Cutting hundreds of billions of dollars from Medicaid, as the GOP's Better Care Reconciliation Act proposes, makes no sense to some healthcare leaders.
In the healthcare industry, the chorus of alarm over congressional proposals to slash Medicaid is thunderous.
In a joint letter to Senate leaders released Friday, the presidents and CEOs of America's Health Care Plans (AHIP) and the BlueCross BlueShield Association called the latest amendment to the GOP bill "unworkable," and said it "would harm consumers who are most in need of coverage."
Ignoring these voices bears the risk of shuttering hundreds of rural hospitals, shredding the financial fabric of thousands of communities, and signing death certificates for people who could live longer lives.
Specifically, here's what some healthcare industry executives have told HealthLeaders Media recently:
Otis Brawley, MD
Chief Medical Officer
American Cancer Society
Atlanta, GA
ACS researchers have already published declines in health disparities in the diagnosis and treatment of several cancers in states that expanded Medicaid, with no change in states that have not expanded.
We see more breast, colon, and cervical cancer screening. There are signals of more accurate diagnostics and improved quality of treatment. We have also seen differences in smoking cessation, with more efforts and more success in states where Medicaid was expanded.
As a health-outcomes epidemiologist, I see provision of adequate care to include preventive services, such as smoking cessation, appropriate screening, diagnostics, and treatment as a human right. The declines in Medicaid are most concerning in that they will decrease preventive measures and early treatment.
Stuart Hill, MBA
Vice President and Treasurer
Unity Health
Searcy, AR
The Arkansas Hospital Association has estimated that one-third of those who obtained coverage will lose it. That will obviously increase our deductions and bad debts, and hinder the future delivery of healthcare services, particularly for the rural safety-net hospitals. [About a quarter-million Arkansas residents gained health coverage through Medicaid expansion.]
Herb Kuhn
President and CEO
Missouri Hospital Association
Jefferson City, MO
States like Missouri will be in a significant bind. Costs to care for the most expensive categories of Medicaid enrollees continue to rise, and the state is unlikely to have—or to generate—the revenue to absorb cuts to the federal share of the Medicaid partnership.
This is especially true in states like Missouri that rely on provider taxes to support their programs.
There is significant inequity built into the Senate's Better Care Reconciliation Act. The 19 states that did not expand Medicaid under the Affordable Care Act will forego $737 billion in net federal Medicaid outlays throughout a decade, compared to states that have opted to expand the program.
These states, including Missouri, have already fallen behind. Federal cuts will only exacerbate the inequity, creating have and have-not states.
Medicaid's largest enrollment category is children. It's most expensive category is the aged, blind, and disabled. The low-cost, high-value of investment in children's health is indisputable. The necessity of caring for the impoverished elderly and the disabled is equally undeniable. The discussion meets at the intersection of value and values.
In Missouri, one of the most vocal advocates for Medicaid expansion was the Missouri Chamber of Commerce and Industry. They recognized that a system that doesn't address the cost of the uninsured is a system that passes along costs and delivers poorer results.
Peter Wright, FACHE
President and CEO
Valley Regional Healthcare,
Claremont, NH
Over the years, the Centers for Medicare & Medicaid Services and Congress have toyed with 1% and 2% cuts here and there on physician payments or hospital payments for Medicare and Medicaid. These guys are talking about taking nearly $800 billion just out of Medicaid.
If this were to go through the way it is today, you would see loads of hospitals across the country start to go out of business.
We are the third largest employer in the county. We employ about 350 people, and we don't just employ people. Our average wage is higher—we are employing the higher-wage people in our community.
We're already filling a hole in our budget. It was $5 million a few years ago, it was $4 million last year, and it will be $3 million this year. We're starting to dig out, but we are starting to dig out because of the ACA.
They are cutting payments to Medicare and Medicaid. That means the cuts are going to disproportionately affect people in poorer communities and in older communities. This is not going to hit Nashua, New Hampshire, which has a low percentage of Medicaid patients. This is going to hit Plymouth. This is going to hit the North Country. This is going to hit the places in the state where the need for care is the most.
