Healthcare

One of the first words that come to mind when I think of medical care is hygiene. Let’s face it, poor hygiene practices in a healthcare provider’s facilities can cause major issues and possible loss of life. Consumers of healthcare services, trust that their provider is taking every precaution possible to protect them from disease or infections that can occur if proper hygiene is not practiced. 

Last week’s sudden pull of the American Health Care Act from House vote caused uncertainty around what’s next for the healthcare industry. This week, the AHLA Institute on Medicare and Medicaid Payment Issues, brought together key representatives from CMS, hospital associations and healthcare lawyers from around the nation. Here are three Medicare/Medicaid insights on current and upcoming issues:

As discussed frequently in compliance and health care conferences and forums and on this page, fair market value (FMV) of payments to referring physicians is an essential compliance requirement of the Stark law and federal anti-kickback statute. Physician compensation in excess of FMV is at the crux of much health care enforcement activity. As noted by Richard Kusserow, former Inspector General, “Arrangements with physicians are the highest compliance risk area in 2017” (“Kickback Cases Remain Top DOJ and OIG Priority in 2017,” Strategic Management Services, LLC; Jan. 2017). Mr. Kusserow further explained that whistleblowers are a significant source of enforcement activity.

Consider a small U.S. town that doesn't have local access to a cardiologist. The community can't support one on a full-time basis, so the hospital brings in a cardiologist twice a month. The physician pays to use the hospital's facilities, equipment, support staff and nurses during those two days. Patients are able to access the specialized care they need without having to travel, and the physician pays only for the space and support that he or she needs.

Last week House Republicans gave us a first glimpse of what they mean by “repeal and replace” of the Affordable Care Act (ACA). 

Lack of unity in the GOP and opposition from leading healthcare industry groups means the American Health Care Act (AHCA) faces significant hurdles and likely changes as it works its way through congressional committees and the budget reconciliation process. However, we can glean a few insights into how the final legislation might impact healthcare providers.

A long time ago (the mid-90’s), there was a television series titled Highlander. It was a sci-fi action series whose main character, Duncan MacLeod, hailed from a race of immortals. The opening voice-over would end with the proclamation, “There can be only one!” You see, these immortals sought each other out until it was the “last man standing.” Duncan was a force for good that battled other immortals of darkness. Each episode featured an epic battle that ended with Duncan annihilating his immortal foe, whose power transferred to Duncan.

Many physicians are subject to participation in the new Merit-Based Incentive Payment System (MIPS) through CMS’s ongoing payment model reform initiatives encouraging providers to deliver better healthcare at lower costs.

CMS is just the tip of the spear. Commercial payers are developing their own pay-for-performance contracts as they slowly transition away from fee-for-service reimbursement. Yet many independent practice physicians and even employed physicians lack a strong strategy to participate in a healthcare environment where the Triple Aim is the ultimate mission.

For the 1^st time ever, HIMSS (the annual meeting place for all things health IT) and ACLC (Accountable Care Learning Collaborative) held a joint conference, in Orlando, Florida.  Suffice it to say it was a HUGE (no pun intended, Mr. President) event with over 40,000 (yes, 40K) attendees and 1,200+ exhibiting companies. 

The main topic—transforming healthcare. 

The most astute executives in health systems are rightfully concerned about compliance risks in physician contracting. Among these risks are that a transaction or an arrangement between a hospital and a physician are consistent with fair market value (FMV) and are commercially reasonable (CR) as those terms are defined in the healthcare regulatory context.

Participation in value-based programs is on the rise. Growth of ACOs is up 11%, and CMS estimates that 30% of Medicare payments are currently flowing through alternative payment models (APM). This milestone was reached 11 months ahead of schedule according to the Department of Health and Human Services (HHS), which expects Medicare payments flowing through APMs to reach 50% by the end of 2018.

Welcome to MACRA—the Medicare Access and CHIP Reauthorization Act. MACRA represents the end of a long history of perpetually delayed Medicare physician fee schedule cuts that were to be automatically triggered under the punitive SGR formula absent Congress’ annual postponement ritual. After providing for a series of annual physician payment increases, MACRA’s reimbursement methodology transitions to a value-based model that includes two pathways—the Alternative Payment Model (“APM”) and the Merit-Based Incentive Payment System (“MIPS”).

Rural hospitals have some tough decisions to make about their level of participation in the new CMS Quality Payment Program created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). 

For a number of reasons, the MACRA cards are stacked against small and rural providers. Given the limited number of Advanced Alternative Payment Models (APMs) that are being approved, many providers will start out in the Merit-Based Incentive Payment System (MIPS), and that track offers limited upside potential compared with APMs.

During AHLA’s Physicians and Hospitals Law Institute this week, we saw three recurring themes as sessions focused on issues affecting the industry.