CMS officials say they are making changes to the HIX risk corridors program to account for "unexpected administrative costs and pricing uncertainties."

Federal officials have released market standards and regulations for the PPACA exchanges. The final 2015 rule, released last week, includes risk program adjustments crafted to ease upward pressure on premium rates, more robust collection of quality information from insurers, and tighter standards for "navigators" who help people pick the HIX health plan that best suits their needs.

In addition to those changes, the final rule requires health plans to make coverage decisions within 24 hours on essential prescription drugs that are not covered by the plan. It also provides flexibility to states in the administration of the Small Business Health Options Program, within which PPACA exchanges offer group insurance coverage to small employers.

Insurers Prep 2015 HIX Premium Rates

"This rule will help to improve consumer protections, keep premiums affordable, and make additional information available to consumers in the future, such as quality ratings that will help them to better compare and choose plans," CMS officials said in a blog post Friday.

Accounting for HIX Risk
In a fact sheet accompanying the rule's release, CMS officials said they are making changes to the HIX risk corridors program to account for "unexpected administrative costs and pricing uncertainties." The risk corridor changes feature raising the ceiling on administrative costs by two percentage points and raising the floor on profits by two percent.

"Health plans can have more administrative costs and more profits in 2015," says Jenn Kowalski, a vice president at DC-based Avalere Health who leads the company's healthcare reform practice.

She says the final rule also sets new regulations for the exchanges' reinsurance fund. Under the PPACA, reinsurance fees are collected from all health plans to fund the HIX reinsurance fund, which helps health plans offering individual policies on the exchanges pay for costly patient cases. "That's a positive for the plans," Kowalski said.

Michelle Oxman, a health law analyst at Wolters Kluwer's Health Reform KnowlEDGE Center in Illinois, says CMS officials have signaled strong support for the HIX reinsurance program. "In the preamble [of the Final 2015 rule], the agency says that it intends to retain any excess collections to safeguard against shortfalls in future years and that if collections are not sufficient to make the required payments in one year, the amounts due to issuers will be paid from the next year's collections."

Quality Reporting
The final rule boosts quality reporting requirements for health plans. CMS plans to require publication of quality rating information on all PPACA exchange websites before the open enrollment period for the 2017 plan year. Metrics for gauging health plan enrollee satisfaction are among the quality measures to be added.

"It probably will look a lot like the Medicare Advantage stars system," Kowalski says of quality ratings for health plans offered on the exchanges. "It will be organized into domains of related measures, then the individual measures themselves."

Oxman says CMS will be collecting quality data from state and federally operated exchanges to "ensure consistency," but many details of the quality reporting effort have not been finalized. "The agency is still trying to figure out how 'granular' the reporting/rating should be," she says. "For example, should plans be sorted by metal level, as well as PPO vs. HMO?"

Navigator Standards
The HIX rules for 2015 include new regulations "to ensure that Navigators and other assisters are able to carry out their responsibilities to help consumers enroll in insurance coverage while meeting federal requirements for assister programs," CMS fact sheet says.

When the proposed Final 2015 rule for the exchanges was released in March, a CMS spokeswoman confirmed that the navigator regulations were aimed at states such as Missouri and Tennessee that had passed laws to restrict the activities of people assigned to assist HIX enrollees.

Oxman says the final rule strengthens the navigator program internally and externally: "Navigators and consumer assistance providers may be required to produce corrective action plans and pay civil money penalties if the Department of Health and Human Services finds they have violated federal requirements. The limits on states' power to regulate navigators are spelled out a bit more because of the turf war."

Exchange 'Growing Pains'
While CMS officials appear pleased with the evolution of the PPACA exchanges, the Medical Group Management Association raised a red flag on Tuesday.

MGMA conducted research in April to assess the impact PPACA exchanges have been having on group medical practices. The research includes responses from more than 700 medical groups that employ a total of 40,000 physicians.

"Physician group practices are expressing dissatisfaction with the complexity and lack of information associated with insurance products sold on ACA exchanges," MGMA President and CEO Susan Turney, MD, said Tuesday in a media statement.

In a phone interview Tuesday, MGMA Senior VP Anders Gilberg said "there are some definite growing pains" on the exchanges that are affecting physicians. In particular, he said, medical practices are struggling to get information from insurers operating on the exchanges and are facing problems linked to the so-called narrow networks that many insurance carriers established for exchange patients as a cost-containment measure.

Medical practices are being forced to allocate limited administrative resources in often fruitless efforts to contact insurers about health plan deductibles and insurance eligibility verification, he added. "It's critical for the providers to talk with patients about cost sharing," Anders said, explaining that many exchange participants have opted to purchase health plans with deductibles that result in high out-of-pocket expenses.

