Finerfrock - Healthcare Business Management AssociationDonald Trump’s Healthcare Reform ideas • Completely repeal Obamacare and start over. Eliminate the individual mandate. No

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HBMA 2016: The Revenue Cycle Conference

September 21 – 23, 2016 – Omni Atlanta Resort, Atlanta, GA

HBMA 2016: T H E H EALT H CAR E R EVENU E C YCL E C O NF ER ENC E

Washington Update

Bill Finerfrock

President

Capitol Associates, Inc.

202-544-1880

[email protected]



Congratulations!

I cannot think of a better time to be a

healthcare business management partner!

We are about to embark on the most comprehensive – and complex – changes to

how we pay physicians in more than 3 decades!



What we will cover

• The Changing healthcare landscape and how government is promoting or retarding that change.

• The impact of the upcoming election on the direction of health policy in this country.

• We will also discuss proposed changes in Medicare payments to include standards for receiving incentive payment or negative adjustments under the new MIPS initiative.

• When will MIPS data reporting begin and when will it begin to impact payments. We will also cover criteria for approval of Alternative Payment Models.

• We will discuss the latest tools payers will be employing to verify that services are “medically necessary”.

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Mergers and acquisitions have dominated the healthcare news over the past several months. Insurers are merging, health systems are merging and hospitals are buying physician practices at record rates.

In the 1990s, there was a large surge of hospitals buying up practices and employing doctors, but the results were not what hospitals expected and many hospitals ended up losing a lot of money before realizing it wasn’t a good idea and getting out of this business.

Is this any different? Will the outcome be the same?

The Healthcare Landscape is Changing



Maybe not…

Fitch Ratings predicts that hospital systems will begin moving toward different types of collaborative relationships with physicians rather than purchasing and employing physicians, as employing physicians has proven to be expensive, and the volume hasn’t been what they initially anticipated.




Government Response

Over the past year, the federal government has begun to challenge national and regional mergers as being anti-competitive.

Aetna – HumanaAnthem – Cigna

Advocate Health System/North Shore University Health System

St. Luke's Health System/Saltzer Medical Group

Cabell Huntington Hospital/St. Mary’s Medical Center

Penn State Hershey Medical Center/Pinnacle Health System

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Government Response

In November, 2015, President Obama signed into law a bill that would PROHIBIT hospitals from billing for “NEW” off-campus outpatient services using the HOPPS payment methodology. This was in response to widespread purchasing of physician offices by hospitals and converting them to hospital outpatient departments.

Instead, beginning on January 1, 2017, these new off-campus facilities will have to bill fee-for-service (either physician fee schedule or ambulatory surgical methodology).

A “new” facility is any facility that was not billing Medicare for services as of the date of enactment – November 2, 2015.



With Change comes Opportunity

Are hospitals prepared, capable or efficient at doing physician office billing or will they be seeking a business partner?

What “different types of collaborative relationships with physicians” will evolve and could out-sourced RCM be a part of that new relationship?



HBMA 2016: T H E H EALT H CAR E R EVENU E C YCL E C O NF ER ENC E

Elections are Coming,

Elections are Coming

What does this mean for Health Policy in Washington, DC?

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Hillary or Donald?

Donald or Hillary?

Will it make a difference?



What are the political and policy

differences distinguishing the

major Presidential candidates?



Healthcare – Clinton Style (aka Obamacare Lite)

• Retain the core components of the Affordable Care Act

Individual Mandate

No denial due to pre-existing condition

• Make some changes to try to lower beneficiary out-of-pocket costs.

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• Provide enhanced relief for people on the exchanges, and provide a tax credit of up to $5,000 per family to offset a portion of excessive out-of-pocket and premium costs above 5% of their income.

• Create a "public-option insurance plan" under Obamacare.



• Lower Medicare eligibility age. Allow Americans at the age of 55 to buy into Medicare.

• Address rising prescription drug prices and hold drug companies accountable (undefined).

• Double funding for primary care services at medical clinics that primarily serve low-income communities (i.e. Federally Qualified Health Centers).



Donald Trump’s Healthcare Reform ideas

• Completely repeal Obamacare and start over. Eliminate the individual

mandate. No person should be required to buy insurance unless he or she wants to.

• Modify existing law that inhibits the sale of health insurance across state lines.

As long as the plan complies with at least one state’s requirements, any vendor ought to be able to offer insurance in any state.

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• Allow individuals to fully deduct health insurance premium payments from their

tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions?

• As we allow the free market to provide insurance coverage opportunities to

companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance.



• Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs

should be tax-free and should be allowed to accumulate. These funds can be used by any member of a family without penalty. The flexibility and security provided

by HSAs will be of great benefit to all who participate.

• Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to

shop to find the best prices for procedures, exams or any other medical-related procedure.



