‘Tis the season for retrospectives. As we reflect on 2016, there is no shortage of developments in the healthcare industry worthy of commentary, but three stand out as particularly significant. Without further ado, here they are:
CMS Is Betting Big on Bundled Payments
Since the introduction and rollout of the Affordable Care Act (ACA), CMS has sharpened its focus on bundled payments as a viable and sustainable alternative to the costly fee-for-service (FFS) reimbursement model.
The series of announcements this year gives us insight into how bullish CMS is on bundles, including the extension of the Bundled Payments for Care Improvement Initiative (BPCI); the launch of the first mandatory bundle, the Comprehensive Care for Joint Replacement (CJR) model; the selection of awardees for the Oncology Care Model (OCM); and most recently, the declaration of new mandatory cardiac bundles.
And CMS is not the only entity betting heavily on this payment model. Commercial payors and employers are following suit, because bundles represent one of the few approaches in healthcare today where all stakeholders can benefit. Available data indicates that not only are costs better controlled, but care quality is demonstrably better in well-managed programs.
MACRA Will Change the Way Physicians Get Reimbursed
Just a few short months ago CMS released the much anticipated final rule for the Medicare Access and CHIP Reauthorization Act (MACRA).
MACRA represents the most sweeping set of legislative changes to Medicare’s physician payment methodology in more than two decades. The changes do not go into effect until 2019, but January 2017 marks the beginning of the first performance year. So, providers will be reimbursed in 2019 for how they perform in 2017.
Practices need to start getting their arms around the two reimbursement tracks and prepare to accept upside and downside risk during the next five years. And physician groups aren’t the only stakeholders impacted by MACRA. Hospital and health system administrators also have a great deal of work ahead to build comprehensive provider networks and align physician incentives with new reimbursement realities.
Just like bundled payments, the big takeaway from MACRA is that payments will be tied to outcomes moving forward.
Donald Trump’s Election Means an Uncertain Fate for the ACA
Trump’s election, together with the Republican victories in Congress, has sparked an already flammable national conversation around the probable repeal of some or all of the ACA. Without a replacement option already lined up, numerous questions abound. Media coverage has speculated on what might happen to some of the key provisions of the law (coverage for pre-existing conditions, children keeping their parents’ policies until the age of 26, and the individual mandate) as well as what might happen to the millions of people who have insurance plans under Obamacare.
Questions of whether the ACA repeal will halt the transition to value-based care have been raised. The answer is no. Although there is not yet a consensus around how and with what the ACA will be replaced, value is clearly still the destination in healthcare. The path to get there may just look a little different under the Trump administration.
These three developments all point to one universal truth—healthcare is changing, fundamentally, and in ways that impact all stakeholders, from patients, to providers, to health systems. As trusted advisors to our clients, we look forward to working closely with health systems in addressing their business needs in an ever-evolving healthcare environment.
Here’s to a successful 2017.