By Billy Wynne

As he ascends to the Chair of the Senate Finance Committee, Senator Ron Wyden’s recent proposal to reform Medicare by improving care for the chronically ill has garnered significant attention and support. Its topline goal of incentivizing integration of care for high-risk patients is resonating with stakeholders across the health care continuum.

In light of its momentum and Senator Wyden’s imminently expanding authority over Federal healthcare programs, we thought it wise to take a closer look at his plan – the “Better Care, Lower Cost Act” (BCLA). What we found is more interesting, ambitious and – potentially – complex than the headlines suggest.

In essence, the BCLA would allow providers (and health plans) to form new entities – labeled Better Care Programs (BCPs) – that receive capitated payments for all Medicare-covered services delivered to their enrollees. The initiative would initially focus on regions of the country with disproportionately high rates of chronic illness and only medically complex patients would be allowed to enroll.

There are a variety of medical protocols that BCPs would be required to adopt, including development of personalized chronic care plans for each enrollee.

If you are hearing echoes of the Accountable Care “movement,” then you are in the right concert hall but listening to a very different symphony. While BCPs share some characteristics with ACOs, they would differ in important ways. A limited number of ACOs in Medicare currently take full(ish) financial risk, but all BCPs would do so, with some risk corridors instituted in the first few years.

Unlike most ACO programs, control groups would be established for purposes of measuring BCP performance. Also – and this is pivotal – BCPs would be required to proactively enroll Medicare beneficiaries, while patients are typically passively attributed to ACOs.

By taking a giant step down the shared savings path, which it travels alongside ACO programs, the BCLA further blurs the line between traditional fee for service and managed care. BCPs would actually be compensated in the same manner as Medicare Advantage plans, the private insurance option in Medicare.

As with other mergers of fee for service and capitated payment approaches, the BCLA raises important questions about the degree to which provider-based entities should be required to comply with traditional insurance regulations. BCPs would need to demonstrate financial solvency, but the application of other insurance rules, such as those governing marketing and appeals processes, is ambiguous.

There are a variety of other important elements of the BCLA that warrant exegesis. For example, BCPs are permitted to implement value-based variations in benefit design. And, presumably to encourage patients to stay “in-network,” Medicare supplemental (aka Medigap) plans would be prohibited from providing cost-sharing assistance when BCP enrollees receive care from non-BCP providers.

A new quality reporting infrastructure would be established along with creation of Chronic Care Innovation Centers, though effort would be made to align these systems with existing performance measurement programs in Medicare, like the Physician Quality Reporting System.

Application of the program to individuals dually eligible for Medicare and Medicaid creates significant technical issues that the BCLA attempts to resolve. This could warrant a separate post in its own right, but there are transfers contemplated between State and Federal coffers that you can bet will get closer scrutiny from both sides prior to this plan taking flight.

The bill also makes changes to the “Welcome to Medicare” visit and implements new requirements for graduate medical education, with potentially significant financial consequences associated with the latter.

In sum, Senator Wyden’s Better Care, Lower Cost Act ambitiously breaks new ground in the evolution of approaches aimed at efficiently meeting the needs of the chronically ill. At the same time, it may pour some gas on the burgeoning debate about how to best define the line between shared savings incentives for providers and traditional managed care.

I’m sure many of us will be tracking the trajectory of the bill’s cultivation and potential enactment and implementation in the coming months and years. With another Medicare “doc fix” due to spring from about-to-be Chair Wyden’s Committee by March 31, there’s a chance these reforms will demand our attention sooner rather than later.

Billy Wynne is the Founder and CEO of Healthcare Lighthouse, a one-stop shop for comprehensive policy information for healthcare organizations and businesses, where this article first appeared. He is also a Partner at the Washington policy and lobbying firm Thorn Run Partners. Previously, he served as Health Policy Counsel to the Senate Finance Committee.