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HEALTH CARE REFORM: PILOTING THE NEW HEALTH CARE SYSTEM (Part I of III)

05/18/2010 - 9:00 AM

May 18, 2010

This installment of Hall Render's Health Law Broadcast series on health care reform is designed to provide you with the insight, analysis and practical suggestions with respect to the various reform initiatives that will affect your organization.

HEALTH CARE REFORM: PILOTING THE NEW HEALTH CARE SYSTEM

Part I of III

Now that the dust has settled following the enactment of the Patient Protection and Affordable Care Act and its amendments, now commonly referred to as the "Affordable Care Act" (the "Act"), hospitals should consider being proactive so they do not miss out on the substantial opportunities provided for in the Act. Buried in the Act are dozens of pilot programs and demonstration projects that may become a permanent part of the health care landscape. Hospitals should identify the pilot programs and demonstration projects in the Act that might benefit them, so they are prepared to take part as the programs are being implemented. Although the details of these programs have not yet been formalized through regulations, determining a hospital's potential eligibility may require significant lead time. This "Piloting the New Health Care System" series is intended to serve as an introduction to these pilot programs and demonstration projects.

In this first installment, we give a general overview of the programs under the Act and provide a list of the significant pilot programs and demonstration projects. In future installments, we will address the pilot programs and demonstration projects in more detail, including the rationale behind each, eligibility requirements, payment methodologies and implementation timelines.

Overview

While demonstration projects are slated for a limited period of time, pilot programs can be "scaled up" without congressional approval if they are ultimately deemed successful. The idea behind the use of this approach to health care reform is that pilot programs and demonstration projects give the health care system a chance to evaluate success or failure without the needless expense of rolling out programs that do not work.

The Act includes new pilot programs and demonstration projects and the expansion of existing programs related to gain-sharing, pay-for-performance, payment bundling, hospice care and other aspects of the health care system. For example, one of the pilot programs receiving considerable attention in the aftermath of the Act's passage is the proposed national pilot program on payment bundling, referenced in Section 3023 of the Act. This pilot program encourages hospitals, doctors and post-acute care providers to improve patient care and achieve savings for the Medicare program by developing bundled payment models. Under bundled payments, doctors and hospitals would be paid for all services to a patient performed during an "episode of care" provided to a patient in connection with a hospitalization in order to improve coordination, quality and efficiency of health care services. The Act has also generated significant interest in a new form of integrated delivery system known as an accountable care organization ("ACO"). Section 2706 of the Act specifically creates a separate pediatric ACO demonstration project within Medicaid and the Act also provides for the implementation of several other coordinated care demonstration projects. Such new demonstrations may prompt further proliferation of ACOs and similar integrated care models. Both of these programs will be discussed in more detail in future installments of this series.

These pilot programs and projects can assist hospitals in developing innovative responses to health care reform. Below is a list of the Act's new and expanded pilot programs and demonstration projects.

New Programs and Projects

Section 1201	Demonstration project for wellness.
Section 2704	Demonstration project to evaluate integrated care around a hospitalization.
Section 2705	Medicaid global payment system demonstration project.
Section 2706	Pediatric Accountable Care Organization demonstration project.
Section 2707	Medicaid emergency psychiatric demonstration project.
Section 3023	National pilot program on payment bundling (as modified by Section 10308).
Section 3024	Independence at home demonstration program.
Section 3113	Treatment of certain complex diagnostic laboratory tests.
Section 3131	Payment Adjustments for Home Health Care (as modified by Section 10315).
Section 3140	Medicare hospice concurrent care demonstration program.
Section 3508	Demonstration Program to Integrate Quality Improvement and Patient Safety.
Section 4202	Health aging, living well; evaluation of community-based prevention and wellness programs for Medicare beneficiaries.
Section 4206	Demonstration project concerning individual wellness plans.
Section 4306	Funding for childhood obesity demonstration project.
Section 5304	Alternative dental health care provider demonstration project.
Section 5507	Demonstration project to address health professions workforce needs; extension of family-to-family health information centers.
Section 5509	Graduate nurse education demonstration program.
Section 6112	National independent monitor demonstration project.
Section 6114	Demonstration projects on culture change and use of information technology in nursing homes.
Section 10326	Pilot testing pay-for-performance programs for certain Medicare providers.
Section 10504	Demonstration project to provide access to affordable care.
Section 10607	State demonstration programs to evaluate alternatives to current medical tort litigation.

Amended and Extended Programs and Projects

Section 2403	Money Follows the Person Rebalancing Demonstration.
Section 2601	Demonstration projects for dual eligible individuals.
Section 3027	Extension of gain-sharing demonstration.
Section 3123	Extension of the Rural Community Hospital Demonstration Program (as modified by Section 10313).
Section 3126	Improvements to the demonstration project on community health integration models in certain rural counties.
Section 3504	Design and implementation of regionalized systems for emergency care.
Section 3510	Patient navigator program.
Section 4102	Oral health care prevention activities.
Section 4204	Immunizations.
Section 10501	Amendments to Title V. (e) Demonstration grants for family nurse practitioner training programs.

If you would like additional information about any of the pilot programs or demonstration projects above, please contact Steve Hahn (414-721-4443, shahn@hallrender.com); Joe Wolfe (414-721-4482, jwolfe@hallrender.com); Ben Fee (414-721-4467, bfee@hallrender.com ); or your regular Hall Render attorney.

Visit our Health Law Broadcast at hallrender.com/reform for a comprehensive listing of health care reform resources. Also sign up for health care reform alerts and periodic updates as we continue to monitor this important issue.

This information is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

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