Anders said narrow networks have been a major source of frustration for MGMA members. "Even if you are in a network, the referrals you used to make are much harder. Our groups and physicians are not denying care, but they want their patients to get the most out of their insurance."

MGMA plans to conduct another survey of its members in the fall to see whether the growing pains on the exchanges are persistent or improving.

A multidisciplinary medical task force of the North American Spine Society is recommending best clinical practices for more than a dozen spinal treatments, surgical procedures, and diagnostics. The information is being shared with health plans.

The North American Spine Society is seeking to boost transparency in spine care, with a set of new insurance coverage policy recommendations.

"These are coverage recommendations that have been vetted extensively," says Christopher Bono, MD, an orthopedic surgeon and second vice president of NASS.

The recommendations, released this month, cover 13 treatments, surgical procedures, and diagnostics, such as cervical artificial disc replacement (CADR) and lumbar fusion. They include clinical criteria that indicate whether or not a particular kind of spine care is indicated for a patient with specific diagnoses and symptoms. NASS is expecting to release 14 more coverage policy recommendations.

The Burr Ridge, IL-based organization's coverage task force, which helped craft the recommendations featured "the whole gamut" of spine health professionals including surgeons and radiologists. "It's a product that's different than anything NASS has done before," says Bono.

The chief of spine service at Brigham and Women's Hospital in Boston, Bono says improving transparency in spine care is a top goal of the NASS recommendations. "The status quo has been insurance companies developing their own coverage policies," he said, characterizing NASS's traditional role in the process as reactive. "NASS would see a draft and it was not always clear how the policies were set."

A key directive to the NASS coverage task force was to apply the principles of evidence-based medicine. "For most things that we do, fair coverage will be based on published data," Bono says.

In the past, when the evidence was not available or not clear, the task force followed the "reasonable man theory" of the US justice system as its guide. "We tried to strike that balance on those procedures where data was absent," he said. "We tried to present what a reasonable spine surgeon would think is appropriate."

For example, the NASS recommendations portray cervical artificial disk replacement as an "emerging/emerged technology" that appears capable of achieving results similar to cervical fusion procedures.

"Though not currently to be considered the standard of care for treatment of degenerative cervical disorders, [CADR] has shown promising results in the available data, indicating at least equivalence to cervical fusion following adequate decompression," The NASS guidelines say.

Bono said it will take time for the NASS recommendations to have an impact in the marketplace. "I would anticipate this is a five- to ten-year project," he said. "It's going to take multiple patients and multiple years to see if this makes a difference."

The Boston-based surgeon says early contacts with payers about the recommendations have been encouraging. NASS shared the organization's lumbar fusion recommendations with United Healthcare officials about seven months ago. "The feeling was quite positive," he said. "They made some requests to make it more useable."

Another payer, Cigna, is also weighing in on the NASS recommendations. David H. Finley MD, Cigna's national medical officer for enterprise affordability and policy, says the NASS guidelines should help the insurer set insurance coverage guidelines.

"Cigna appreciates the recommendations from NASS and will take them into consideration," he said. "Most of Cigna's coverage policies are reviewed annually and our decisions are based on a thorough study and analysis of the latest scientific evidence. We also consider guidance from medical societies."

Joseph Gregory, a surgical devices analyst at London-based GlobalData, says the NASS recommendations are a positive contribution to the spine surgery field, which has drawn scrutiny over explosive growth in spine fusion procedures. From 2002 to 2011, the annual number of US spine fusion procedures increased 77 percent, rising from 260,000 surgeries to 460,000, according to the federal Agency for Healthcare Research and Quality.

"They're a fantastic initiative by NASS," Gregory says of the new recommendations, adding the International Association of Spine Surgeons has released similar guidelines to "promote education on payment."

Gregory, who has been working on a spine fusion report that GlobalData is set to release soon, says the "The level of detail [in the NASS recommendations] is really great. "The breadth is definitely there."

In a prepared statement released with the spine care coverage recommendations, NASS President William Watter III, MD, MMS, MS, said better guidance is needed in the field for several reasons. "Maintaining patient access to high-quality, evidenced-based and ethical spine care is the single most important part of NASS' mission," he said.

"It is our hope that payers, spine specialists, and their patients will use these evidence-based coverage recommendations as a reference to advocate for appropriate care for patients."

Highmark, the Pennsylvania-
based integrated healthcare network, seeks to use ACOs and primary care medical homes to transform the way it does business.

One of the biggest Blue Cross Blue Shield carriers in the country says it is pushing the accountable care organization envelope.

Highmark Inc. has offered BCBS health plans for more than 75 years. A year ago, the Pittsburgh-based payer acquired the seven-hospital Allegheny Health Network, which helped make Highmark the third-largest integrated delivery network in the country.

Now the 5.2 million-member insurer with operations in Delaware, West Virginia, and Western Pennsylvania is banking on the ACO model to drive down costs in the seven-hospital network and spur development of a sprawling integrated healthcare delivery system.

