FTC Staff Seeks Empirical Research and Public Comments Regarding Impact of Certificates of Public Advantage; Project No. P181200 #00131

Submission Number:
Richard Fuller
3M Health Information Systems
District of Columbia
Initiative Name:
FTC Staff Seeks Empirical Research and Public Comments Regarding Impact of Certificates of Public Advantage; Project No. P181200
REF: COPA Assessment, Project No. P181200 Dear Secretary Clark, Thank you for the opportunity to comment on the Commission's ongoing study of the impact of certificates of public advantage (COPA) in the healthcare sector. 3M Health Information Systems (3M HIS) works with state Medicaid agencies and commercial payers to provide classification solutions that help define standardized unit costs of services and through which to interpret the quality of services provided. In addition to our work with commercial and Medicaid payers, we work under contract to CMS to maintain and update the Medicare Severity Adjusted Diagnosis Related Groups (MS-DRG) that provide the basis for defining payments and costs under the Inpatient Prospective Payment System and to maintain and update the Ambulatory Patient Classification system that serves a similar role within the Outpatient Prospective Payment System. Like the FTC and others, we are witnessing ongoing significant consolidation within the healthcare services industry and, in particular, state efforts to balance the needs of maintaining choice and competition among healthcare providers within a locale with the need for scale to achieve greater care quality through system wide coordination in a cost-effective manner. Our comments address two specific FTC requests for input: - How might existing research on conduct remedies, rate regulation, or other regulatory economics inform our understanding of COPAs and other state-based regulatory approaches? - What additional types of research would be useful? Are there natural experiments that would be particularly relevant to understanding the effects of COPAs? What data are available for this research? With this background, we offer the following comments on how to effectively evaluate the value of COPAs: - Define the units of service using a standardizing methodology. These should be aggregated into recognized service bundles (i.e. hospitalization or outpatient encounter) using a standardized measure of services that permit comparison of cost changes over time. - Define the health status and annual average cost of a defined enrollee population. Once again, using a standardized definition of enrollee permits comparison of cost changes over time. - Standardization needs to be based upon clinical credibility. This requires that units of service must be more readily understood and interpreted from a clinical perspective. Categorical, clinical models meet this definition as their structure allows for the comprehensive specification of the interaction among multiple comorbid diseases that is essential for identifying high-risk patients and creating an unbiased comparison of quality programs. Moreover, the use of a well specified clinical description permits better comparison and case equivalency over time. - Quality standards should be set unambiguously and quantified in terms of system related cost. For example, an investment in coordinated care that reduces readmissions requires a quantification of the value of the readmission reduction to understand whether the investment in care coordination is a net value gain relative to the reduction in total readmission cost. - Standards applicable to one COPA evaluation should not vary by state. - Ideally, the information provided to the FTC in evaluating the benefit of a COPA should be provided by the state as part of routine data production that helps the state with the wider concern of monitoring health system performance. Again, thank you for the opportunity to submit these comments. We would be happy to discuss these approaches in greater detail, both in theory and through examples of work already conducted by state's Medicaid programs. If you have any questions, please contact Megan Ivory Carr at mmivory@mmm.com or 202.414.3042 for further information.