红领巾瓜报 Insights: Your source for healthcare news, ideas and analysis.
红领巾瓜报 Insights 鈥� including our new podcast 鈥� puts the vast depth of 红领巾瓜报鈥檚 expertise at your fingertips, helping you stay informed about the latest healthcare trends and topics. Below, you can easily search based on your topic of interest to find useful information from our podcast, blogs, webinars, case studies, reports and more.
Continuing our discussion from Part 1 of this series, recent rule changes proposed by the Centers for Medicare and Medicaid Services (CMS) will enable regulatory and statutory expansion of behavioral health services and providers. This webinar focused on how those changes will impact the already strained workforce, and the corresponding impacts on population health, value-based care, and the needs of special populations. Experts dove deeper into approaches health systems may adopt to handle workforce shortages while expanding access.
Learning Objectives:
Understand how CMS rule updates on behavioral health services will help expand needed care for Medicare recipients and dual eligible populations.
Create strategies for addressing the 2023 CMS rule updates to benefit employers and delivery systems toward improving whole health outcomes and reducing behavioral health workforce shortages.
This week, our In Focus section continues analysis and insights from 红领巾瓜报 (红领巾瓜报) and its affiliate The Moran Company on recent Medicare payment and policy developments. Today, we review the policy changes that the Centers for Medicare & Medicaid Services (CMS) released August 1, 2023, for the fiscal year (FY) 2024 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) final rule ().
This year鈥檚 IPPS final rule includes several important policy changes that will alter hospital margins and change administrative procedures beginning October 1, 2023. More specifically, the IPPS rule increases payments to hospitals, enhances the wage index policy for rural hospitals, reduces Medicare disproportionate share payments, and modifies the New Technology Add-on Payment (NTAP) program.
Key provisions of the FY 2024 Hospital IPPS and LTCH Final Rule
We highlight four policies that will significantly affect Medicare beneficiaries, hospitals, health systems, payers, and manufacturers:
Hospital market basket update and the inpatient standardized amount
CMS鈥檚 Medicare 2024 IPPS final rule will increase payments to acute care hospitals by an estimated $2.2 billion from 2023. The primary driver of this increase is CMS鈥檚 3.1 percent increase in the annual update to inpatient operating payment rates. The update is the sum of the hospital market basket update of 3.3 percent and a statutorily required 0.2 percentage point reduction for productivity growth.
红领巾瓜报/Moran analysis: Between the time CMS released the 2024 proposed IPPS rule and the final rule, the inpatient payment update for 2024 increased to 3.1 percent from 2.8 percent. This spike occurred because of the effects of an increase in estimated inflation on the cost of a standard basket of hospital goods (hospital market basket) throughout 2022 and 2023. Although economy-wide inflation slowed in mid-2023, inflation was higher in late 2022 and early 2023鈥攖he period in which the market basket is measured for the final rule.
For beneficiaries, increasing payment rates eventually will lead to a higher Medicare inpatient deductible and greater out-of-pocket costs for many other services. For hospitals and healthcare systems, payers, and manufacturers, a payment increase of 3.1 percent falls below economy-wide inflation (5鈭�6 percent in recent months).
Despite the publicized 3.1 percent payment update for 2024, after factoring in various policy adjustments the actual change between 2023 and 2024 to inpatient payments per case will be roughly 2 percent. The primary reason per-case payments will increase only 2 percent is a budget-neutrality adjustment that CMS finalized for 2024 to account for hospital wage index reclassifications. This adjustment will reduce payments to all hospitals by more than 1 percent to neutralize the added program spending associated with payments to hospitals that choose to reclassify into higher paying wage index areas. The final rule states, 鈥淸T]he geographic reclassification budget neutrality adjustment is significantly larger than in prior years.鈥�
Medicare Disproportionate Share Hospital Payments
CMS finalized two Medicare disproportionate share hospital (DSH)-related policies for 2024. First, DSH payments and Medicare uncompensated care payments combined will decrease in FY 2024 by approximately $957 million. Second, CMS finalized its proposal to limit the number of patient days included in the Medicare DSH calculation to only those days when the patient鈥檚 Medicaid Section 1115 Demonstration health insurance covers inpatient hospital services or the patient鈥檚 premium assistance program covers 100 percent of the premium cost for patients who buy health insurance that covers inpatient hospital services, if the patient is ineligible for Medicare Part A.
