By: Bill Cockrell, at Cockrell and Associates, LLC
In a time where healthcare providers feel squeezed, significant opportunities for improving the patient experience, and provider revenues, are going unachieved. To make matters worse, the opportunities will be increasing over the next few years and there appears to be a lack of urgency on the part of providers to take advantage of the opportunities. Whether it’s wanting to blame something / someone else (typically the Accountable Care Act or “Obamacare”) or other, outside influencers or hoping for some big change of unknown origin or just wanting to hunker down and cut away, there seems to be little effort to be proactive. Some seem to feel that the ACA will go away and we’ll go back to the fee for service days off old or that there are no ways to make things better.
To address the ACA going away, how are you going to unwind many of the provisions (eliminating pre-existing issues, extended coverage for dependents, or the thousands of newly covered individuals since October 2013) that are now in effect? Will elected officials really take things away from voters? And there is significant support for not eliminating, but modifying the ACA. For example, “The U.S. Chamber of Commerce has accepted that the Patient Protection and Affordable Care Act is here to stay and, rather than continue calling for its complete repeal, will work this year to change what it sees as flaws in the 2010 law, the business group's president and CEO said Wednesday.” Modern Healthcare, January 8, 2014.
As for other changes, here’s what Medicare, independent of the ACA, is planning. Three month delay in cuts most likely replaced by:
A 10 year period of stable fee updates (at 0% per year),
A value based performance program that consolidates and enhances several existing incentive programs
Incentivizes the development of, and participation in, alternative payment models
Make other changes to Medicare physician payment policies.
And as for other payers:
July 10, 2013
UnitedHealth Group on Wednesday announced that it expects to double its accountable care contracts over the next five years across employer-sponsored, Medicaid, and Medicare plans. Currently, more than $20 billion in United Healthcare reimbursements to hospitals, physicians, and other providers are paid through contracts linking pay to quality and efficiency measures. Those contracts include more than 575 hospitals, 1,100 medical groups, and 75,000 physicians nationwide.
May 17, 2012
Humana has begun working with providers on several new, collaborative delivery system models that already have yielded successful results, the insurer told a Senate panel Wednesday. “the insurer is working toward aligning payment and care through its different accountable care organizations (ACO) and patient-centered medical homes (PCMH).”
And finally, what about Blue Cross? They may not have an ACO strategy (at least called that) but they do have an existing, and easily expandable Value Based program that offers a 20% bonus (effective this year) on cognitive care to many providers. Is that significant? For the average primary care physician, a 5% increase in cognitive care payments from Blue Cross is around $7,500 so 20% is $30,000, annually. So a four physician primary care practice is looking at an additional $100- 120,000 per year. Not bad. In 2013 about 1,000 physicians achieved the 5% level and around 100 physicians achieved the 15% level. That’s a missed opportunity. Achieving a Level Three Patient Centered Medical Home (PCMH) designation in 2014 is a 10% slam dunk in this program. To put it in other terms, providing good care, making a few operational changes, having an EMR, and documenting all of it, gets you that PCMH level. Of course, there are details involved you have to address, but, compared to other options and ideas, this is an easy objective.
Back to Medicare and other payers, that “Incentivizes the development of, and participation in, alternative payment models” section is referring to programs such as ACO’s or the PCMH concept. That means, instead of a 0% increase in the fee schedule for 10 years, by 2017 those participating in these models might be looking at a 5% increase in cognitive payments from Medicare. For a practice with a 50% Medicare base, that’s good money. If a practice has a 25% BCBS patient base and the 50% Medicare patient base, do the math. In addition, other models, such as Shared Savings Plans (an ACO is an example) and the Medicaid Regional Care Organizations (RCO’s) in Alabama, are going to have an impact in the next 2 – 3 years in Alabama.
So, for providers who are retiring in the next couple of years, you deserve a hearty congratulations. For those who plan to be around for a while, it might be a good idea to see how much money you are leaving on the table. A wasted opportunity for one is a golden opportunity for another.