaid composition, assess the impacts of Medicaid expansion – and the opportunity should states choose to expand Medicaid eligibility, and proffer some key takeaways for health plans, policy makers, and others.

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