Healthcare organizations more optimistic about value-based care in 2018

Just two years ago, a majority of physicians expected that the trend toward value-based care would hurt their practices financially. In 2018, the numbers are more optimistic with many physicians seeing the emphasis on quality versus quantity and on practice efficiency as actually benefiting their practices. A poll conducted by KMPG in June 2018 found that 46% of the physicians participating saw value-based contracts as improving their profitability.

The KMPG poll involved 221 healthcare professionals who were asked several questions about value-based care and its impact on their practices, during a June 5 webcast. The results were then compared to a similar survey conducted in 2016 of 142 healthcare professionals.

As summarized in Becker’s Hospital CFO Report, the 2018 survey found that:

  1. Nearly half of healthcare organizations (46 percent) expect higher operating profits from value-based contracts, compared with 23 percent in 2016.
  2. Thirty-four percent of healthcare organizations expect value-based contracts to be neutral to operating results. That’s up from 25 percent two years ago.
  3. Twenty percent of healthcare organizations expect reduced operating profits from value-based contracts, compared with 52 percent in 2016.
  4. Overall, fee-for-service still remains the primary reimbursement method for healthcare organizations.

Matt Snyder, KPMG advisory principal who focuses on internal audit and enterprise risk at healthcare organizations, stated that “We are beginning to see performance based payment models replacing traditional fee-for-service models.” He added that healthcare professionals will need to focus on high quality healthcare service as well as transparent and secure data reporting capabilities if they want to succeed in the new value-based climate.

However, the trend toward value-based care is slow-growing. The “fee-for-service” model is still prevalent among healthcare professionals. The KMPG survey found that “Only 10 percent of respondents said they had a majority of their contracts tied to value-based reimbursement, such as shared savings, bundled payments (a flat-rate for a given medical procedure), or capitation for a given patient population.”


Sam Peirce
July 30, 2018


CMS announces MAQI demonstration to waive MIPS requirements

In a move to further ease the information collection and reporting burdens for independent physicians while continuing to focus on value-based care for patients, the Centers for Medicare & Medicaid Services (CMS) has announced that it worked to put Medicare Advantage providers on a more level playing field with fee-for-service providers.

CMS has said that it will advance the Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration, which “would waive Merit-Based Incentive Payment System (MIPS) requirements for clinicians who participate sufficiently in certain Medicare Advantage plans that involve taking on risk.” The MAQI demonstration must still be approved and adopted.

Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), independent physicians have two tracks for payment under Fee-for-Service Medicare. MIPS requires clinicians to report quality data to CMS and have their payment adjusted accordingly and Advanced Alternative Payment Models (Advanced APMs) require clinicians to take on risk for their patients’ healthcare spending.

Physicians who participate in Medicare Advantage plans have written to CMS urging recognition of their participation criteria toward MACRA’s Quality Payment Program (QPP). While CMS recognizes that some “Medicare Advantage plans are developing innovative arrangements that resemble Advanced APMs …. without this demonstration, physicians are still subject to MIPS even if they participate extensively in Advanced APM-like arrangements under Medicare Advantage.”

CMS Administrator Seema Verma says that “The MAQI Demonstration aligns with the Agency’s goal of moving to a value-based healthcare system, and aims to put Medicare Advantage on a more equal playing field with Fee-for-Service Medicare.” She adds that “CMS intends to test whether MIPS exemptions provided to clinicians under MAQI will increase participation in Medicare Advantage plans that are similar to Advanced APMs, and thereby accelerate the transition to a healthcare system that pays for value and outcomes.”

CMS is currently seeking comments on the information collection burdens associated with the demonstration.

Sam Peirce
July 9, 2018


CMS looking to make changes to Stark Law requirements

In 1989, a law was enacted to prohibit physicians from profiting financially when they make referrals. The law, which became known as the Stark Law, essentially “prohibits physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.” The Stark Law is closely aligned with the Anti-Kickback Statute (AKS), both of which aim to prevent physicians from profiting when making patient referrals.

The Centers for Medicare & Medicaid Services (CMS) is now considering making changes to the Stark Law and is seeking input from physicians as it moves forward with its plans. CMS explains that the law specifically: (1) prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those referred services.

