2017 Summer Policy Recap…in More Than 140 Characters

Seemingly every week, health care policy is in crisis mode. Last week, health system leaders may have found themselves recovering from policy whiplash, as CMS abruptly proposed to cancel mandatory bundled payment models—just 3 months after finalizing a delayed start date. This week, 716 policy articles are sitting in my RSS feed…and it feels like a light reading week.

To help cut through this policy noise, Sg2 hosted a live session with payment and policy experts on August 3rd. Highlighted below are a few of the questions and answers on key topics in case you missed it.

Q: What is the fate of the Patient Protection and Affordable Care Act (ACA)?
It has survived…for now. In the wee hours of July 28th, the Senate voted 51 to 49 against the Health Care Freedom Act—better known as the “Skinny Repeal.” In the aftermath of this vote, ACA repeal may fall to the wayside as other policy agenda items compete for legislative time and political capital.

However, this is not the end of the ACA debate. The GOP still retains majority control of both chambers in Congress. Moreover, in the near-term, the Trump administration will be the wild card. Key areas to follow are:

  • Public Exchange Markets as insurers attempt to decipher mixed signals to determine whether the administration truly prefers to “let ObamaCare implode, then deal” or will support structural improvements.
  • Medicaid Waivers as states prod the boundaries of what the administration will permit under state-level Medicaid reform.

It has never been more important to be in touch with your state officials and your local payers. States and payers are navigating through this uncertainty without “tried-and-true” solutions. This is an opportunity to find a path forward together. Don’t passively wait for changes to come down the pipeline.

Q: Will Medicare start paying for hip and knee replacements in outpatient settings?
Almost certainly, yes. The change may not happen at once, however, and it may be initially limited to hospital outpatient departments (HOPDs). CMS has proposed removing total knee replacement from the inpatient-only list and starting to reimburse it in the HOPD setting in 2018. Total knee replacement may just be the first round of changes: CMS is also considering removing partial and total hip replacement from the inpatient-only list. Following years of discussion and speculation, CMS appears to be moving toward outpatient total joint replacement for Medicare patients.

Perhaps more importantly, CMS is seeking comment as it considers reimbursement for knee and hip joint replacement in the ambulatory surgery center (ASC) setting. While this has not been proposed for 2018, this would be a pivotal moment for the outpatient joint replacement landscape. While the shift to HOPDs lowers topline revenue, hospitals may find themselves cut out completely in the shift to ASCs, as they face stiff competition from outpatient surgery companies and independent orthopedic surgeons. Read the Sg2 FAQ: Preparing for Outpatient Joint Replacement for strategies to prepare for this site-of-care shift.

Q: What is the latest for HOPD site-neutral payment?
Site-neutral payment provisions under the Bipartisan Budget Act of 2015 direct CMS to equalize payment for off-campus HOPDs with non-HOPDs. CMS has interpreted these provisions to mean that off-campus HOPD payment rates will be equal to those for outpatient clinics. Due to technical difficulties in implementing this change, CMS had decided to reduce facility payment rates by 50% for CY 2017. For CY 2018, CMS proposed reducing payments further, and affected HOPDs would receive 25% of Outpatient Prospective Payment System (OPPS) payment rates. To put this in perspective, Table 1 summarizes the CY 2018 proposed payment rates for screening colonoscopy.

HOPD site-neutral payment marks the first major shift toward site-neutral payment for Medicare. The biggest challenge for health system leaders under this payment change will be to rethink strategies to address gaps in their System of CARE. To learn more, read the Sg2 Expert Insight: How Will Site-Neutral Payment for HOPDs Affect Your System of CARE?

Q: Does MACRA still matter?
Absolutely. Among Sg2 members, we have seen a wide range of preparedness in the midst of the first performance year for Medicare Access and CHIP Reauthorization Act’s (MACRA’s) Merit-based Incentive Payment System (MIPS). The good news is that CMS greatly eased the path to avoid negative payment adjustments under MIPS for 2017, and the CY 2018 proposed rule continues to prioritize ease of participation over driving cost reduction. That said, MACRA flattens future payment updates for clinicians. Simply avoiding negative adjustments will not keep up with inflation. The only way for clinicians to increase payments will be through exceptional performance under MIPS or by qualifying for the 5% bonus through participation in advanced Alternative Payment Models.

Strategy leaders are essential to creating a MACRA plan that is about more than just surviving the early years of the new payment program. To learn more, reach out to to discuss ways we can help you prepare.

SourcesCMS. Fed Regist. 2017;82:19796–20231; CMS. Fed Regist. 2017;82:33558–33724; CMS. Fed Regist. 2017;82:33950–34203; Parlapiano A et al. How each senator voted on Obamacare repeal proposals. The New York Times. Updated July 28, 2017; CMS. Fed Regist. 2017;82:30010–30500; Donald Trump @realDonaldTrump. 11:25 pm, July 27, 2017 tweet. Twitter; Sg2 Analysis, 2017.

  • Share
  • Follow Sg2 on Twitter
  • Connect with Sg2 on LinkedIn