Medicare Compliance & Reimbursement

Make sure your EHR system can handle this substantial change.

All those rumblings about revamping the Medicare payment system have turned into reality. Prepare yourself for the way Medicare pays you to completely change.

On Jan. 26, Health and Human Services (HHS) Secretary Sylvia Burwell announced that during the next three years, the Centers for Medicare & Medicaid Services (CMS) would transition the traditional Medicare fee-for-service (FFS) payment structure to a quality- or value-based model. Despite the widespread hype, this proposed transformation won’t be all peaches-and-cream.

Upside: Get Paid for High-Quality (Not More) Care

CMS wants to move the Medicare program toward paying providers based on the quality, instead of the quantity, of care they furnish to patients. Most industry stakeholders agree that CMS’ plan is ambitious but achievable and positive. 

“This kind of payment reform will drive fundamental changes in how care is delivered, making the healthcare system more responsive to those it serves and improving care coordination and communication among patients, families and providers,” Debra Ness, president of the National Partnership for Women & Families said in a Jan. 26 statement. 

CMS pointed to several payment models that the Affordable Care Act (ACA) created, including primary care medical homes (PCMHs), Accountable Care Organizations (ACOs), and bundled payments for episodes of care. Although these so-called alternative payment models (APMs) have been implemented on a demonstration basis, CMS wants to expand the models to nearly the entire healthcare industry.

Bonus: The proposed quality-based payment model would effectively capture more of the services you provide to patients. Instead of thinking in terms of non-covered versus covered items or services, you would focus on the overall quality of care.

CMS also announced the creation of a Health Care Payment Learning and Action Network, meant to enable HHS to work with private payers, providers, consumers, employers, states, and other stakeholders to expand APMs through their own work. The Network’s first meeting will occur in March.

Brace Yourself for More Quality Reporting

Downside: But one concern regarding the transition is the potential for more quality measures that you will need to report. And already many providers are dealing with a multitude of different quality measure systems, some of which contain conflicting quality indicators.

There is a “growing concern among the Commission about Medicare’s current approach to quality measurement,” the Medicare Payment Advisory Commission (MedPAC) stated in a Jan. 13 comment letter to CMS, just days before CMS announced the payment changes. “Medicare’s current quality measurement approach is becoming ‘over-built,’ and is relying on too many clinical process measures that are, at best, weakly correlated with health outcomes.”

MedPAC urged CMS to scale down quality measures, with “more focused attention on a small number of population-level outcome measures, such as potentially avoidable hospital admissions, emergency department visits, and readmissions.”

But so far, there’s no word from CMS on what (or if) new or different quality measures will come about in the new payment model. 

Beware: Providers will need to plan to modify their systems to accommodate for new or changing quality measures, Christopher Crosswhite, an attorney with the law firm Duane Morris in Washington, D.C. tells Eli. You will need to find out whether your electronic health record (EHR) system has the capabilities to change important elements like coding/billing and quality reporting.

You need to get ready for new measures and quality systems, and “be actively involved,” Crosswhite urges. Stay on top of developments as they come from CMS so you can plan ahead for these changes.

Your Payments Could Fall Flat — At First

Not to mention the expense involved when employing new quality initiatives — monitoring and initiating new quality measures takes time, Crosswhite notes. And while you’re spending more on implementing a new quality-based system, your payments won’t necessarily reward you for simply working toward goals. So your pay could be low, at least at first, while your costs are going up.

Pitfall: This means that you could have a harder time maintaining revenue margins, because you have “a certain level of fixed costs that don’t go away,” Crosswhite warns. And this cost-versus-revenue struggle will likely reinforce trends toward consolidation in the healthcare industry — which is not always a bad thing, but it can lead to fewer alternatives for patients seeking healthcare services in smaller communities or rural areas.

Private Payers May Cause You More Confusion

Another problem: You could have more confusion over vastly different payment systems, as well as coding/billing and quality reporting requirements, if state Medicaid agencies and private payers don’t follow in-step with the Medicare payment reforms. Historically, private payers have followed Medicare conventions, but there’s no telling how much they will conform to the new quality-based system.

On the other side of the coin, HHS could learn much from Medicare Advantage as an example of moving toward value-based payments, Crosswhite points out. HHS needs to have more of an approach of looking at what has worked (and hasn’t worked) in the past.

“Health plans have been on the forefront of implementing payment reforms in Medicare Advantage, Medicaid Managed Care, and in the commercial marketplace,” America’s Health Insurance Plans (AHIP) president and CEO Karen Ignagni said in Jan. 26 statement. Hopefully, no matter whether HHS follows private payers’ lead or vice-versa, all payers can get onto a somewhat similar page during the transition in the next few years.

Are You in for a Long, Bumpy Road Ahead?

Exactly how CMS plans to achieve these new goals is not yet clear, attorneys Carolyn Metnick and Stacey Callaghan lamented in a Feb. 2 blog posting for the law firm Akerman LLP. And several major industry organizations, including both the American Medical Association and the American Hospital Association, have asked CMS for more information regarding the phasing in of the new goals.

In a Jan. 27 statement, the American College of Physicians’ president David Fleming, MD, MS, MACP applauded the move to a quality-based payment model, but he also cited the following major steps required to achieve CMS’ goals:

1. Repeal the Medicare Sustainable Growth Rate (SGR) formula.

2. Harmonize the quality measures used in the current Medicare reporting programs (PQRS, e-prescribing, meaningful use, Medicare value-modifier) with each other and with the measures that private payers use. 

3. Partner with professional medical membership societies to support and prioritize the transition efforts.

4. Ramp up and expand the Comprehensive Primary Care Initiative and other programs funded by the Center for Medicare and Medicaid Innovation.

5. Continue to improve traditional FFS to facilitate the transition to value-based models.

6. Ensure that the National Quality Forum validates all performance measures.

7. Improve the functionality of EHRs and make changes to the meaningful use program.

Bottom line: CMS will soon issue more specific guidance and action points on exactly how this transition will occur — and what the proposed value- and quality-based payment systems will actually look like. Get ready to prepare your organization for this major change.

Resources: To read a fact sheet about these Medicare payment changes, go to www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26.html. Also, a fact sheet on the Learning and Action Network is available at www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-3.html.