CMS has issued a Request for Information (RFI) seeking comments and addressing the background of the potential changes to the Stark Law. The RFI states that “The Department of Health and Human Services (HHS) is working to transform the healthcare system into one that pays for value” and has “launched a Regulatory Sprint to Coordinated Care, led by the Deputy Secretary.” The Regulatory Sprint is “focused on identifying regulatory requirements or prohibitions that may act as barriers to coordinated care.”

The RFI lists twenty questions that CMS would like answered by those physicians responding and providing input. Many of the questions relate to the need to coordinate care, alternative payment models, accountable care organizations (ACOs), and the role of transparency. Comments and responses must be submitted no later than 5pm, 60 days after the date of publication in the Federal Register, which was June 25, 2018.

Sam Peirce
June 29, 2018


CMS increases reimbursements for complex patients according to study

Physicians who see patients with chronic and complex conditions often spend time outside the office visit engaging both with that patient and with other healthcare providers treating the patient. Until recently, those physicians were not reimbursed for the additional time they spent with chronically ill patients. However, a study recently conducted by the Urban Institute, and supported by the Robert Wood Johnson Foundation, explains that the Centers for Medicare & Medicaid Services (CMS) has initiated new primary care billing codes for physicians who care for patients with chronic conditions.

The report states that, “in creating this new billing code, CMS acknowledged that the existing payments for some patient visits did not provide sufficient compensation to cover all the prep and follow-up work required for such visits.” Recognizing that complex patients are costly – 69 percent of traditional Medicare beneficiaries have multiple chronic conditions, yet they generate 93 percent of Medicare spending – CMS is placing a higher priority on their care.

The shift to quality care requires primary care physicians to focus on outcomes, which also requires spending more time with complex patients. The new billing codes and demonstrations implemented by CMS allows the organization to: “(1) incentivize specific activities that the agency knows it wants clinicians to engage in (through billing codes), and (2) test whether it can achieve favorable outcomes by paying for promising new delivery reforms (through demonstrations),” according to the Urban Institute study.

The primary care-friendly billing codes are reflected in the final rule for the 2018 Medicare Physician Fee Schedule (PFS). As the report states, “Medicare will now pay for time spent engaging in remote monitoring of patients’ physiological data (e.g., blood pressure, glucose; 99091) and for a variety of telehealth services (e.g., caregiver health risk assessments [96161], care planning for chronic care management [G0506], and interacting with complex patients [90785]).”

Sam Peirce
May 29, 2018


Pending changes to MACRA

The reporting requirements for participating in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) can be an overwhelming burden for independent physicians. The Centers for Medicare & Medicaid Services (CMS) has acknowledged that burden and is considering changes to MACRA that would continue to emphasize quality care while improving the reporting processing for independent physicians.

CMS received a significant number of responses from providers when they published several requests for information (RFIs) recently. According to the Healthcare Financial Management Association (HFMA), the agency is “is looking at overhauling MACRA—including through simplification of the data submission process—as authorized by the Bipartisan Budget Act of 2018 (BBA).” CMS is reviewing each quality measure that independent physicians are required to report as part of MACRA.

Kate Goodrich, MD, director of the Center for Clinical Standards and Quality and CMO for CMS, stated that the agency is also working with electronic health record (EHR) vendors to help ease the reporting requirement burdens for independent physicians. Specifically, the agency is stressing the need to automatically extract data from the EHRs to submit to CMS, which would require little to no action on the part of independent physicians.

Goodrich emphasized, though, that there will be no more delays in the rule implementation for providers to adopt the 2015-edition EHR technology to meet the requirements of the EHR meaningful use programs. She stated that CMS has “delayed this a couple years, but last year we finalized that this would be required starting in 2019; we are not backing down on that, so we are not changing that and will reiterate that.”

Additionally, CMS is planning to offer more alternative payment models (APMs) in 2018. The agency is emphasizing physician enrollment in the new Bundled Payments for Care Improvement Advanced (BPCIA) program, CMS’s latest push on APMs. Starting in 2019, independent physicians who enroll in the BPCIA program will qualify as advanced APMs under MACRA.