红领巾瓜报/Moran analysis: CMS鈥檚 $957 million reduction in DSH and uncompensated care payments stems from the agency鈥檚 estimate of the percentage of individuals without insurance in the United States. Between the 2024 proposed and final rules, CMS estimates the percentage of individuals without insurance will decline from 9.3 percent to 7.7 percent in 2023 and from 9.2 percent to 8.5 percent in 2024. As a result, the pool of uncompensated care dollars available to hospitals for 2024 was reduced from roughly $6.7 billion to $5.9 billion.
CMS鈥檚 estimated decline in the rate of uninsured beneficiaries is somewhat surprising given the common projection that Medicaid enrollment will drop following the end of Medicaid鈥檚 COVID-19 related continuous coverage policy. However, 红领巾瓜报/Moran colleagues believe state-level Medicaid enrollment changes will vary in the year ahead. Consequently, hospitals located in states where levels of Medicaid enrollment are sustained will benefit from CMS鈥檚 uninsured rate estimates and hospitals in states where Medicaid enrollment drops will not.
With regard to the Section 1115 demonstration related DSH policy, hospitals located in states that have not expanded Medicaid under the Accountable Care Act and instead rely on Section 1115 Demonstrations to expand health coverage, are likely to receive lower DSH payments. In addition to the Medicare DSH payment adjustments, reductions in the Medicaid DSH program are scheduled to begin October 1, 2023. The $8 billion reduction in FY 2024 is the first time CMS has planned to make cuts in the program.
Hospital Wage Index Adjustments
CMS finalized two wage index policies for FY 2024. First, CMS will extend the low-wage index hospital policy, which boosts the wage index of hospitals in geographic areas with low wages relative to other areas. Second, CMS finalized a policy to begin including labor data from urban hospitals that choose to reclassify as providers in rural areas to maximize their payment into the calculation of rural wage index areas.
红领巾瓜报/Moran analysis: These two wage index policies for FY 2024 will increase payment to rural hospitals. Under the first policy, hospitals with wage indexes below 0.8667 (the 25th percentile across all hospitals) will automatically receive an increase in their wage index and therefore their payment rates for inpatient cases. Under the second policy, the inclusion of labor data for geographically urban hospitals that choose to reclassify into rural wage index areas within the calculation of state-level rural wage indexes and the state-level rural floor will increase payments to rural hospitals in many states. The overall impact of both proposed wage index policy changes for FY 2024 will be an increase in inpatient payment rates for rural hospitals.
New Technology Add-On Payments (NTAP)
Citing the increased number of applications for NTAP over the past several years and noting the need for CMS staff to have time to review and analyze the applications, CMS finalized two changes to the NTAP application requirements. First, CMS will require that all applicants have a complete and active U.S. Food and Drug Administration (FDA) market authorization request in place at the time of NTAP application submission, if not already FDA approved. The FDA鈥檚 acceptance letter will serve as proof of a full and complete application. In addition, CMS proposes to move the FDA approval deadline from July 1 to May 1, beginning with applications for FY 2025.
红领巾瓜报/Moran analysis: The stated aim of these CMS policy changes is to 鈥渋ncrease transparency, facilitate public input, and improve the review process.鈥� As a result of these modifications, products will need to be on the market longer before the NTAP payment begins, and fewer products will be eligible for the three full years of NTAP payments. Taken together, hospitals will have a shorter NTAP payment window for most products. The further tightening of FDA application and approval requirements runs counter to the efforts of various stakeholders to establish more flexible or additional NTAP application windows.
红领巾瓜报 and The Moran Company collaborate to monitor legislative and regulatory developments in the inpatient hospital space and assess the impact of inpatient policy changes on the hospital sector. 红领巾瓜报鈥檚 Medicare experts interpret and model inpatient policy proposals and use these analyses to help clients develop their strategic plans and their comments on proposed regulations. Moran replicates the methodologies CMS uses in setting hospital payments and models alternative payment policies to help support stakeholder comment letters and strategies. Moran also assists clients with modeling diagnosis-related group reassignment requests and to support innovative NTAP applications.
For more information or questions about the policies described above, contact our experts below.
This week, our In Focus section is the second in a summer series of analysis and insights from 红领巾瓜报 (红领巾瓜报) on recent Medicare payment and policy developments. This week we dig deeper into the potential changes to the that were included in the 2024 proposed rule released earlier this month. Specifically, we highlight the impact these modifications could have on financial and operational decisions across the healthcare industry.
