CMS

National Health Spending at $3.5 Trillion in 2017, CMS Says

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Spending on physician, clinical care up 5%, to $698 billion

National health spending grew by an estimated 4.6% in 2017, to $3.5 trillion, up slightly from a 4.3% increase in the growth rate in 2016, officials from the Centers for Medicare & Medicaid Services (CMS) said Wednesday.

The projected increase was due in part to increased growth in Medicare spending and higher premiums for health insurance bought through the Affordable Care Act’s marketplaces, officials said. Over the longer term, national health spending is expected to increase 5.5% annually over the next decade — 1% faster than the increase in the gross domestic product during that period — reaching a total of $5.7 trillion by 2026.

Spending on physician and clinical services grew by an estimated 5% in 2017, to $698.3 billion, a decline from 5.4% in 2016, said Gigi Cuckler, an economist at CMS’s National Health Statistics Group, at a briefing here sponsored by Health Affairs which published a paper containing the CMS study. The proliferation of high-deductible health plans, which encourage less spending on healthcare, will have contributed to that deceleration, she told MedPage Today.

“Research continues to show that this sector is disproportionately impacted … by shifts to these types of plans,” she said. In addition, prices for physician and clinical services grew moderately in 2017, at 2.4%, but are expected to increase slightly faster in 2018, at a rate of 2.8%, Cuckler said.

Healthcare’s share of the gross domestic product is expected to rise from 17.9% in 2016 to 19.7% by 2026, she continued. The health spending and enrollment growth during that time will largely be driven by fundamental economic and demographic factors — projected income growth, increased prices for medical goods and services, and increasing enrollment in Medicare due to the aging of the population.

By 2026, federal, state, and local governments are projected to sponsor 47% of national health spending, up slightly from 45% in 2016, she said. And Medicare growth is expected to increase in the 2021-2026 period in terms of payments to physicians and clinics, “in part related to incentive payments for MACRA [Medicare Access and CHIP Reauthorization Act] legislation,” said Cuckler.

In terms of health insurance, the insured share of the population is expected to decline slightly over time, from 91.1% in 2016 to 89.3% by 2026, in part because the ACA’s individual mandate — requiring people to purchase health insurance or pay a penalty — was eliminated in the tax reform bill passed in December, she said.

Private health insurance spending on medical benefits is expected to have grown relatively slowly in 2017, at 4.7%, Cuckler said. The slower growth is a result of several factors, including the proliferation of high-deductible plans, efforts by employers to manage healthcare costs, and the aging of Baby Boomers into Medicare.

Spending on hospital care, on the other hand, is expected to grow at 5.5% annually over the decade, although 2017 spending is expected to reach $1.1 trillion, representing a 4.6% increase over the previous year — similar to a 4.7% increase in 2016, said Andrea Sisko, PhD, also an economist in the National Health Statistics Group. “While growth is expected to be the same or somewhat faster for most major payers, for hospital spending, growth in private health insurance [hospital payments] is expected to slow by 0.9 percentage points,” she noted.

Spending on prescription drugs is expected to increase an average of 6.3% annually from 2017 to 2026, Sisko said. “The effect of [drug] rebates on spending is expected to level off in the second half of the projection period, as rebates’ share of prescription drug spending is expected to increase more slowly compared to the recent past starting in 2018. As result, prescription spending growth is expected to be stronger than it might have been otherwise, given the greater influence of relatively costly specialty drugs … on overall health spending growth.”

Growth in prescription drug spending is expected to take a bit of a jump soon, from an estimated 2.9% increase in 2017 to a 6.6% increase in 2018. “The dollar value of drugs going generic is predicted to be less of a factor in 2018 than 2017, so price increases of brand name drugs won’t be [ameliorated] by drugs going generic,” Sean Keehan, a senior economist in the National Health Statistics Group, noted on a phone call with reporters Wednesday. “We are also expecting a small increase in the use of drugs in 2018.”

And finally, specialty drugs, such as high-cost cancer drugs, “as we move into the latter stages of the projection period, will exert more influence on spending,” John Poisal, deputy director of the National Health Statistics Group, said on the call.

CMS Proposes Opioid Prescribing Limits for Medicare Enrollees

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Drug plans would implement ‘hard formulary levels’ at pharmacies

WASHINGTON — Pharmacies would have new limits on filling opioid prescriptions for Medicare beneficiaries under regulations proposed Thursday by the Centers for Medicare & Medicaid Services (CMS).

