Healthcare

The Department of Health and Human Services recently released the Transparency in Coverage proposed rule. It is a response to President Trump’s executive order to “Improve Pricing and Quality Transparency in American Healthcare.” It comes with significant implications for insurers, providers, consumers, and government agencies. The purpose behind it is to lower healthcare spending and increase quality by creating real-time, user-friendly data on pricing and healthcare service rates.

Legislative support is growing for the reimbursement of care delivery via telemedicine. The Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) have recently made final and proposed rule changes to stimulate greater use and access for telemedicine delivery. These changes mean that for healthcare providers all around the United States, telemedicine will become a greater strategic focus.

A final rule updating the physician fee schedule rates was issued by The Centers for Medicare and Medicaid Services (CMS) this month. The new regulation, which increases the 2019 conversion factor of $36.04 to $36.09 in 2020, will be published in the Federal Register on November 15, 2019.

The specialty pharmacy marketplace in the US has experienced rapid growth in recent years. The number of specialty pharmacies operating in the US has more than doubled since 2015. US expenditures for specialty drugs have also nearly doubled from $83 billion in 2013 to $157 billion in 2017. Combined with spending on orphan drugs, total US expenditures on specialty pharmaceuticals is now nearly equal the amount spent on traditional medications.^[1],[2]

Last week, the Department of Health and Human Services (HHS) and the Center for Medicare and Medicaid (CMS) revealed proposed changes to “modernize” and clarify regulations that interpret the Physician Self-Referral Regulations (Stark Law) and the Federal Anti-Kickback Statute. The Proposed Rule immediately highlights a focus on the transition to a value-driven healthcare system, which is in-line with the OIG’s priorities. 

When considering Stark Law exceptions for vetting financial arrangements with physicians, we often witness a tendency to focus primarily on Fair Market Value (FMV). This is rightly so, as ensuring physician contracts comply with FMV is a critical part of risk management.

For those seeking valuation or appraisal services, the varying levels of services offered can often be confusing to navigate. Appraisers/valuators offer many different services to meet the needs of a diverse client base. Confusion in the process of selection can lead clients to select a service based solely on price, only later to discover, as with many things in life, you get what you pay for. 

An accountable care organization (“ACO”) is a healthcare delivery entity characterized by a payment model that facilitates coordination among providers — charged with the care of a specified patient population.

Participation in an ACO is voluntary, and participants must be willing to become accountable for the quality, cost, and overall care of the specified population. Commonly, ACOs receive capitated payments based on the size of the patient population served, though other reimbursement models exist. ACO participants are financially incentivized to lower healthcare costs while improving quality as they share in a portion of the excess between total capitated payments and total healthcare costs.

Determining fair market value (FMV) compensation in a healthcare setting generally requires the use of multiple, objective data points and an understanding of how to apply that information given the unique facts and circumstances of the subject arrangement relative to the overall market.

Understanding what the government considers as support for FMV, and what it does not, is critical to selecting and enacting policies and procedures for establishing FMV physician compensation.

There are two things I know will happen at the beginning of August: Football is about to begin and the newest updates on the next fiscal year payment system will soon be released. Last Friday, the Federal Fiscal Year (FFY) 2020 Inpatient Prospective Payment System (IPPS) Final Rule was released. This quickly changed my weekend plans as I delved into the details to fully understand what changes the Centers for Medicare and Medicaid Services (CMS) would implement for FFY 2020. I’m just glad it was before football season started.

Compliance is a fact of life for hospitals and health systems, and it’s only getting more complex. But what if I told you that by coordinating the time and effort spent on accounting, tax and reimbursement rules, you could leverage that effort to maximize reimbursements and minimize audit exposure?

Here’s a cautionary tale: It’s early 2020 and Joe the CFO is sitting down with his hospital’s board of directors and independent auditors. Next up on the agenda: Presentation of the 2019 audited financial statements.