• Block-grant Medicaid to the states. Nearly every state already offers benefits

beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better

without federal overhead.

• Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Allowing consumers access to imported, safe and

dependable drugs from overseas will bring more options to consumers.

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Clinton Vs. Trump

Can these policies be significantly impacted by

who controls Congress and the White House?



What are the chances the ACA will be repealed,

modified or changed significantly depends on

who is in power, not just in the White House but Congress as well, in 2017?



President Clinton

House Controlled by Democrats

Senate Controlled by Democrats

No chance the ACA is repealed. High likelihood it is modified to address some of the concerns.

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President Trump

House Controlled by Republicans

Senate Controlled by Republicans

Depends on size of GOP majority in Senate. If less than super majority (highly unlikely) then there is little chance ACA would be completed repealed. Narrow majority GOP Congress could use process known as “reconciliation” to repeal financial components (i.e. individual mandate penalties). However, even a small majority may lead to some revisions.



Trump or Clinton

Majority is opposite party or majority is split.

No chance for ACA repeal. Some possibility of changes to basic policy.



We cannot completely discount the potential impact of the election on the policy making process, in particular the rulemaking process.

Remember, when President Obama came into office he put a one-year Moratorium on all pending regulations proposed by the Bush Administration.

It is not inconceivable that the next President – regardless of who he or she may be – would do the same.

Are there policies that will move forward regardless of the outcome of the Presidential and Congressional elections?

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MACRA

In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) which repealed the much maligned SGR formula and replaced it with two initiatives:

1. The Medicare Incentive Payment System (MIPS)

2. Alternative Payment Models



MIPS

Beginning in 2019, in lieu of automatic payment adjustments based upon medical inflation and productivity, Physician, PAs, NPs and certain other “Eligible Clinicians” will have fee schedule payment adjusted based upon their MIPS score.

An individual clinicians MIPS score will be a composite score based upon…



2019 or 2017?

There has been some confusion. Although the payment adjustments do not begin until 2019, the data that will be used to determine the payment adjustments will be reported in 2017.

The MACRA law stipulates that reporting shall begin in 2017 but DOES NOT stipulate when or how long the reporting must occur in 2017.

Many organizations, including HBMA have recommended that CMS delay actionable reporting until either Q3 or Q4 of 2017 to give additional time to prepare – and test – the reporting mechanisms.

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Composite Score (2019)

Eligible Clinicians can achieve a score of 100 points

• Quality (50%)

• Resource Use (10%)

• Clinical Performance Improvement Activities (15%)

• Advancing Care Information Performance Category (25%)



MIPS Scoring

Individual ECs will be compared against all other ECs and based upon their ranking, will receive an UP or DOWN payment adjustment.

For 2019, the maximum adjustment (UP or Down) will be 4%

This is NO LONGER pay for reporting. HOW you compare will determine a clinician’s update – up or down.



MIPS Payment Adjustments by year

Program Performance Year Medicare Part B

Payment Adjustment

Year

Maximum -%

Medicare Part B

Payment Adjustment

PQRS/VBM 2016 2018 -4% penalty

MIPS 2017 2019 -4% penalty




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MIPS Adjustments

The program is “revenue neutral” meaning that

the money available to pay for the upward adjustment will come from the money recouped

from those “low scoring” Eligible Clinicians

subject to negative payment adjustments.

NO automatic adjustments from 2019 - 2024



How much are we talking about?

Eligible

Clinicians

Physician Fee

Schedule Allowed

Charges

Eligible

Clinicians

with

Negative

Payment

Adjustment

Eligible

Clinicians with

Positive

Payment

Adjustment

Eligible

Clinicians

with NO

Payment

Adjustment

Aggregate

Impact

Negative

Payment

Adjustments

Aggregate

Impact Positive

Adjustments

761,342 $72,606,000,000 346,675 412,140 2,527 -$833,000,000 $1,333,000,000

For 2019



2017 Medicare Physician Fee

Schedule

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Projected CY 2017 Physician Fee Schedule

Conversion Factor

Conversion Factor in effect in CY 2016 35.8043

Mandated Update Factor 0.50 percent (1.0050)

CY 2017 RVU Budget Neutrality

Adjustment

-0.51 percent (0.9949)

CY 2017 Target Recapture Amount 0 percent (1.0000)

CY 2017 Imaging MPPR Adjustment -0.07 percent (0.9993)

CY 2017 Conversion Factor 35.7751



Adjustments for Misvalued (MV) Services

The Protecting Access to Medicare Act of 2014 (PAMA) established an annual target of 0.5 percent reductions in PFS expenditures resulting from adjustments to relative values of so-called misvalued codes. The law sets a “savings” target of 0.5 percent of the estimated Medicare expenditures under the Physician Fee Schedule.

