Issues to Watch in Government Health Programs in the Next Few Months
Last week was an exciting time for the policy world with the release of the Final Medicare Advantage (MA) Payment Rate and Call Letter. Here are some other notable stories we are watching develop in the next few weeks:
Part B Payment Model: On March 8, 2016, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule which aims to test a new alternative payment design to pay for drugs covered under Medicare Part B. While we will not see a final rule until end of May or June, CMS did already note they are considering certain exemptions to the model, such as practices already participating in the Oncology Model Demo. This proposal has already received a lot of criticism, with stakeholders arguing the model would decrease patient access to treatment while focusing too heavily on the financial picture.
MACRA: The proposed Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) Rule, a provision of the Medicare Access and CHIP Reauthorization Act (MACRA), is now at the Office of Management and Budget (OMB). MACRA repealed the Sustainable Growth Rate (SGR) formula and directed the Department of Health and Human Services (HHS) to create MIPS to replace existing physician quality programs such as the Physician Quality Reporting System (PQRS) and the Value-Based Modifier (VBM) beginning January 1, 2019. The rule will also lay out the definition of the types of APMs that will be considered bonus eligible. We should expect this regulation late April or May.
Covered California: California recently released major changes to its regulations by imposing new quality and cost standards in their contracts with insurers. The new plan will adopt a payment system for hospitals, similar to the one used by CMS, which will put 6% of reimbursement at risk or subject to a bonus payment based on quality over the next several years. Plans will also be required to identify providers and hospitals who are outliers in regards to cost or quality with these plans up for termination from the networks as early as 2019. While California is the first to issue this type of regulation, as John Gorman noted, “As goes California, so goes the world,” and we can easily see similar efforts implemented across the nation.
UnitedHealthcare: In other Affordable Care Act (ACA) news, UnitedHealthcare is seemingly making good on its threat to exit the Marketplace by pulling out of markets in Arkansas and Georgia. As we previously noted, this move should not really come as a surprise and is not an effective measure of the health of the ACA program, as UnitedHealthcare is not a strong market participant in the ACA business and only cautiously dipped its toes in the water for the first time in 2014.
Mergers: The Anthem-CIGNA merger is currently undergoing some serious scrutiny in California. The California Department of Insurance (CDI) grilled the insurers last month, and there is potential for the merger to fail to receive approval from the state. If it is to pass, we will likely see significant divestment requirements and additional scrutiny from the Federal Trade Commission and Department of Justice in Quarter 3 or Quarter 4 of 2016.
Medicaid: The final Medicaid regulation is still under review at OMB, and we should expect to see its release any day now. Touted as “the mega-rule,” this regulation will alter every part of the current Medicaid program. Most of the proposed changes by CMS align the Medicaid program with other programs such as MA and Qualified Health Plans (QHPs).
Resources
We are proud to announce a new session at the Gorman Health Group 2016 Forum featuring David Sayen, a former Centers for Medicare & Medicaid Services (CMS) Regional Administrator, who will provide a CMS update on “The March to Value-Based Payment.” Register now to reserve your seat for next week!
Our distinguished team of experts collaborated to provide our interpretation of this announcement and the key features that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Download our full Summary & Analysis of the Final Rate Announcement & Final Call Letter >>
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