The waiver is designed to temporarily stop the collapse of the Obamacare insurance exchange, says CMS Administrator Seema Verma.
Federal officials have granted Alaska's request for a waiver of the Patient Protection and Affordable Care Act (PPACA) to establish a state-administered reinsurance program in the individual-insurance market.
On Tuesday, the Centers for Medicare & Medicaid Services announced that the agency and the U.S. Treasury Department had finalized approval of Alaska's request for a State Innovation Waiver for Section 1332 of the PPACA. Alaska officials applied for the 1332 Waiver on Jan. 3.
According to a CMS Fact Sheet released Tuesday, Alaska's 1332 Waiver exempts the state from a key PPACA provision: "the requirement to consider all enrollees in a market to be part of a single risk pool, to the extent it would otherwise require excluding total expected State reinsurance payments."
In a statement Tuesday, CMS Administrator Seema Verma said the 1332 Waiver establishing the state-run Alaska Reinsurance Program (ARP) is designed to stop the collapse of the Obamacare insurance exchange in The Land of the Midnight Sun. "Approval will temporarily stabilize Alaska's individual-insurance market, which only has one carrier and has experienced a 203% increase in insurance premiums since the Affordable Care Act began."
Alaska's waiver request met four essential criteria for approval, the CMS Fact Sheet says:
ARP is expected to ensure that healthcare coverage matches or exceeds coverage requirements under the PPACA
ARP is expected to maintain or increase affordability of coverage obtained through the PPACA insurance exchange
ARP offers "coverage to at least a comparable number of Alaska residents"
ARP will not increase the federal deficit
State officials and the Alaska Comprehensive Health Insurance Association (ACHIA) will administer ARP. The heart of the program is the state assuming risk to help pay for treatment of 33 high-cost medical conditions. "The ARP is a state-operated reinsurance program which covers claims in the individual market for individuals with one or more of 33 identified high-cost conditions to help stabilize premiums," the CMS Fact Sheet says.
In a letter sent to the country's governors in March, Tom Price, MD, secretary of the Department of Health and Human Services, encouraged states to consider filing 1332 Waivers. "State Innovation Waivers that implement high-risk pool/state-operated reinsurance programs may be an opportunity for states to lower premiums for consumers, improve market stability, and increase consumer choice," Price wrote.
Although the expected annual budget and costs associated with ARP were not released Tuesday, CMS has committed federal "pass through funding" to help finance Alaska's reinsurance payments. ARP's deficit-neutral funding mechanism hinges on the program driving down HIX premiums, which in turn would drive down federal subsidies for health plans purchased on the exchange.
"As a result of the waiver approval, more consumers in Alaska may have coverage, consumers will see lower premiums, and the State will receive federal funds to cover a substantial portion of State costs for the ARP," the CMS Fact Sheet says.
ARP is expected to reduce HIX premiums 20% next year, according to the fact sheet. Last year, CMS reported that Alaska residents purchased about 23,000 health plans on the Obamacare exchange, which is administered on the CMS-maintained enrollment platform, HealthCare.gov.
Alaska's 1332 Waiver is effective from Jan. 1, 2018, to Dec. 31, 2022.
For emergency-service patients, Medicare data shows that spending on care in the hospital-inpatient setting is relatively more cost-effective than spending on care in skilled nursing facilities.
For elderly patients who experience emergency medical episodes, hospitals that spend more money on inpatient care relative to post-acute care have lower mortality rates, research published in the Journal of Health Economics shows.
The study, "Uncovering Waste in U.S. Healthcare: Evidence from Ambulance Referral Patterns," examined average 90-day spending on more than 1.5 million Medicare patients over age 65. The research features two key findings:
Average 90-day spending was nearly $27,500 per patient, with every increase in spending of $8,500 resulting in a 2% reduction in mortality risk for the year following an emergency medical episode.
Patients treated at hospitals with relatively high spending on post-acute care, particularly skilled nursing facilities (SNFs), had a 5% increase in mortality risk.