In a phone interview last week, a pair of Highmark executives described the company's quest to transform the way the Blues does business. "We're trying to change our primary care model," said Mark Piasio MD, MBA, medical director at Highmark.

Deborah Donovan, director of provider performance and innovation at Highmark, said merging payer and provider offers valuable opportunities for the partners to leverage each other's skills and resources.

"Payers have incredibly rich data sets that we haven't shared with providers; we haven't really needed to because of the focus on care [to the exclusion of cost in the fee-for-service system]," she said. "The holy grail is when we can link the rich claims data with the clinical data the providers have."

Piasio, who practiced as a physician for 25 years, says he "never really understood the incredible complexity of what an insurer has to do. We still have a ways to go [toward] sharing data."

After finalizing the financial framework of its payer-provider partnership in the first months after the Allegheny acquisition, Highmark turned to "the loftier goals" of an ACO transformation, with primary care medical homes driving the process, Piasio said.

"It's interesting serving two masters, being both payer and provider," he said of the effort required to get the health plans and their providers working toward shared goals of lowering costs while raising efficiency and quality standards. "This is not a two-week project. This is a journey."

Bring in the Clinical Transformation Consultants
Donovan says Highmark's medical homes follow established regional and national models that focus on clinical quality and cost of care. Two key elements of the company's ACO genesis are a staff of "clinical transformation consultants" who are helping physicians retool their practices and the establishment of gain-sharing programs with physicians.

"We are partnering with our providers and helping them transform… "[The clinical transformation consultants] work in the areas the practices need," Donovan said of the 30-member specialized consultant staff. "That's a major commitment on the part of the health plan."

Highmark is in negotiations with several physician practices to establish gain-sharing programs, she said, noting that "high volumes" of patients are required to optimize the benefits for both payer and provider.

"It's a good tool to use," Piasio said of gain-sharing programs. "We're exploring them everywhere they make sense."

He believes medical homes are particularly effective in helping patients manage chronic illness in a way that improves quality of life and contains costs. "They need a great deal of coordination to make sure one condition is not affecting another," Piasio said of chronic illness patients.

"How we deliver primary care and how specialists view the world will be totally different than we have today. Otherwise, we will be just kicking the can down the road."

In addition to the clinical transformation consultants, Highmark is providing financial support to help physicians invest in the changes needed adopt the medical home model and operate within the new integrated delivery system.

Highmark has provided funding for electronic health record upgrades and developed "detailed analytics" to share with physicians to help them understand more about the medical needs of their patient populations. "We're providing that on our dime. We are fully supporting them on all fronts," Piasio said.

Early Results
About 850,000 Highmark health plan members are receiving medical services through 3,500 physicians at primary care medical homes. "It's a significant footprint," he said, adding the early results are promising. The payer has documented an uptick in "gradable quality scores" among practices that were already participating in quality programs," Piasio said.

And Highmark's medical homes are starting to pay off on the cost side. "For the most part, relative to the market, they are outperforming those who are outside the system. Our costs are trending below the market," he said.

Donovan said the startup phase of Highmark's ACO drive will take several years. "We're looking at this being a three-to-five year assessment," she said. Piasio believes sustaining and growing ACOs and other value-based healthcare delivery systems will take much longer.

"This isn't easy. There are a great many complex parts that go into how Americans get and pay for healthcare. If it got changed in a generation, that would probably be good," he said. "It's a huge endeavor, but what we're seeing early on is there is uptake… At least the train has started moving."

For the past decade, healthcare providers have been in the vanguard of efforts to combat the abuse and diversion of opioid pain medications such as Oxycontin. Now state and federal officials and health plans are joining the fray.

For the rest of his time on Earth, one of my best friends will be walking the fine line between the life-preserving benefits of opioid pain medication and addiction.

I call my friend The Mayor of Martha's Vineyard. For The Mayor, powerful pain medications have been a blessing since 2002, when both of his lower legs were shattered in a horrific car crash on the island. The driver, one of his best friends, died in the driver seat beside him.

"My body will never be the same, and I need surgeries every two years just to be functional," The Mayor told me this week. He has been "tapered off" all opioid medication this year, but knows he will go back on oxycodone or Percocet following a hip replacement procedure in the fall, another consequence of the deadly wreck.

The Mayor is resigned to his need for opioid medication and the necessity to take steps to avoid addiction. A pain management doctor has been working alongside his primary care physician for the past three years, and monthly urinalysis testing is part of the pain doc's deal.

"That's probably the best thing as part of their treatment program," he said of the urinalysis tests, which not only keep patients honest but also provide pain doctors with solid data to help manage medication dosage. "And most people will do [the urinalysis voluntarily]. They are not addicts. They're law-abiding citizens."

