Bogard - New Government Payment Initiatives for Physicians

8/12/2019 Bogard - New Government Payment Initiatives for Physicians

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New Government Payment Initiativesfor Physicians

Presented by:

2014 MGMA/Alabama Winter Conference

March 5-7, 2014

Birmingham, Alabama

Howard E. Bogard

Burr & Forman LLP | Attorney at Law

420 North Twentieth Street | Suite 3400 | Birmingham, Alabama 35203

[email protected] | www.bu rr.com | 205-458-5416

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Topics

Factors Driving a Change in Government

Accountable Care Act ("ACA") Payment Initiatives

New Insurance Coverage Initiatives

Accountable Care Organizations ("ACO")

Medicaid Regional Care Organizations ("RCO")

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Topics

Factors Driving a Change in Government

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National Health Expenditures,(1)

1980 – 2020(2)

$4,000

$4,500

$5,000

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

B i l l i o n s

$080 90 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released July 2011.(1) Years 2010 – 2020 are projections.(2) CMS completed a benchmark revision in 2009, introducing changes in methods, definitions and source data that are applied to the entire

time series (back to 1960). For more information on this revision, seehttp://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf. 4

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$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

80 90 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

B i l l i o n s



. 9 . 6 . 3 6 . 9 7

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45

50

Medicare Enrol lees,(1) 1991-2011

3 4 3 3 3

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15

20

25

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35

M i l l i o n s

Source: Centers for Medicare & Medicaid Services. Medicare Enrollment: National Trends, 1966 – 2005; Medicare Aged andDisabled Enrollees by Type of Coverage. CMS, Office of the Actuary. Email correspondence with CMS staff (for years 2001 – 2011).(1) Hospital insurance (Part A) enrollees and/or Supplementary Medical Insurance (Part B) enrollees; includes all persons (aged and disabled).

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

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3 4 . 9

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91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

M i l l i o n s

Physician Fees: Routine Office Visit

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6Source: www.huffingtonpost.com



SGR – An Initial Attempt to Control Medicare Spending

Sustainable Growth Rate (SGR) was part of theBalanced Budget Act of 1997

Designed to curb growth of Medicare Part Bexpenditures

SGR is based on a spending target linked to thenation's gross domestic product. Actual spendingon physician's services is compared to the target ─ Spending less than target = Increase in Part B fees ─ Spending more than target = Decrease in Part B fees

Initially SGR benefitted physicians because of strong economic growth

In early 2000s, expenditures exceeded target and

cuts to the physician fee schedule proposed

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SGR Delayed – Again

Reductions now stand at 24.4% Congress has recognized that the SGR is flawed Instead of fixing the problem, Congress delayed the

cuts yet again – but only through March 31, 2014!

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Current Change in Reimbursement Methodologies

Payment Reform ─ Move awa from an e isodic a ment a roach that

provides financial incentives based on volume ─ Move to a payment system that rewards outcomes,

quality, prevention, patient satisfaction and reducedcosts to Medicare (i.e., efficiency)

Delivery Reform ─ Move away from uncoordinated care where each

provider (e.g., physician, hospital, home health, .

fashion ─

Move to a coordinated and accountable approach tocare involving providers along the entire patient carespectrum

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Topics

Accountable Care Act ("ACA") Paymentn a ves

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Emphasis on Primary Care/Preventative Services

The ACA creates a 10 percent bonus payment for

physicians beginning January 1, 2011

General surgeons practicing in a healthprofessional shortage area will be provided a 10percent bonus payment for certain major surgicalprocedures

The ACA emphasizes preventative care. Sectiono e prov es or e care coverage o

annual wellness visits, mammograms,

colonoscopies and personalized preventative plans,with no co-payments or deductibles

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Payment Changes for Medicaid

The expansion of the Medicaid program willexacerbate the current shortage of primary care

y

The ACA seeks to enhance primary care capacityby increasing Medicaid physician fees for primarycare physicians to Medicare rates, with the federalgovernment picking up the added expense in theinitial years

— r mary are ys c ans = am y me c ne, n ernamedicine and pediatric medicine

— According to The Academy of Family Physicians, theaverage reimbursement will increase 34%

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Quality and Value Requirements

The ACA extends the Physician Quality Reporting Initiative("PQRI") (now called the Physician Quality ReportingSystem) bonus payment through 2014 (1% in 2011; 0.5%n - ; pena es . eg nn ng or a ureto report 2013 data; 2% penalty for 2016 for failure to report2014 data

Medicare Value-Based Payment Modifier ("VBPM").Beginning in 2015, providers who do not meet "value" and"quality" requirements will face a reduced reimbursementrate

