5 Most Recent Changes in the US Healthcare and How do They Impact

Abhinav Shashank
Tue 17 July 2018

“Iron rusts from disuse, stagnant water loses its purity and in cold weather becomes frozen; even so does inaction sap the vigors of the mind.” — Leonardo da Vinci

Healthcare is nothing different. It needs to drift from the outline on which it was formulated. CMS and various other federal agencies keeps on trying to develop strategies to ensure better engagement of providers, payers, healthcare organizations, and patients in the constantly changing healthcare ecosystem.

Last few weeks witnessed some major shifts in healthcare organizations, disrupting nearly every domain. Here are a few of them that caught everyone’s attention:

1 ) Freezing $10.4 Bn in risk-adjustment payments to payers

Owing to the recent ruling in the US District Court of New Mexico, CMS temporarily withheld risk-adjusted payments to payers while it continues to resolve the litigation.

Planned changes

How does it impact

  • The calculated adjustment transfer amounts for PY 2017 are $10.4 Bn, including catastrophic, individual non-catastrophic, or small groups of risk pools.
  • The individual health plan market will lose ~$7 Bn in risk-adjusted payments.
  • Small group health plans will lose ~$2 Bn in total risk-adjusted payments.
  • Catastrophic and merged market plans will lose ~$23 Mn and ~$4 Mn respectively.

2 ) Modernizing home health

CMS proposed significant changes to the Home Health Prospective Payment System to strengthen and modernize Medicare. Their aim is to enhance access to the solutions, and further update the payment model for home health care.

Planned changes

  • CMS allowed the reporting of the cost of remote patient monitoring as allowable costs on the Medicare cost report form.
  • As required by the Bipartisan Budget Act of 2018, the rule would implement a new Patient-driven Groupings Model (PDGM) for home health payments.
  • CMS allowed the implementation of home infusion therapy temporary transitional payments.
  • The policy for removing previously adopted HH QRP measures will be replaced with 8 measure removal factors.

How does it impact

  • Changes to HH QRP are estimated to generate $60 Mn in annualized cost savings to HHAs, beginning in CY 2020.
  • PDGM would eliminate the use of “therapy thresholds” in determining payment and would change the payment unit to 30-days from the 60-days period of care.
  • The improved structure would promote a more value-based payment system under Medicare.

3 ) Reviving Medicare to restore the doctor-patient relationship

CMS will be updating payment rates, policies, and quality provisions for services provided under the Medicare Physician Fee Schedule (PFS).

Planned changes

  • CMS is planning to bring down the number of quality measures in the Medicare Shared Savings Program from 31 to 24.
  • Several coding and payment changes in the documentation, medical decision-making process, and many more are put forth by CMS.
  • New, single blended payment rates will be introduced for new and established patients for office/outpatient E/M level 2.
  • CMS announced the guidelines update requiring hospitals to make a public list of their standard charges via the internet.

How does it impact

  • Physician-patient relationship will be improved by empowering physicians to document only clinically relevant information into EHRs.
  • Changes in the QPP proposal would collectively save physicians ~29,305 hours and ~$2.6 Mn by lowering administrative costs.
  • Changes to PFS would empower CMS’ ‘Patients Over Paperwork’ initiative focused on reducing administrative burden.
  • Documentation requirements for Evaluation and Management (E&M) office visits will be streamlined.

4 ) Driving innovations in End Stage Renal Disease Programs

CMS is looking forward to updating the payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System. The rule will modify the acute kidney injury (AKI) dialysis payment rate for renal dialysis.

Planned changes

  • CY 2019 ESRD PPS base rate will be increased by $3.45 from the previous rate of $232.37 to $235.82.
  • The outlier services fixed-dollar loss amounts for adult and pediatric patients, and Medicare Allowable Payment amounts for adult patients will be updates using 2017 claims data.
  • Four reporting measures from the PY 2021 ESRD QIP’s measure set namely Anemia Management, Serum Phosphorus, Pain Assessment and Follow-up, and Healthcare Personnel Influenza Vaccination will be removed from the list.
  • Patient & Family Engagement, Care Coordination, Clinical Care, and Safety will be included as quality domains responsible for finalizing ESRD QIP score.

How does it impact

  • Modifications in DME aim to increase access to items for patients and simplify Medicare’s DMEPOS Competitive Bidding Program to increase affordability.
  • CY 2019 updates are expected to increase the total payments to all ESRD facilities by 1.7% compared with CY 2018.
  • These changes will promote physicians to spend less time on paperwork and more time with patients.
  • Access to new renal dialysis drugs will be improved and will encourage innovation in the critical area of healthcare.

5 ) Strengthening Medicaid Program integrity

CMS announced new and enhanced initiatives to improve the Medicaid program integrity through enhanced transparency, accountability, strengthened data, and innovative and robust analytic tools by promoting the role of CMS in the program.

Planned changes

  • CMS has announced the following new initiatives:
    • Emphasizing program integrity in state claims audits for federal match funds and medical loss ratios (MLRs).
    • Conducting new audits of state beneficiary eligibility determinants.
    • Optimizing state-provided claims and provider data.
  • CMS announced the removal of authorization of a state to divert a part of the Medicaid payments to third parties to fund other costs on behalf of the provider in a separate release.

How does it impact

  • New initiatives will improve the audit functions, increase beneficiary eligibility oversight, and ensure strict compliance with federal rules.
  • Current regulations will allow CMS to start issuing potential disallowances for states based on PERM program findings in 2022.
  • The rule is aimed to ensure that providers receive their complete payment, and any situation in which a state diverts part of provider’s payment must be clearly allowed under the law.

Moving forward with the changing ecosystem

Whether or not these regulations will change the future, it is certain that they are changing the present of the US healthcare. These changes are not just specific to a single domain, but are disrupting the overall ecosystem. Adapting to these changes is the only key to succeed in the domain, and to succeed one needs to understand its complexities. Rest everything will follow just the same!


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