End of the Week Mash Up

Author: Jordan Johnson

As January wraps up there are lots to keep up with and changes. This an election year, so expect things to move fast and get done. This is especially true if it is related to healthcare, as that is the top issue in this election. With that said, if there are pending Alternative Payment Models and/or healthcare related initiatives, look for them to move.

Waste

This will be a top focus. Many systems and hospitals are currently developing strategies for reducing waste. This involves multiple variables but reducing cost will be the name of the game in 2020 and beyond. In order to be successful in these efforts, doing things differently will be required— transformation.

Clinical variation and operational opportunity must be done with unique attention to individual service lines to ensure that the unique variables are accounted for and assessed. This is the major limitation of the big vendors who look at more of a “one size fits all approach.” People hear the word “waste” and immediately think consolidation, layoffs or FTE dial-back. This is not true, and that stigma must be overcome. Penalties, value-based care and transparency through data will be the main drivers away from fee-for-service. Data will indicate opportunity.

While optimizing and reducing waste, facilities must also look for growth mechanisms and strategies. The areas they are looking are what we would expect given the environment:

• Digital transformation
• Private equity investment
• Geographic expansion
• Mergers and acquisitions
• Restructuring/reorganization
• IPOs

Prior Authorization

As we move forward in value-based care and execute strategies to reduce waste and increase efficiencies, there are still external barriers that feed the waste and inefficiencies. CMS and has taken notice and will be addressing one of them—prior authorizations. America’s Health Insurance Plans (AHIP) is rolling our Fast Path, that hopes to speed up and automate the process. This can be expedited even further by not utilizing “centralized authorization” and using service line experts. Front end investment equals overall savings.

Medicaid Caps

CMS has now made it available for states seeking greater flexibility and control over their Medicaid programs. The program is called Health Adult Opportunity. This will give states, if they choose it, the opportunity to propose commonly requested authority for participating populations, including the ability to:

• Adjust cost-sharing requirements to incentivize high value care.
• Align benefits more closely to what is available through a commercial insurance benefit package.
• Improve negotiating power to lower drug costs by adopting a closed formulary like those provided in the commercial market (see section below for more detail).
• Make timely programmatic adjustments without additional federal approval.
• Apply additional conditions of eligibility which support the objectives of the program.
• Deliver care through innovative delivery systems.
• Waiving retroactive coverage and hospital presumptive eligibility requirements.

CMS argues the changes are necessary to ensure Medicaid remains solvent and sustainable. By 2027, CMS expects to spend more than $1 trillion on Medicaid, representing 3.3 percent of gross domestic product.

Interoperability

Federal policy leaders continue to take shots at industry giant Epic and its opposition to proposed data-sharing regulations. Epic has been opposed to the new proposed rule by the office of the National Coordinator for Health IT. Seema Verma Said Wednesday:

"The disingenuous efforts by certain private actors to use privacy as a pretext for holding patient data hostage is an embarrassment to the industry," Verma said while speaking at the Centers for Consumer Information and Insurance Oversight’s (CCIIO’s) Industry Day. "We will not waiver in ensuring that patients enjoy full ownership of their data," Verma said. "Providers don’t own a patent’s data and must give it to their patents," she said.

This came off the heels of Secretary Azar’s comments on Monday of Epic’s “scare tactics.” Data cannot be held hostage to make the advancements that CMS expects to see. Many of the decision in value based care and APMs like the OCM and RO-APM are data dependent. Patients need access to their data and their data must be transferable and available across provider systems. As things currently stand, “the fact that we haven’t had any interoperability requirements means that EHR manufacturers are in control of who gets to see what data and under what circumstances.