"Patients who go to hospitals that rely more on skilled nursing facilities after discharge, as opposed to getting them healthy enough to return home, are substantially less likely to survive over the following year," Joseph J. Doyle Jr., PhD, a professor at the Massachusetts Institute of Technology and corresponding author the study, told MIT News this week.
The research is one of the best attempts so far to pinpoint wasteful U.S. healthcare spending, Doyle and his coauthors wrote. "Patients assigned to hospitals with high levels of inpatient spending are more likely to survive to one year, while high levels of outpatient spending result in lower survival. In particular, we discovered that downstream spending at skilled nursing facilities is a strong predictor of mortality."
MIT Professor Jonathan Gruber, PhD, and Vanderbilt University Assistant Professor John Graves, PhD, coauthored the study.
The researchers conclude that SNF utilization following treatment at an acute-care hospital should be added to the quality measures that the Centers for Medicare & Medicaid Services (CMS) use to base medical-service reimbursement on the quality of care.
"Our results highlight SNF admissions as a quality measure to complement the commonly used measure of hospital readmissions and suggest that in the search for waste in the U.S. healthcare, post-acute SNF care is a prime candidate," Doyle and his coauthors wrote.
"In a similar spirit to widely used readmission measures, SNF admission is expensive and we find it is a strong predictor of mortality. This suggests that SNF admission, or some combination of SNF and hospital admission, creates a stronger quality measure."
The research also has an intertwined pair of implications for bundled-payment reimbursement contracts involving acute-care hospitals, the researchers wrote:
There is a weak correlation between overall 90-day spending and patient outcomes, which implies bundled-payment contracts have the potential to reduce healthcare spending relative to fee-for-service contracts.
However, Medicare claims data indicates that inpatient spending is cost-effective, so bundled-payment contracts should be crafted in ways that do not penalize high-performing hospitals.
Doyle and his colleagues are among the research pioneers using Medicare ambulance-service claims data to compare spending and other performance measures at hospitals. A study he coauthored in 2015 that used ambulance-service claims data to examine the intensity of emergency-care treatment also found high-cost hospitals generate better patient outcomes.
Linking ambulance-service claims data with Medicare inpatient and outpatient claims data creates a powerful statistical tool, Doyle and the coauthors of this month's Journal of Health Economics study wrote. "Each community provides its own experiment, with ambulance companies delivering patients to hospitals with different treatment patterns. This enables us to compare patients assigned to hospitals with different combinations of treatment intensities."
Through an automated process, the Oklahoma-based health system is generating 20,000 pre-service estimates monthly for patient out-of-pocket costs, and banking higher point-of-service collections.
Pressure is mounting on healthcare providers to establish price transparency for medical services, with high-deductible health plans driving heightened consumer savvy among patients and Trump administration advocacy.
Boosting price transparency is one of the few specific healthcare reform proposals President Trump made during the 2016 election campaign, and his support ensures that efforts to achieve price transparency at healthcare providers will continue.
"Transparency in healthcare is not going away. It is not a flavor of the month," Amy Floria, CFO at Goshen Health in Indiana, told HealthLeaders earlier this year.
State efforts to advance healthcare-provider price and quality transparency have barely gained traction at the national level. Last summer, the vast majority of states received failing grades in a report card on transparency laws published by a pair of nonprofits—the Health Care Incentives Improvement Institute and Catalyst for Payment Reform.
Health systems and hospitals seeking to rise to the price-transparency challenge can look to the country's heartland, where Oklahoma City, OK-based INTEGRIS Health has developed robust price-transparency capabilities.
INTEGRIS, which is The Sooner State's largest health system with seven acute-care hospitals and a women's hospital, was the star of an educational session on price transparency at last summer's Healthcare Finance Management Association-ANI conference.
Greg Meyers, who was system vice president of revenue integrity at INTEGRIS until his retirement in December, said the health system's successful price-transparency journey began with setting a fundamental goal. "One of the objectives early on was to establish how much services would cost for the patient."
Over the past decade, INTEGRIS has perfected the generation of accurate out-of-pocket cost estimates for patients:
The health system began offering out-of-pocket charge estimates to patients in 2006 through the organization's "Consumer Priceline" program.