— In 2015 only impacts physician practices of 100 or more;2017 all physicians

— Program moves physician reimbursement to a system thatrewards value rather than volume

— Based on PQRS performance13

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Changes in Delivery Model of Care – Bundled

Payments

Section 3023 of the ACA directs HHS to establish a 5-year,national, voluntary pilot program by January 2013

Hospitals, physicians and post-acute care providers will" "

beneficiary

The "episode of care" will center around a hospitalization anda bundled payment will be paid reflecting the savings realizedas a result of integrated care

"Episode of care" – 3 days prior to an admission, length of hospital stay (including ED services), 30 days post-discharge

"Bundled payment" models – establish a single DRG that

includes post-acute care; bundling of physician and hospitalpayment

Some payment models being tested place providers at risk for Medicare expenditures above an established threshold

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Changes to Hospital Reimbursement

Hospital Value-Based Purchasing Program ─ Ties payment to performance ─ ,

heart failure, (3) pneumonia, (4) surgeries, and (5)infections

Hospital Readmissions Reduction Program ─ Reduced payment (up to 1%) for readmissions within

30 days of discharge Will create pressure on physicians to meet higher

expectations r v ng osp a emp oymen o car ovascu ar

physicians, increased use of hospitalists, emphasis on

post-discharge care coordination and collaborativeagreements with physicians

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Topics

New Insurance Coverage Initiatives

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Changes to Insurance Coverage

Insurers are prohibited from denying coverage basedon re-existin conditions

Coverage for children until age 26

Lifetime limits on coverage eliminated

Annual limits on coverage eliminated

Medicare Part D Prescription Drug coverage gap("donut hole") is closed (phased in from 2010 to 2020)

All plans must cover certain preventative servicessuch as mammograms and colonoscopies without anypatient deductible or co-pay

Expansion of Medicaid – but not for Alabama

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Health Insurance Exchanges

Must have coverage by January 1, 2014 or payenalt :

— 2014: greater of $95 per adult/$47.50 per child or 1% of family income

— 2015: $325/$162.50 or 2%

— 2016: $695/$347.50 or 2.5%

Individuals and families that fall within 138% FederalPoverty Level (FPL) and 400% FPL will have access

— Under 138% of poverty level in some states qualify for Medicaid, but not Alabama

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Subsidizing Premiums for Patients in the Health

Insurance Exchanges

October 30, 2013 HHS Letter: Health InsuranceExchange plans ("qualified health plans") are notfederal healthcare programs ─ e era rau an use aws on app y .e.,

Anti-kickback, Stark, CMP)

AHA gives "green light" to hospitals to pay for premiums

November 4, 2013 HHS FAQ: "HHS has significantconcern with this practice because it could skew theinsurance risk pool and create an unlevel field in

.and encourages issuers to reject such third partypayments"

Premium assistance one form of a provider'sfinancial assistance policy?

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Health Insurance Exchange Plans – BCBS Alabama

(Jefferson County)

Bronze Silver

(2 Plans)

Gold

(2 Plans)

Platinum

CalendarYearDeductible

$6,350 individual$12,700 family

$2,400-$3,000individual$4,800-$6,000family

$500-$600 individual$1,000-$1,200 family

$100 individual$200 family

CalendarYear Out-of-Pocket


$6,000-$6,350individual$12,000-$12,700



Policyholder is responsible for 100% of costs until deductible amount is met. After the deductible is met, the policyholder is responsible for the coinsurance/copay untilthe out-of-pocket maximum is reached, at which point the insurance companyassumes 100% of the cost.

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Source: www.valuepenguin.com; January 30, 2014



Collecting Deductible Up Front

Except in emergency situations

Inform patient before appointment of financial responsibility

Collect after appointment but before patientleaves the office

Consider payment plans

— Credit cards

— Auto bank drafts

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Topics

Accountable Care Organizations

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ACO Background Information

Section 3022 of the ACA requires the establishmentof a "Medicare Shared Savin s Pro ram" bJanuary 1, 2012 ─ Promote accountability for a patient population ─ Coordinate items and services under Medicare Parts

A and B ─ Encourage investment in infrastructure and

redesigned care processes for high quality andefficient service delivery

Program requirements can receive "shared

savings" if quality and financial performancestandards are met

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ACO Summary

In general, an ACO is a network of physicians and

a common set of delivery and financing principles toprovide high-quality efficient care

ACO providers continue to receive fee-for-servicepayments under Medicare Parts A and B

If an ACO meets its quality and financialperformance goals, it will receive "shared savings"

rom e care Shared savings = difference between anticipated

Medicare expenditures for an identified populationless actual expenditures

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Possible Comprehensive Health