“We are proposing important new actions to reduce seniors’ risk of being addicted to or overdoing it on opioids while still having access to important treatment options,” said Demetrios Kouzoukas, CMS deputy administrator and director of the Center for Medicare, on a phone call with reporters. “We believe these actions will reduce the oversupply of opioids in our communities.”

Under the proposal, Part D plans would implement so-called “hard formulary levels” at pharmacies which would restrict the amount of opioids that beneficiaries could receive. “These are triggers … [that] can prompt conversations between physicians, patients, and plans about appropriate opioid use and prescribing,” Kouzoukas said. “The trigger can only be overridden by the plan sponsor after efforts to consult with the prescribing physician.” The safety level would be a 90 morphine-mg equivalent (MME) with a 7-day supply allowance.

The proposal also would limit the number of pills in an initial prescription for acute pain, “possibly with or without a daily dose maximum,” he said, adding that CMS is accepting comments on the proposals through March 5. In addition, CMS “expects sponsors to implement ‘soft’ safety edits” to flag a potential problem, although those could be overridden by the pharmacist.

CMS “is also enhancing [our] very successful opioid utilization monitoring system by adding flags for beneficiaries who use certain drugs in combination with prescription opioids,” said Kouzoukas. “And we’re considering a new measure on the concurrent use of opioids and benzodiazepines. We believe these measures are important to … safeguard the health and safety of our nation’s seniors.”

These actions are part of the agency’s effort “to end the scourge of the opioid epidemic” in response to a call to do so by President Trump, he said. CMS’s opioid utilization monitoring system “is already successful in reducing the risk of overprescribing of opioids in the Part D program.” The agency made other proposals last November, including one allowing plans to limit beneficiaries’ access to opioids by having them go through only a selected prescriber and selected pharmacies, Kouzoukas said.

CMS also announced several other proposals in its Medicare Advantage call letter Thursday, including a new star rating for statin use among patients with diabetes or cardiovascular disease, and the inclusion of certain additional supplemental health benefits for Medicare Advantage enrollees if the benefits would compensate for physical impairments or reduce emergency department utilization.

Medicare’s Efficiency Measure for Head CT for Atraumatic Headache Is Profoundly Flawed.

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A multicenter review of medical records shows that the measure is wildly unreliable, invalid, and inaccurate.

As part of their initiative to publically report and eventually pair reimbursement with specific quality and efficiency measures, the Centers for Medicare and Medicaid Services (CMS) developed an efficiency measure to evaluate use of brain computed tomography (CT) for emergency department (ED) patients who present with atraumatic headache. The measure (CMS OP-15) uses administrative billing data for patients with a final diagnosis of nonspecific headache. A CT scan is not included in the calculation (i.e., considered appropriate) if the patient has any of the following exclusions, which were derived based on guideline review and expert opinion: headache associated with lumbar puncture, dizziness, paresthesia, lack of coordination, subarachnoid hemorrhage, complicated or thunderclap headache, focal neurologic deficit, pregnancy, HIV, tumor or mass, or CT scan related to reason for admission. The National Quality Forum (NQF), which typically reviews and approves all measures for the CMS, rejected the proposed measure because it lacked scientific validity. The CMS implemented the measure despite the NQF finding.

These authors assessed the reliability, validity, and accuracy of the measure in a retrospective review of medical records for a convenience sample of 748 patients deemed by the CMS as having received inappropriate head CT because no exclusions were documented. The authors determined that exclusions were documented in the medical record for 489 patients (reliability, 35%) and that universally accepted indications for head CT (according to expert consensus, society guidelines, and literature) were present for 123 of 259 patients without exclusions documented in the medical record (validity, 48%). Overall accuracy of the measure was 17%.

Comment: CMS OP-15 should be immediately discontinued because it is fatally flawed: it was not validated with chart review and was implemented against the recommendation of the National Quality Forum, thus discrediting both organizations. Implementation of CMS OP-15 is unjustifiable and inexcusable and represents a complete abandonment of patient safety and quality of care in favor of thoughtless reduction of reimbursement for CT scans, which, according to national guidelines, are indicated and appropriate. In addition, implementation of this ill-conceived measure raises concerns about the ability of the CMS to police itself or anything else.

Source: Journal Watch Emergency Medicine