The program has expanded from 900 cost estimates per month conducted manually to about 20,000 estimates per month conducted through an automated process.
Point-of-service collections from patients have skyrocketed since INTEGRIS launched the health system's price-transparency initiative, rising from $900,000 in 2007 to $18 million in 2015.
"Our biggest measure of success is point-of-service collections. We're going to hit the $20 million mark," Meyer said.
At INTEGRIS, patient cost estimates are generated during the scheduling of medical procedures, which is an effective time to start engaging patients as financial partners, he said. "It's important for patients to understand their financial responsibility as soon as possible."
The ability to give patients accurate out-of-pocket cost information upfront has been a powerful market differentiator for INTEGRIS in recent years, Meyer said. "It's the value that we provide to the consumer more than the price."
Four of the state's 14 acute-care hospitals are participating in the new statewide accountable care organization, contracts have been cut with Medicaid and Medicare, and negotiations are underway with BlueCross BlueShield.
Six months after Vermont got federal approval to form an all-payer accountable care organization for more than three-quarters of The Green Mountain State's population, providers and payers have made the first steps in launching the ACO.
"We haven't arrived at the new payment models yet, but we are transforming," Judi Fox, CFO/vice president of finance and revenue cycle at Rutland Regional Medical Center (RRMC), said during her HFMA-ANI conference presentation this week in Orlando, FL.
The Vermont All-Payer ACO has "four steps to get us to risk," she said:
Step 1: Approval of the All-Payer ACO's Medicaid 1115 waiver by the Centers of Medicare & Medicaid Services (CMS) in November 2016
Step 2: The ACO has cut deals with two of its three primary payers—Medicaid and Medicare. Negotiations are underway with BlueCross BlueShield of Vermont. Together, these payers account for about 82% of the state's beneficiary lives. The population of Vermont is about 625,000.
Step 3: Hospitals take the lead in taking on risk in Vermont All-Payer ACO. In the first year of the initiative, which began in January, four of the state's 14 acute-care hospitals are actively participating in the ACO. The next ACO sign-up date for hospitals is Jan. 1, 2018.
Step 4: Setting and operationalizing strategies for success. RRMC is not participating in the All-Payer ACO this year, but the 133-bed facility is modeling what its performance could have been in the ACO, Fox said. "For us, there are a few pieces to the strategy. The first is negotiating a contract with the ACO, then ensuring our systems internally and with the care providers in our area are in place to make sure we can manage ACO care."
With hospitals bearing the most healthcare-provider risk in Vermont All-Payer ACO, RRMC is poorly positioned to participate in the initiative this year because the hospital does not employ primary care physicians, she said. "We need to enter into the risk with them. We can't do it without them. If primary care does not go in with us, we would only have about 1,000 lives, which is not big enough [to assume risk]."
Establishing contractual relationships with primary care physicians is a top goal at RRMC this year, Fox said.
Vermont All-Payer ACO is based on one of CMS' most advanced ACO models—Next Generation ACO. "It is built on the Next Generation ACO model, but we have slightly better financial pieces," she said.
Fox highlighted three provider "wins" from the All-Payer ACO so far:
Some relief from costs linked to prior-authorization: "This is a major win for us. The federal government said, 'You are at risk anyway.'"
$250 million in federal funding to support ACO infrastructure, including healthcare IT and bolstering of Vermont's existing patient-centered medical home program.
All-Payer ACO participation earns approval as an Alternation Payment Model (APM) under the Medicare Access and CHIP Reauthorization Act (MACRA), which comes with a 5% annual increase in Medicare reimbursement.
A half-dozen changes to the adjudication of Medicare claims-denial appeals are designed to ease a festering backlog of cases.
The new rules for Medicare claim-denial appeals feature several changes crafted to ease administrative burdens and speed reductions in a backlog nearing 1 million cases.
The new rules went into effect March 20. "This final rule streamlines administrative appeal processes, increases consistency in decision making across appeal levels, and improves efficiency for both appellants and adjudicators," a Department of Health and Human Services fact sheet on the new rules says.