This means that there could be increases or decreases in payments for specific services that reflect the raising or lowering of the code value.



Multiple Procedure Payment

Reduction (MPPR)

The MPRR applies the professional component of Advanced Imaging Services when multiple imaging procedures are furnished by the same physician or physician in the same group practice to the same patient, in the same session, on the same day with payment for the subsequent service reduced by 25 percent.

The Consolidated Appropriations Act of 2016 reduced the payment reduction from 25 percent to five percent effective January 1, 2017.

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Clinical Decision Support/AUC

As part of the MACRA legislation, Congress mandated that as a condition for paying for advance imaging, the ordering professional MUST consult with an Appropriate Use Criteria (AUC), Clinical Decision Support tool beginning in 2017.

Although AUC is limited – at this time – to advanced imaging, it is conceivable that this type of mechanism could be applied to other areas of medicine where one clinician is referring a patient to obtain a diagnostic or therapeutic service from another.



Despite the Congressional Mandate,

CMS has announced

Ordering professionals will not be required to consult qualified CDSMs by January 1, 2017.

CMS anticipates that furnishing professionals may begin reporting as early as January 1, 2018.

CMS plans to adopt procedures for capturing information on claims forms and the timing of the reporting requirements as part of the CY 2018 rulemaking process.



Why is this happening?

On their face, the “appropriate use” initiatives are intended to replace the third party “benefit managers” employed by health plans as part of a prior authorization process.

Many question whether these third party “benefit managers” truly assess clinical necessity or are they simply there as a buffer to justify denial of service?

In the end – ALL – of these services are effectively questioning the clinical judgement of the ordering provider.

No longer can a clinician (physician, PA, NP, etc.) be trusted to determine medical necessity. We need a third party (either business or computer program) to make determination.

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HOPPS – Site Neutral Payment Policy

In November, 2015, Congress passed and the President Signed into law the Bipartisan Budget Act of 2015 . Included in this bill is language (Section 603) prohibiting “new” off-campus hospital outpatient departments from billing for services using the HOPPS payment methodology beginning January 1, 2017.

“New” off-campus OPDs are those who were not billing Medicare at the time the legislation was enacted –November 2, 2015.



So what happens on January 1,

2017?

In the proposed rule, CMS notes, there is no straightforward way for these off-campus OPDs to bill and receive payment for furnishing items and services under an applicable payment system that is not the OPPS

Further, CMS notes that they will not have a payment mechanism in place before January 1, 2017.

BUT, at some point they do “intend to provide a mechanism for an off-campus PBDs to bill.”



Why is this of interest to HBMA members?

In order to allow an off-campus PBD to bill

under the PFS, CMS believes is will be necessary to establish a new provider/supplier type that

could bill and be paid under the MPFS for items

and services using the professional claim.

Now What?

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Why is this of interest to HBMA

members?

CMS proposes that in off-campus OPDs that

can no longer bill OPPS, the physician or

practitioner bill and be paid for items and services in the off-campus PBD under the MPFS

at the non-facility rate instead of the facility

rate.



For 2017

CMS is proposing the Medicare Physician Fee Schedule be the applicable payment system for items and services that, but for section 603, would have otherwise been paid under the OPPS; and that payment would be made for applicable items and services to the physician or practitioner under the MPFS at the non-facility rate.

No separate facility payment would be made to the hospital.



OR

PBD could enroll as a freestanding facility or

supplier in order to bill for the items and

services it furnishes under the MPFS. Options include Ambulatory Surgical Center,

Independent Diagnostic Treatment Facility,

Radiation Treatment Center and more.

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What services are being covered under HOPPS

that will have to switch to MPFS?

Imaging (advanced and minor) Blood Product Exchange

Cardiac/Pulmonary Rehabilitation Clinical Oncology

Diagnostic tests Ear, Nose, Throat (ENT)

General Surgery Gastrointestinal (GI)

Gynecology Musculoskeletal Surgery

Nervous System Procedures Ophthalmology

Pathology Radiation Oncology

Urology Vascular/Endovascular/

Cardiovascular



For 2018 and beyond…

Because CMS does not believe that an off-

campus PBD could be paid for its facility

services under the MPFS, CMS is “actively exploring options that would allow for this

beginning in CY 2018.”



Why is this of interest to HBMA

members?

This MAY be a new business opportunity. You

may want to contact the hospitals in your markets to ascertain whether they have HOPDs

that will be impacted by this new policy and if

so, do they need help (or the physicians need help) doing the billing for these services.

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Questions?



Bill Finerfrock

President

Capitol Associates, Inc.

202-544-1880

[email protected]

Documents

Finerfrock - Healthcare Business Management AssociationDonald Trump’s Healthcare Reform ideas • Completely repeal Obamacare and start over. Eliminate the individual mandate. No