What to Expect with Health Reform 2.0?

Ronald BarkleyOncology Care Model, Value-based Care

The Uncertain Future of the ACA

On January 20th, Donald J. Trump will become the new Chief Executive Officer of the U.S. and will most likely make good on his promise to repeal the Patient Protection and Affordable Care Act (“ACA” or “Obamacare”). And given the makeup of the 115th Congress, full repeal or, at the minimum, significant modifications are basically assured.

Assuming its repeal/significant modification, the ACA will be replaced with something. The ACA is too engrained in U.S. health policy to simply be abandoned with no substitute. Mr. Trump will be looking to a triumvirate of key leaders to determine what replacement will consist of and how it will work: Vice President-elect, Mike Pence; Dr. Tom Price, Secretary-designate of Health & Human Services and Speaker of the House, Paul Ryan. The three have served in the House of Representatives together for over a decade. They voted for repeal of the ACA on numerous occasions and supported the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) that replaced the sustainable growth rate (SGR) formula. Now they’re center stage in defining the next iteration of U.S. Healthcare policy — Health Reform 2.0.

Cost containment will be the predominant theme of Health Reform 2.0. And reductions in Medicare spending will be a key driver. Healthcare makes up 31% of the federal government’s expenditures — double what’s spent for defense and well above Social Security — so federal policymakers will be looking for ways to reduce the federal healthcare “spend,” especially for Medicare, which adds almost 10,000 new beneficiaries daily. The notion of privatizing Medicare using an insurance voucher program will be entertained. Another dominant theme of Health Reform 2.0 will be that regulatory oversight of healthcare should be the role of governors and state legislatures with less involvement of the federal government.

Providers with a high proportion of Medicare patients — oncologists for example — can anticipate continued downward pressure on Medicare reimbursement, with the off-setting notion that shifting from volume-based to value-based payments will keep everyone somewhat whole financially.

What About CMMI, MACRA and OCM?

The Center for Medicare & Medicaid Innovation (CMMI) is funded through the ACA. Under Health Reform 2.0, what will become of CMMI and its various alternative payment programs, such as Accountable Care Organizations (ACO), Bundled Payment for Care Improvement (BPCI), the Oncology Care Model (OCM) and other value-based/alternative payment initiatives that have consumed a considerable amount of time and attention by provider organizations over the past several years? Will CMMI simply be defunded and closed down?

Some insights can be garnered from MACRA, which was bipartisan-supported legislation that validated Congressional receptivity to the notion of value-based care. CMMI’s various alternative payment programs are viewed as being value-based care initiatives, thus CMMI programs would appear to be consistent with the purpose of MACRA. In fact, the “at risk” programs of CMMI qualify as Advanced Alternative Payment Models under MACRA. Further, we understand that at a recent meeting of GOP Congressional leaders, a favorable view was expressed with regard to CMMI and its value-based/alternative payment model initiatives. CMMI as a vehicle for carrying out MACRA may be CMMI’s redeeming value under Health Reform 2.0.

In addition, the Health Care Transformation Task Force issued a December 6 letter urging the new Administration and Congress “to continue using CMMI or a comparable entity to help develop competitive payment models based on value.” The Health Care Transformation Task Force is an industry consortium consisting of high-profile and influential patient organizations, payers, providers and purchasers assembled to align private and public sector efforts to accelerate the pace of health care delivery system transformation (www.hcttf.org).

Given that CMMI and its programs are in sync with MACRA and given the expressions of interest in seeing CMMI (or similar) and value-based programs continued, it is likely that alternative payment/value-based programs will be incorporated into the fabric of Health Reform 2.0. For participating oncologists, that includes continuation of the Oncology Care Model (OCM).

What Does This Mean for My Practice?

For now, and until you hear something specific to the contrary, it should be business as usual for your practice.

Health Reform 2.0 will result in a new direction for national health policy, but much of the focus will be on big picture financing of care: reigning in Medicare expenditures; affordability for the patient/consumer; re-visiting the role of health insurers in general and the ACA health exchanges in particular. As this plays out during 2017, providers could experience disruption in insurance coverage for some resulting in heightened patient ability-to-pay issues, but otherwise there is not enough currently known about the nature of Health Reform 2.0 to which you can react.

CMMI and its alternative payment/value-based programs will likely survive, so OCM Participants can expect little if any changes in the OCM program under Health Reform 2.0. MACRA will remain intact under Health Reform 2.0, so prepare for MACRA compliance commencing January 1 — either under the Merit-Based Incentive Payment System track or the Advanced Alternative Payment Model track (note that very few, if any, oncologists will qualify for the APM track, unless electing OCM 2-sided risk as of January 1).

Like you, we will by paying close attention to the coming developments with Health Reform 2.0 and implications for oncology practices. Contact us today if you would like to be contacted or to ensure you are included on our mailing list.