Thursday afternoon, three officials at the Office of Medicare Hearings and Appeals (OMHA) led a presentation to walk healthcare providers through more than a dozen significant changes in the new rules. OMHA reports directly to Health & Human Services Secretary Tom Price, MD.
Disputed Medicare claims of more than $160 can be appealed to Administrative Law Judges (ALJs) and attorney adjudicators for reviews that can include a hearing. The last stop before federal court is the Medicare Appeals Council.
Thursday's Medicare Learning Network (MLN) presentation featured a half-dozen changes to the claims-denials appeals process at the ALJ-level that are designed to either quicken or streamline adjudication:
Attorney adjudicators are a new position at the ALJ level created this year to help clear the appeal backlog. "Attorney adjudicators are not authorized to conduct a hearing, which also means they cannot issue a decision in any case where a hearing is necessary," said Jason Green, JD, chief adviser at OMHA. "However, attorney adjudicators can issue decisions when a hearing is not required, including cases where the records support a fully favorable decision."
OMHA-100 form: This new form "is user-friendly and helps walk you through all the information required for a valid request for ALJ hearings," OMHA's Amanda Axeen, JD, said during the presentation. OMHA-100 can be used to request new hearings or review of appeal dismissals. The new form is not mandatory as long as previously required documents and information are filed.
Statistical Sampling Initiative: This new option for appeal adjudication "draws a random sample from a universe of claims and extrapolates—or projects—from the sample to the entire universe of claims," OMHA's Anne Lloyd said during the presentation. For example, she said a statistician could pick a sample of 30 claims out of a total of 1,000 for review in a ALJ hearing.
"A decision is made on those claims, and then the decision on those claims is extrapolated back to your 1,000-universe of claims that you started with," she said. Healthcare providers can't "cherry-pick" appeal cases to be included in the statistical sample, she added.
Party limit: "When multiple parties participated in the same hearing, the hearings not only took longer and were more challenging to coordinate, they also could become more adversarial," Axeen said. Under the new rules, if there are multiple entities that could be parties in an appeal, the first to file is the party of record for a hearing, with the remaining entities designated as non-party participants. However, an ALJ has discretion to allow any entity to be represented at a hearing.
Aggregating appeals: OMHA has tightened the rules for aggregating multiple appeals into one case. "In the past, appellants sometimes filed the request for hearing on one claim with the request to aggregate that claim with another claim in an appeal that had already been filed. Because of the logistics … and the appeals backlog at OMHA, this is administratively burdensome," Axeen said. Under the new rules, aggregation has to be requested at the same time appellants ask for a hearing in the claims they want to aggregate.
Dismissal authority: "An attorney adjudicator or ALJ may vacate the dismissal of a request for a hearing or a request for a review. Previously, appellants had to appeal any dismissal from the ALJ-level, which was time-consuming and inefficient," Green said.
Time or place of hearing objections: The new rules allow for "last-minute" hardships such as allowing oral rather than written notice of emergency circumstances the day of a hearing or the day before.
Healthcare providers are developing sophisticated strategies for engaging patients as financial partners.
As consumerism rises in the healthcare industry, ensuring patients know their financial responsibilities and helping them meet those obligations is becoming an essential capability at health systems and hospitals.
Health systems and hospitals must reach out early and often to help make sure patients pay for as much of their bills as possible, says Jane Berkebile.
She is the recently retired system vice president of revenue cycle for OhioHealth in Columbus. OhioHealth reported total operating revenue at $3.3 billion in fiscal year 2015.
"We're more likely to get paid if there is … at least an expectation that there is an out-of-pocket expense and we expect the patient to pay it."
Berkebile and Corey Meyer, director of strategic acceleration at Lancaster General Health in Pennsylvania, identify five elements to patient financial engagement.
1. Emphasizing Point of Service Collections
In 2015, OhioHealth posted $22 million in POS cash collections at the health system's dozen hospitals. In 2009, the figure was $9 million.