Blue Cross Blue Shield of Massachusetts started ramping up efforts to help avert the misuse of painkillers about two and half years ago. "A small number of our members were responsible for a high number of our prescriptions," Tony Dodek MD, the Blue's associate chief medical officer and VP of medical quality and strategy, told me this week. "Those same numbers were driving up our costs."

The payer decided to help members find a balance between getting opioid pain medication when warranted, while avoiding the danger of addiction. A new painkiller prescription policy that applies to all members except cancer patients and the terminally ill has posted "remarkable results," he said.

Under that policy, health plan members trigger a painkiller safeguard program after they reach a 30-day treatment threshold. A threshold is described as any number of prescriptions in a coverage year that add up to 30 days of treatment with an opioid pain medication. Once a member reaches the 30-day threshold, the health plan requires pain management safeguards such as a treatment plan and limiting members to obtaining painkiller prescriptions from one physician.

Dodek says the new prescription policy has generated two positive results over its first 18 months:

1. Prescriptions of narcotic pain medications fell by 6.6 million pills
2.  The company received only one member complaint.

"We had no disruption of pain medication for legitimate needs," he told me.

BCBS of Massachusetts' prescription policy also requires physicians to start pain medication prescriptions with short-acting formulations, which are generally less addictive than long-acting drugs. The policy shift, which applies to all members except cancer patients and the terminally ill, has resulted in a 50 percent reduction in prescriptions for long-acting painkillers, Dodek says.

And the health plan sends monthly letters to physicians about members who may be "pill shopping" for pain medication from several doctors simultaneously. "We see that in our claims pretty quickly," he told me, noting prescription claims are processed in real-time.

Another payer, Aetna, has launched "active surveillance" efforts on its members to help ensure that pain medications are not abused or diverted, Edmund Pezalla MD, MPH, the company's national medical director for pharmaceutical policy and strategy, told me this week. "We're looking for those [members] who have been getting a lot of narcotics at higher doses," he said. "We have a pharmacist who looks at this."

Pezalla says Aetna, which has 22.7 million medical insurance policy members and more than 600,000 physicians in the company's healthcare networks, reaches out to patients when painkiller abuse or diversion is suspected. "We offer patients counseling. We try to get to the patients, and assume they are people who need help." He notes that the health plan covers substance abuse treatment programs and can restrict a member's access to painkillers. "We can limit them to a single pharmacy or a single doctor."

While acknowledging that any snooping in members' claims data raises privacy concerns, Pezalla says health plans bear a responsibility for patient safety in the area of prescription medication.

"Safeguarding the privacy of our membership is very important to us," he told me. "But under HIPPA and other laws and rules, we can track anything that is part of the payment system or normal care."

Pezalla says Aetna is generally supportive of public policy efforts to address the abuse and diversion of painkillers, including state-based registries that track prescriptions of narcotic medications. "If a state puts a registry together, we will help them. We are here to help where we can," he told me. "The improper use of medication just makes it harder for the patients who need it."

Governors Take a Stand
In January, Vermont Gov. Peter Shumlin (D) devoted his entire state of the state address to the Green State's drug addiction crisis. In March, Massachusetts Gov. Deval Patrick declared an opioid abuse public health emergency in the Bay State.

"We have an epidemic of opiate abuse in Massachusetts, so we will treat it like the public health crisis it is," Patrick said in a prepared statement. His office announced a range of measures designed to combat the problem, including mandatory physician and pharmacist use of the state's narcotics prescription registry.

Background facts provided in the statement paint a dire picture of opioid abuse: "The use of oxycodone and other narcotic painkillers, often as a route to heroin addiction, has been on the rise for the last few years in Massachusetts. At least 140 people have died from suspected heroin overdoses in communities across the Commonwealth in the last several months, levels previously unseen. From 2000 to 2012, the number of unintentional opiate overdoses increased by 90 percent."

In April Patrick went so far as to order a ban on a new painkiller, Zohydro, until officials can "safeguard against the potential for diversion, overdose and misuse." Zohydro is a long-acting form of hydrocodone. (Vicodin is a short-acting form of the drug.) Federal and state officials, including Sens. Mitch McConnell (R-KY), Lamar Alexander (R-TN) and Tom Coburn (R-OK) and 29 attorneys general, are urging the FDA to reconsider its approval of Zohydro. The drug's maker says it is working to develop an abuse-resistant formulation of the drug.

Meanwhile, the Mayor of Martha's Vineyard hopes his governor can walk the fine line between cracking down on the minority of patients who abuse or divert painkillers, and the majority of patients who need pain medication to cope with arduous suffering.

"The percentage of people who take these drugs and abuse them is miniscule compared to people getting good treatment," The Mayor told me, adding a backlash against painkiller prescriptions is already having a chilling effect in the medical community. "They're just afraid for their jobs."