Sam Peirce
May 8, 2018


CMS to allow patients to bill physicians directly

The Centers for Medicare & Medicaid Services (CMS) has released comments it received on the CMS Innovation Center’s New Direction Request for Information (RFI) published in the fall of 2017. The intent of the RFI was to “collect ideas on a new direction for the agency’s Innovation Center to promote patient-centered care and test market driven reforms that: empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.”

Many of the comments CMS received from healthcare providers “reflected broad support for reducing burdensome requirements and unnecessary regulations.” To that end, CMS has announced that it is taking steps toward developing a direct provider contracting model. Under the new structure, Medicare patients would be able to contract directly with their physicians.

In their announcement, CMS indicated that the new direct provider contract model would drive better beneficiary outcomes by allowing physicians to “take further accountability for the cost and quality of a designated population.” In addition, the model would potentially “enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures.”

CMS Administrator Seema Verma has said that she recognizes that “the best ideas don’t come from Washington, so it’s important that we hear from the front lines of our healthcare system about how we can improve care.”

A follow-up RFI has been issued, to gather detailed information from healthcare providers that will enable CMS to design and release the direct provider contract model. Comments on the recently issued RFI are due by 11:59 EDT on Friday, May 25, 2018. Physicians interested in providing input can find the Direct Provider Contracting RFI at

Sam Peirce
April 25, 2018


CMS shares plan for advancing value-based care and interoperability

Focusing on the patient’s needs is paramount for value-based care to truly be effective. That was a significant point delivered by CMS Administrator Seema Verma at the HIMSS18 Conference in March 2018. In addition to discussing interoperability and technological advances, Verma said, “I’ve always been struck by how seldom the patient is mentioned in discussions around value-based care. Let me be clear, we will not achieve value-based care until we put the patient at the center of our healthcare system.”

Interoperability plays a huge role in enabling patients to be at the center of their own healthcare. Although electronic health records (EHRs) improve the efficiency of an independent physician’s practice, enabling the physician to easily access and input medical data, and providing the patient with electronic  communication tools, the EHR systems of multiple practices must be set up for interoperability to ensure the patient’s records are complete, current, accurate, and that all records are accessible by the patient as well as the independent physician.

Verma stated that the Centers for Medicare & Medicaid Services (CMS) is launching the MyHealthEData Initiative, “a government-wide initiative that will break down the barriers that contribute to preventing patients from being able to access and control their medical records.” Verma further elaborated that “Patients need to be able to control their information and know that it’s secure and private. Having access to their medical information will help them make decisions about their care, and have a better understanding of their health.”

Verma also announced that CMS would “overhaul the documentation requirements of Evaluation and Management codes to make it easier for providers to use their EHRs. These are the codes that doctors use to bill Medicare for patient visits.”

Part of the goal of the new plans outlined at the conference is to help reduce healthcare costs, which are increasing for independent physicians and their patients. Streamlining practice operations and providing higher quality care to patients will contribute to reduced cost and improved, value-based care.

Sam Peirce
April 10, 2018


Bipartisan bill could require every state to use EPCS

In an effort to help combat the opioid addiction crisis and to stem the increase of forged and altered prescriptions, a bipartisan group of US Senators has introduced a bill that would mandate electronic prescriptions be used for controlled substances under Medicare. The Senate group includes Elizabeth Warren, D-Massachusetts; Michael Bennet, D-Colorado; Dean Heller, R-Nevada, and Pat Toomey, R-Pennsylvania.

The “Every Prescription Conveyed Securely Act” was introduced on February 27. The act requires physicians and other health care providers to use electronic prescriptions for controlled substances for Medicare Part D transactions. The mandate would take effect in 2020.

In a letter applauding the Every Prescription Conveyed Securely Act, the National Association of Drug Store Chains pointed out that “EPCS prescriptions cannot be altered, cannot be copied, and are electronically trackable. Furthermore, the federal DEA rules for EPCS establish strict security measures, such as two-factor authentication, that reduce the likelihood of fraudulent prescribing.”

Prescription opioids account for more than half of the opioid-related deaths. Electronic Prescribing for Controlled Substances (EPCS) was introduced as a way to address high rates of drug abuse across the country. By making prescriptions harder to forge or steal, it reduces the ease with which teens and other citizens can access prescription drugs.