"We stress the need for communication with patients. We set targets. We track the dollars we collect," Berkebile says.
POS cash collection is a key focus for the training and education unit within OhioHealth's revenue cycle team. The training and education unit has about nine full-time staffers, and it provides instruction to revenue-cycle team members and employees outside the department who work with patients.
"It is critical that all of our physician practices know the policies for registration, point-of-service collection, and messaging to the patient."
2. Assessing Propensity of Patients to Pay
Many low-income patients benefit from the financial counseling services offered at OhioHealth, such as Medicaid enrollment facilitation.
In Ohio, the expansion of Medicaid under the Patient Protection and Affordable Care Act has been a boost for OhioHealth and the health system's low-income patients.
"That's a benefit to the patient," she says of the access to medical services that comes with Medicaid enrollment, adding that the health system's "charity care has been cut roughly in half" since Ohio expanded Medicaid to provide coverage to more low-income adults in January 2014.
3. Providing a Positive Financial Experience for Patients
Providers who fail to focus on the financial interactions with their patients do so at increasing risk, Meyer says. "In any other industry, a bad experience with the financial transaction will send the consumer looking for an alternative. Why would healthcare be any different?"
An August 2014 survey of 500 healthcare patients shows a clear link between billing experience and financial consequences, Meyer says. It found that 74% of patients who gave their billing experience a top score paid their bills in full, compared to a 33% payment rate for patients who were less than satisfied with their billing experience.
A positive billing experience also has a major impact on patient loyalty. For patients who gave their billing experience a top score, 95% reported they would return to the same hospital for another elective medical procedure.
For patients who were less than satisfied with their billing experience, only 58% said they would return.
"We are focusing on the entire financial experience from price estimation, to properly capturing insurance information, providing easy-to-understand bills, and offering multiple payment options including online payment and self-service payment plans," Meyer says.
4. Deploying Financial Advisers
OhioHealth employs dozens of financial advocates, with at least two at the health system's smallest hospitals and as many as 10 at the largest hospitals, Berkebile says. "We can really sit down with [patients] and help them understand the responsibility."
For non-elective inpatient cases, the financial advocates meet with patients as soon as possible following estimation of payer coverage and out-of-pocket costs.
Physicians are consulted to make sure patients are fit to hold a conversation. "We begin that dialogue, and we are standardized in our scripting and messaging. We keep asking for the copay and deductible until it gets paid," Berkebile says.
5. Streamlining Financial Processes for Patients
To help make elevated patient financial responsibility financially sustainable for healthcare providers, revenue cycle teams need to establish streamlined processes for patients to follow, Meyer says.
"We need make the financial experience simpler and less overwhelming for patients. Reducing surprises by explaining insurance benefits and options up front can reduce the sticker shock and can help engage patients in their care."
Mindset is a mammoth hurdle to clear as healthcare providers conduct financial conversations with patients, he says.
"Healthcare is something that no one really wants to buy. If I need a new couch or a new car, there is excitement in the purchase. Additionally, I will do some research on the item and the costs. With healthcare, it is not something that people want to spend money on or wade through cost information."
Building an expectation of patient financial responsibility can be delicate, but it is not an entirely foreign concept, Berkebile says. "It's getting patients to understand that healthcare costs money. When I take my cats to the vet, I have my checkbook out."
Bending the cost curve in healthcare requires not only developing new payment models but also using the same data-driven rigor that is applied to healthcare-provider finances to the clinical realm, Yale-New Haven Health cardiologist says.
Finance is the key to fixing what ails the healthcare industry.
"The status quo is increasingly untenable, and it is because of the finances," Harlan Krumholz, MD, director of the Yale-New Haven Hospital Center for Outcomes Research & Evaluation in Connecticut, said Monday at the HFMA-ANI conference in Orlando, FL.
"You can figure out how to make the numbers work," the cardiologist told an audience of well over 100 healthcare-finance executives.
"If the numbers don't work, nothing is going to happen. And with a sixth of the U.S. economy dependent on healthcare, how much perturbation do you think is possible without people getting in the street and saying, 'You are threatening my job. You are disrupting our local economies. You are putting our lives at risk.'"
