Senator Wyden’s Better Care Lower Cost Act – Time to Take a Look

Imagine a mash-up of a Medicare Advantage Plan with an Accountable Care Organization (ACO) with (theoretically) more of the good and less of the bad; well, Senator Ron Wyden (D-OR) has.  Earlier this year, not long before he assumed the chairmanship of the Senate Finance Committee, Senator Wyden introduced the bipartisan Better Care, Lower Cost Act (S. 1932).  He was joined by his Senate colleague Johnny Isakson (R-GA), and across the Capitol complex, Representatives Erik Paulsen (R-MN) and Peter Welch (D-VT) sponsored the companion measure (H.R. 3890).  The purported goal of the legislation is to improve the care provided to chronically ill Medicare beneficiaries by eliminating some of the barriers that providers, insurers, economists, and health policy experts have identified under the current fee-for-service reimbursement system, which stand in the way of coordinated and improved care and outcomes.  The bill also removes some of the restrictions and limitations that currently apply to federal accountable care organizations (ACOs), such as the attribution of patients.  The bill’s approach seeks to reform the provision of inpatient, outpatient, and post-acute care, with a focus on chronic disease management – combining resources from Medicare parts A, B, and D and setting a cap under which plans must operate and allowing for shared savings.  The bill encourages insurers, physicians, suppliers, and others to join together to offer a health insurance plan like an HMO.

In the more than six months since the bill showed up on it has not garnered any additional House or Senate co-sponsors nor has it seen any legislative action.  So why pay attention?  Because health care continues to consume significant resources, time, and attention and with more than 10,000 people a day turning 65 and an estimated one-in-three Americans living with at least one chronic disease, the Medicare program will continue to experience significant strain.  This strain places enormous stress on the nation’s economic well-being, resulting in additional downward pressure on health care providers.  The federal government and commercial payers are continuing to ask the health care system to do more with less and also are expecting things to be done differently.  Policymakers will continue to look for new ways to deliver and pay for care – particularly for the nation’s oldest, sickest, and most expensive patients.  Many initiatives – public and private – are underway to test new models to care for patients, change incentives, and otherwise modify the fashion in which health care is delivered and funded.  Senator Wyden, as the new Chairman of the Senate Finance Committee, shows us in his 54-page proposal the innovation he envisions to address the problem of escalating health care costs and achieve the goal of improving health outcomes.

With so much change in the health care system and industry, the lines increasingly are being blurred between traditional payers and providers.  Chairman Wyden seeks to erase the lines altogether, encouraging insurers/payers, providers, and suppliers to join forces and form what is called a “Better Care Program.”  The bill focuses on the drivers of cost:  Medicare beneficiaries with chronic conditions and those at higher risk for poor outcomes.  It does this by requiring Better Care Programs to provide the trifecta of physical, behavioral, and psychosocial care.

The bill puts forth a construct for a different kind of Medicare delivery system where providers, insurers, and suppliers target certain beneficiaries with strategies that allow for more engagement with patients in their care, and create stronger, more connected and lasting relationships between patients and providers to control and coordinate care in order to improve health outcomes and keep costs down.  A key aspect of the legislation is the requirement for Better Care Programs to create individualized care plans for each beneficiary in an effort to address unique health care needs.  Better Care Programs are allowed to offer various incentives, like value-based benefit design (read: different cost sharing levels so payment aligns with the benefit to the patient).  Through such incentives and the design and delivery of personalized, team-based care, beneficiaries would be encouraged to stay in the Better Care Program “network.”  Entities already engaged in other alternative payment models, including ACOs, also may form a Better Care Program; the bill does not restrict participants to only one Medicare alternative payment and delivery model.

Chairman Wyden and his colleagues have proposed a creative and never seen before framework specifically for Medicare beneficiaries with chronic disease – completely leaving fee-for-service in the rear-view mirror.  As always, the devil is in the details.  Setting the amount of the capped payment is critical to ensuring that plans and providers have the resources they need to provide the range and quality of care envisioned in the bill.  With the latest temporary Sustainable Growth Rate (SGR) physician “fix” expiring in March 2015, Congress will either have to pass a short-term patch or attempt broader SGR reform once again.  Depending on how the Better Care, Lower Cost Act scores, it could be considered as part of this effort.

The views expressed are the author’s own and this column should not be considered an endorsement of the legislation.  For a summary of the legislation, visit

Ilisa Halpern Paul, MPP, is President of the District Policy Group at Drinker Biddle, a bipartisan, boutique, full-service advocacy, public policy, and government relations group.

Morning Consult