While there are many questions about how the GOP plans to replace the Affordable Care Act, we expect the cost and quality initiatives begun under the previous administration to continue. Other changes resulting from major legal and regulatory efforts like meaningful use of electronic health records, the Medicare Access and CHIP Reauthorization Act (MACRA), and the Protecting Access to Medicare Act (PAMA) will also likely continue under the current administration.
Every year, HIDA publishes a comprehensive update on Medicare – known as Medicare 360° – that includes a policy analysis and forecast, as well as a summary of quality programs by market. Below are some key insights from the report and how they relate to the new federal legislative agenda.
Acute Care Market
- Due to the bipartisan Budget Act of 2015, many hospital outpatient centers will no longer receive higher payments for the same services done by other providers – such as independently-owned surgery centers or physician offices. Instead, they will be paid the physician or ambulatory surgery center rate for certain procedures. This payment adjustment took effect January 1, 2017. However, key exemptions exist for off-campus outpatient departments that were billing or under development prior to November 2, 2015.
- Providers will need to comply with new regulations from the Centers for Medicare and Medicaid Services (CMS) on emergency preparedness as a condition of participation in Medicare and Medicaid. This regulation provides an opportunity for suppliers to engage their customers on the latter’s preparedness plans. The requirements take effect November 15, 2017, and CMS plans to release more details this April.
- New payment systems introduced under MACRA begin to roll out this year. Physicians must choose to participate in the Merit-Based Incentive Payment System (MIPS) or join one of the Advanced Alternative Payment Models (APMs). Physicians may also choose not to participate, but will face the maximum reimbursement penalty. Small physician practices are exempt. (CMS expects between 592,000 and 642,000 eligible clinicians will participate in MIPS.)
- Quality data reported by physicians this year will determine their reimbursements in 2019. CMS is allowing physicians to “pick their pace” in 2017 as a transition into full participation for 2018. As long as physicians report something, they will avoid a penalty. However, physicians who do not report data in 2017 will receive the maximum payment reduction of 4% in 2019.
Laboratory and Diagnostics Market
- Due to PAMA, CMS must adopt a completely different basis for establishing Medicare rates for lab tests, which will be based on private plan rates starting in 2018. This marks the biggest change to Medicare lab payments since 1984.
- The new law will limit year-to-year payment reductions to 10% per year from 2018 through 2020, and 15% from 2021 through 2023. The new rates will also contain no state or regional adjustments.
- Because of the IMPACT Act of 2014, most post-acute providers must start reporting on the same eight quality measures in 2018. These measures aim to clinically assess patients, regardless of the healthcare setting.
- The SNF Value-Based Purchasing Program is scheduled to launch October 1, 2018. The program will lower per-diem rates by 2% to fund value-based incentives. CMS has specified that it will use the SNF 30-Day Preventable Readmission Measure to track provider quality.
- A home health VBP demonstration is currently underway in nine states.
HIDA’s Medicare 360°: 2017 Medicare Reimbursement Analysis and Outlook features payment details and regulatory outlooks for other care settings, including ambulatory surgical centers and home health agencies. HIDA also has MACRA resources to keep you and your customers up to date. For more information on HIDA reports and resources, email firstname.lastname@example.org.