Sound financial leadership in the healthcare industry is critically important for the national economy, he said. "The economy is intrinsically dependent on the success of the healthcare system. … There cannot be a rapid disruption in healthcare without ripple effects throughout the entire nation."
Ongoing increases in healthcare costs pose a clear and present danger to the national economy, the cardiologist and prolific healthcare researcher said. "The one fact that is undeniable is that the continuing rise in healthcare costs cannot be sustained over the long haul."
Adopting Financial Principles in Clinical Care
Fundamental principles of finance such as accountability and reliance on data for good decision-making must be applied in the clinical setting, Krumholz said.
"What is important is that the finance work does not get sequestered from the intrinsically important work in the healthcare system. For a long time in healthcare, only the finances were heavily quantified to determine whether an organization was making any money, so governing boards disproportionately worked on finances. In many places, finance became sequestered distant from the clinical enterprise. That is not going to work in the future."
As an example, the cardiologist cited research he had conducted on underutilization of beta blockers even after studies had shown the drugs to be very effective in the treatment of heart attacks.
"Every time cardiologists had given beta blockers late, they had missed an opportunity to reduce risk and to improve outcomes, and they were wasting money. … These were all good doctors who were trying to deliver the very best care, with no insight into how these opportunities were being missed. It would be like finance executives trying to do their job without spreadsheets."
To deliver valuable services to their patients, clinicians need to establish the same level of mastery over data and setting best practices as healthcare-provider finance teams have established, he said.
"Measuring performance and setting standards in clinical areas should not be that much harder than measuring performance and setting standards for finances at hospitals and health systems. … Imagine working without spreadsheets and somebody asks, 'How are you doing? How is the balance sheet?' And you say, 'I can't tell you, but we're working our *** off.'"
With more and more patients struggling financially to pay the high out-of-pocket costs associated with high-deductible health plans, clinicians need to consider the financial consequences of care decisions, Krumholz said.
Medicare's reimbursement system for physicians is emerging as a major driver of change in the healthcare industry.
The long journey to establish value-based healthcare business models has taken a giant leap forward this year.
The rollout of the Medicare Access and CHIP Reauthorization Act (MACRA), which is linking an ever-increasing share of physician payments for outpatient care to service-value rather than service-volume, is a game changer, according to the presenters of a workshop Sunday at the HFMA-ANI conference in Orlando, FL.
"The turning tide is largely driven by MACRA. It has changed healthcare significantly in terms of moving the mindset toward more value-based reimbursement," said Max Reiboldt, CPA, president and CEO of Coker Group, a healthcare consultancy based in Alpharetta, GA.
While there is considerable uncertainty over the ultimate fate of the Patient Protection and Affordable Care Act, MACRA is an example of how value-based healthcare appears destined to advance, he said.
"It has been a long, drawn-out process from March 2010, when President Obama signed the Affordable Care Act, to today. But regardless of what happens to the ACA or how the ACA changes, the concepts involved in shifting to value-based reimbursement are not going to change. MACRA illustrates the point. No one is talking about repealing MACRA."
Medicare's physician reimbursement model, which launched with performance reporting this year and is slated for full implementation in 2019, is making the shift from volume to value a real business condition in the healthcare industry, Reiboldt said.
"Everybody is now in a value-based reimbursement setting, and the reason for that is MACRA. We are all subject to MACRA."
MACRA Success Strategy: MIPS versus APMs
There are two physician-reimbursement tracks under MACRA:
In the near-term, most clinicians will be paid through the Merit-based Incentive Payment System (MIPS), which features data reporting in four performance categories that drive payment bonus and penalty mechanisms.
Clinicians participating in MACRA-approved alternative payment models (APMs) such as Medicare's Next Generation ACO can earn 5% payment bonuses.
For most healthcare organizations, MIPS is a more attractive option because it takes a blended approach to physician reimbursement based on both volume and value, said Justin Chamblee, CPA, senior vice president at Coker Group.