System ACO Legal Structure(Note that an ACO may involve just a single physician group rather than acomprehensive hospital-physician integrated health system legal structure)

Accountable CareOrganization

IPA PhysicianOrganization(s)

Hospital

Foundation Captive Group Other Employed li i

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PrivatePhysicians

Model Practice Physiciansli i

MedicalHome

ACO Participants

As of January 2014 there are approximately 366Medicare ACOs approved by CMS (123 new

ACOs just announced December 23, 2013)

January 30, 2014 CMS Report

— $380 Million in savings through ACOs

— 54/114 ACOs that started in 2012 reducedexpenditures

— Million

ACO Regulations estimate $1.31 Billion in ACOpayments from 2012 to 2015

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Special Considerations for Physicians

Will you be invited to participate in an ACO? /Do you want to participate?

─ participation not exclusive (unless PCP)

Risk v. Reward ─ financial and administrative "costs" to participate ─ will participation result in increased patients / not

participating result in a loss of patients ─ how will shared savings and losses be allocated

Will the cost of reducing utilization inorder to achieve the minimum savingsra e, n a on o me ca ma prac cerisks associated with a change in the

treatment plan, be offset by the sharedsavings?

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Topics

Medicaid Regional Care Organizations

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Alabama Medicaid

Approximately 940,000 Medicaid Enrollees (up from904,000 in 2003) (out of 4.8 million people in

Alabama

In 2011, 22 percent of Alabamians qualified for Medicaid for at least a portion of the year

Medicaid covers 53 percent of births, 47 percent of children, and almost 66 percent of nursing homeresidents

Fiscal Year 2012 Medicaid expenditures were$5.63 billion (67.4% Federal; 32.6% State ($1.835billion))

Governor Bentley elected not to expand Medicaidrolls to 138 percent of the poverty level under the

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Regional Care Organizations (RCOs) An organization of health care providers that

contracts with the Medicaid Agency to provide acom rehensive acka e of benefits to Medicaidbeneficiaries in a defined region of the State

Through a capitated payment, RCOs would providephysical (e.g., physician and hospital), behavioral,pharmacy and long-term care services (e.g., post-acute and rehab)

Pro ected savin s between 748 million and 1.079billion over five years

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Regional Care Organizations (RCOs)

RCOs will perform case management RCO Board Composition

─ Twelve "risk bearing" participants (contribute capital or assets) ─ Eight "non-risk bearing" participants

• Five medical professionals who provide care in the region: (3PCP with 2 appointed by county boards of health and 1 from aFQHC; 1 OD; 1 pharmacist)

• Three community representatives

─ No single type of healthcare provider can have a majoritymembership on the RCO

Can have more than one RCO per Region An RCO must contract with any physician, hospital or other

prov er w ng o accep e paymen s an erms o ere ythe RCO

RCOs would not initially cover Medicare/Medicaid dual eligiblepatients, developmentally disabled patients, and dentalbenefits

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Ant itrust Protect ion

The new law specifically exempts from state antitrust laws andprovides immunity from federal antitrust laws "collaborators"who cooperate, negotiate, or contract to participate in an RCO

o a ora or e ne as a pr va e ea carr er, r par ypurchaser, provider, health care center, health care facility,state and local governmental entity, or other public payers,corporations, individuals, and consumers who are expecting tocollectively cooperate, negotiate, or contract with another collaborator or regional care organization in the healthcaresystem"

Must apply and receive an antitrust exemption in the form of a

" " Application available at https://rcoportal.medicaid.alabama.gov

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Medicaid RCO Timeline

January 1, 2013 – Report of the Alabama Medicaid Advisory Commission

May 17, 2013 – RCO Law signed by Governor Bentley October 1, 2013 – Five regional services areas established

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Medicaid RCO Timeline

October 1, 2014 – Governing Boards for each Regionmust be approved

April 1, 2015 – RCO must prove ability to establish anadequate provider network

October 1, 2015 – RCO must meet solvencyrequirements

October 1, 2016 – RCO must demonstrate ability to

provide services under a risk contract (RCOsoperational)

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Take Aways

Shift away from "fee-for-service" to "fee-for-value"

Learn the new vocabular : "Pa for Value ""Bundled Payments," "Accountability," "PQRS,""VBPM," "RCOs," and "ACOs"

Determine your costs of care

Create Efficiencies

— Purchasing

— Clinical best practices; benchmarks

— Information management — Billing (avoid errors)

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Questions?

Howard E. Bogard

Burr & Forman LLP

420 North Twentieth Street

Suite 3400

Birmingham, Alabama 35203

[email protected]

(205) 458-5416

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Documents

Bogard - New Government Payment Initiatives for Physicians