The Every Prescription Conveyed Securely Act will “require e-prescribing for coverage under part D of the Medicare program of prescription drugs that are controlled substances.” When discussing the new act, Senator Benet said that “An epidemic of this magnitude requires us to address all aspects of the problem, starting with how providers prescribe opioids. This bipartisan legislation would expand a critical tool to track the use of opioids, ultimately reducing overdoses and saving lives.”

The US Department of Health and Human Services (HHS) reports that, on an average day in the US, more than 650,000 opioid prescriptions are dispensed. Most of those prescriptions are written on paper and handed to the patient, which then makes them susceptible to misuse or fraud. Electronic prescriptions make it much more difficult to forge or steal prescriptions written for controlled substances such as opioids.

Sam Peirce
March 26, 2018


How do new marijuana policies affect independent physicians?

Even though the use of medical marijuana is now allowed in 29 states and the District of Columbia, there is still much uncertainty in regard to legal issues as well as medical protocol surrounding the drug. Marijuana is still illegal on a federal level and the newness of the state laws has left many independent physicians unprepared.

In fact, a study published in Drug and Alcohol Dependence found that nine out of 10 doctors say they are unprepared to prescribe medical marijuana to their patients. More than one-third, just over 35%, of those physicians participating in the survey say they are not prepared to answer patient questions about medical marijuana.

Independent physicians should seek further education about medical marijuana before they can prescribe it appropriately. Unfortunately, clinical studies of the effects of medical marijuana are not conclusive in either its benefits or potential side effects. There are more systematic studies under way, and a January 2017 report from the National Academies of Sciences, Engineering, and Medicine summarized the current evidence on both therapeutic effects and harmful effects while also recommending that further research be carried out.

Exacerbating the problem of a lack of conclusive research is an unwillingness to proactively discuss medical marijuana in medical schools.  The above study found that “only 9% of medical schools have medical marijuana documented in their curriculum and 85% of doctors surveyed said they received no education in medical school or residency on medical marijuana.”

Policy updates related to medical marijuana also are not clear, adding the complexity physicians must manage when considering prescribing this substance.  For example, some state’s policies raise questions about physicians who use telemedicine for their patients who may need medical marijuana. Mary Callison, M.D., who treats medical cannabis patients in Maine and who uses video conferencing, is “fighting new state rules that she says discriminate against disabled, rural and low-income patients.”

Independent physicians who practice in those states in which the use of medical marijuana is allowed will need to be better prepared with an understanding of the benefits and drawbacks of the drug before being able to make an appropriate decision for their patients.

Elation Health will continue to monitor and report on the ongoing debates about the use of medical marijuana and its legality on both a state and federal level.

Sam Peirce
March 23, 2018


Healthcare spending to reach 19.7% of GDP by 2026

Healthcare costs are rising. Medications and services provided by physicians are becoming more expensive. The uncertainty over the status of the Affordable Care Act (ACA) has impacted insurance coverage and premiums. The population of the US is aging and Baby Boomers need more care, even as they transition over to Medicare coverage.

A recent report in Health Affairs states that “under current law, national health spending is projected to grow 5.5 percent annually on average … and to represent 19.7 percent of the economy in 2026.” National healthcare spending is expected to reach the $5.7 trillion mark by 2026. The report points to several “fundamental and demographic factors” driving the increase, including:

  • Trends in disposable personal income
  • Increases in prices for medical goods and services
  • Shifts in enrollment from private health insurance to Medicare that result from the continued aging of the baby-boom generation into eligibility.

Prices for medical goods and services are projected to increase more gradually. The increase in these costs was at historic low rates in the previous three years, have risen only 1.1 percent per year from 2014 to 2016. The projection is for the costs of medical goods and services to increase an average of 2.5 percent per year through 2026.

According to the Health Affairs report, prescription drugs are “projected to experience the fastest average annual spending growth” at 6.3 percent per year through 2026. The projected growth “trend primarily reflects faster-anticipated growth in drug prices, which is attributable to a larger share of drug spending being accounted for by specialty drugs over the coming decade.”

As the population ages, Baby Boomers will become eligible for Medicare as well as Medicaid in growing numbers as their medical needs increase and their income decreases in retirement. Given these factors, the “spending growth in Medicare and Medicaid is a substantial contributor to the faster projected overall growth in national health spending through 2026.”

Sam Peirce
March 20, 2018