"It is still very much a volume-based reimbursement methodology, but it is volume-based with strings attached. It's not just how much you do, but also how well you do what you do."
From the perspective of physician financial success, the key to MIPS is a highly structured approach to balancing volume of services with quality of services, said workshop presenter William Strimel, DO, president of Mercy Physician Network, Mercy Health System in Philadelphia. MHS is an affiliate of Livonia, MI-based Trinity Health. "You need to have a robust system in place to manage quality."
Participating in an APM is potentially more lucrative for physicians. However, operating under APM contracts, which feature both significant upside and downside risk, poses more daunting challenges than MIPS, Chamblee said.
"Under an APM, Medicare is saying they will give physicians an annual 5% uptick in reimbursement for at least a few years. So, clearly there is an incentive to be in an APM, but an APM takes a lot more work. You have to be in the Medicare Shared Savings Program or some sort of innovation model to qualify for APM reimbursement."
Long-term strategy should be a prime consideration for healthcare organizations that are struggling with the decision to embrace MIPS or APMs, Strimel said. "Mercy is looking to get to full risk. So, if we are going to get to full risk, then we need to perform well in an APM. We need to build the infrastructure."
Do you lead a post-acute care facility? A $1,000 honorarium offer to help revolutionize the gathering and dissemination of your patients' medical information could come today.
Implementation of a federal law passed in 2014 to standardize patient-assessment data in post-acute care facilities has reached a key milestone, with national testing of the new data-collection methods set to begin in the fall.
The primary goals of the Improving Medicare Post Acute Care Transformation Act (IMPACT Act) of 2014 include enabling comparisons of quality across different post-acute care settings, boosting the exchange of information across post-acute care settings, and improving care coordination.
The Centers for Medicare & Medicaid Services is implementing the IMPACT Act, with the Rand Corporation serving as the initiative's primary contractor.
On June 20, CMS officials and Rand executives led a conference call update on the initiative for post-acute care providers, featuring information on the "Alpha 1" and "Alpha 2" early rounds of data-collection testing as well as plans to launch a national "Beta" testing effort in November.
The top objective of the IMPACT Act is to create a core set of standardized data at home health agencies, inpatient rehabilitation facilities, long-term care hospitals (LTCHs), and skilled nursing facilities, a Rand executive said during Tuesday's conference call.
Currently, these post-acute care providers each use their own patient-assessment methodology such as the LTCH Continuity Assessment Record and Evaluation (CARE) Data Set.
Based on an information-gathering effort Rand conducted in 2015 and 2016—including literature reviews, expert focus groups and consultations with CMS—Rand targeted five categories of patient-assessment data for standardization:
Function such as self-care ability and mobility levels
Cognitive function such as the presence of depression or dementia
Special services and treatments such as the need for a ventilator or dialysis
Medical conditions and co-morbidities such as diabetes and heart failure
Impairments such as incontinence or difficulty swallowing
The national testing set to start in November, which is designed to examine the reliability and validity of the data elements proposed for standardization, is slated to last six months. Fielding testing of patient assessments using the new standardized methodology will be conducted on computer tablets, with no requirement to enter the patient assessments in a post-acute care facility's electronic health record.
Participation in the national testing is voluntary.
CMS and Rand are seeking 210 organizations to participate in the national testing in 14 metropolitan areas:
Boston, MA
Harrisburg, PA
Philadelphia, PA
Fort Lauderdale, FL
Durham, NC
Chicago, IL
Nashville, TN
Kansas City, MO
St. Louis, MO
Dallas, TX
Houston, TX
Phoenix, AZ
Los Angeles, CA
San Diego, CA
Recruitment for national testing participants has begun through a phone-outreach campaign. This week's update conference call highlighted several incentives for post-acute care providers to participate in the testing:
Training and experience with the patient-assessment data collection methodology that could be mandated under the IMPACT Act
Opportunity to give "on-the-ground input" to CMS
Honorarium of $1,000
Internal and external publicity to show an organization's commitment to quality and innovation
Networking with peer organizations
Rand is expected to submit formal recommendations to CMS by the fall of 2018.