Top 12 Uncertainties Hovering Over Healthcare

Cheryl Clark, November 21, 2011

Updated December 9, 2011 to correctly identify certain conditions dropped from value-based purchasing incentive payment metrics for 2014.

If ever there was a year in which "anything could happen" in healthcare, 2012 just might be it. Numerous major decisions, regulations, and policy rollouts loom, including how severely physicians' pay will be cut and whether the Affordable Care Act itself is a constitutional document. We look at a dozen potential game changers.

Get ready for 2012. It's going to be a wild ride, for sure.

1.The Joint Select Committee on Deficit Reduction, a.k.a. the Super Committee
This bipartisan panel has just hours – by Wednesday Nov. 23 – to come up with a plan to reduce all federal spending by $1.2 trillion over 10 years to avoid the "sequester," which would mean an automatic 2% across the board cut in payments to Medicare providers starting in 2013. 

As of this morning, reports indicated they were at an impasse defined by party lines.  For some health leaders, this may be a good thing, as some proposals being aired behind the Super Committee's closed doors would target Medicare spending even more than the 2%.

Congress, of course, makes the rules, and Congress could decide to change the rules, as some elected officials hope.

2.The Sustainable Growth Rate
No story about healthcare in 2012 is complete without a mention of the 27.5% guillotine hovering over physician Medicare fees effective Jan. 1. The Medicare Payment Advisory Commission backs a plan to repeal the SGR at a cost of $200 billion.  It would freeze pay for primary care physicians for 10 years. It would cut by 5.9% pay for specialists for three years, and freeze their pay for the remaining seven.

This of course pours more gas on the flames of tension that already exist between primary care providers and their specialist partners, even as they attempt to form integrated delivery systems that streamline care and avoid unnecessary services. Many healthcare leaders suggest that if the Super Committee comes up with some plan, imbedded within it will be a remedy for the SGR.

3. The Supreme Court on the PPACA 
The constitutionality of the Patient Protection and Affordable Care Act is up for argument with five and a half hours of set aside for debate in March, and a decision expected in June, right in the middle of the presidential campaign. Justices are expected to consider a number of aspects of the 2010 law, not just the legality of the individual mandate, which requires most Americans purchase health insurance by 2014.

For starters, they're expected to decide four other key issues
• Whether the law is valid without the individual mandate.
• Whether other parts of the law, such as the one prohibiting health insurers from rejecting applicants based on pre-existing conditions, are valid.
• Whether the court is legally empowered to rule on the mandate before it takes effect in 2014 or must wait until after.
• Whether the new law's tremendous expansion of the Medicaid program to more beneficiaries – in which states must pay a gradually increasing portion of the cost of these enrollees – meets constitutional muster.

4.  Hospital Readmissions
Hospital providers are anxiously awaiting several key decisions from the Centers for Medicare & Medicaid Services over how the agency intends to interpret and apply penalties against hospitals that have higher than expected rates of 30-day readmissions in three disease categories: heart failure, heart attack and pneumonia.
Several providers and analysts we spoke with said the agency has failed to adequately address two issues: how it will deal with scheduled readmissions, which some hospitals have many more of than others (such as certain elective cardiovascular procedures), and how they will determine a formula to adjust for variation in risk in diverse patient populations across the country.

Several leaders we spoke with said they expect numerous refinements in coming months.

"Our concern is that they're not excluding planned scheduled readmissions," said Don May, Vice President for Policy at the American Hospital Association.

"The readmissions issue is a very messy area," says Paul Keckley, Executive Director of the Deloitte Center for Health Solutions. CMS has contracted with a team at Yale's Center for Outcomes Research and Evaluation to come up with risk adjustment formula. Keckley expects CMS will roll out some measure for applying these penalties sometime before March 30, probably for comment.



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