The proposed rule builds on the changes CMS finalized last year with the goal of increasing participation in the MSSP. The recommended changes are designed to appeal to more clinicians who treat a high proportion of underserved individuals. CMS estimates that the proposal will increase participation in MSSP by 10鈭�20 percent. These changes are technical in nature and include:
Expanding the physician lookback window for beneficiary assignment (also known as the pre-step) for primary care service to 24 months from 12 months
Adding a third step to the claims-based beneficiary assignment methodology to recognize the role of nurse practitioners (NPs), physician assistants (PAs), and clinical nurse specialists (CNSs) in delivering primary care services
Modifying the definition of 鈥渁ssignable beneficiary鈥� to reflect the changes above
The overall impact of these modifications, which augment the existing methodology, is to increase the number of beneficiaries assigned to accountable care organizations (ACOs) under MSSP. More assignable beneficiaries could mean:
More ACOs will meet minimum beneficiary requirements.
Changes in assignable population may affect the hierarchical condition category (HCC) risk scores for the national assignable population, as well as the factors used to normalize risk scores and other risk adjustments.
Changes in population distribution within regions that result in adjustments to ACO market share, benchmark trends, and update factors.
For ACOs participating in multiple programs, expanded assignment rules for MSSP, combined with the MSSP superseding other programs in assignment, may have downstream effects on programs in terms of assignment and performance.
Following is a more detailed explanation of the proposed changes.
24-Month Lookback for Primary Care Services
Extending the lookback for primary care services with a physician to 24 months from 12 will allow providers to capture additional primary care services codes related to the COVID-19 public health emergency (PHE) for benchmark and performance years. If the assignment window for a benchmark or performance year includes any month(s) during the PHE, then the additional primary care services codes must apply to all months in that window.
Three-Step Assignment Process
CMS plans to update its current two-step claims-based beneficiary assignment process to a three-step process, which would be effective for performance years beginning January 1, 2025. The proposed third step only would apply to beneficiaries who do not meet the pre-step requirement contingent upon whether they received at least one primary care service during the expanded window for assignment from an ACO-participating primary care or specialist physician or received at least one primary care service from a non-physician ACO healthcare professional during the 12-month assignment window.
Assignable Beneficiary Definition
The proposed rule includes updates to the definition of an assignable beneficiary to reflect the expanded 24-month lookback window for assignment and the new third step of a primary care service within the 12-month assignment window from a non-physician ACO professional (i.e., NP, PA, CNS).
The table below compares the current and proposed assignment processes.
Comparison of the Two- and Three-Step Processes
Step
Current Two-Step Beneficiary Assignment Process
Proposed Three-Step Beneficiary Assignment Process
Pre-Step Requirement to Identify Assignable Beneficiary
CMS identifies beneficiaries who received at least one primary care service from a primary care physician or a physician with a primary specialty designation participating in an ACO in the 12-month lookback window. CMS determines whether these individuals are eligible for assignment to an ACO.
CMS identifies beneficiaries who received at least one primary care service from a primary care physician or a physician with a primary specialty designation participating in an ACO in the 24-month lookback window.
Step 1
Determine if beneficiaries received the plurality of their primary care services from primary care physicians, NPs, PAs, and CNSs in the participating ACO.
No change
Step 2
If not assigned in Step 1, determine whether beneficiaries received the plurality of primary care services from specialists in the participating ACO.
No change
Step 3
Not applicable
For beneficiaries not assigned through Steps 1 and 2:路 Determine if beneficiary received at least one primary care service with a non-physician ACO professional (e.g., NP, PA, or CNS) in the ACO during the applicable 12-month assignment window; AND路 Confirm beneficiary received at least one primary care service with a primary care physician or specialist who is an ACO professional in the ACO and who is a primary care physician or a non-physician ACO professional (i.e., NP, PA, CNS) during the applicable 12- month expanded window for assignment.
Financial Considerations
The proposed rule outlines that the expenditure lookback will remain 12 months. With a 24-month primary care service window and a 12-month expenditure lookback, ACO revenues could change. As a result, minimum savings rates could drop and the per-member per-month amount might change. In addition, the extended lookback could affect the regional average risk-adjusted spending, expenditure thresholds, and more.
Enhanced MSSP Track
CMS is seeking comment on a new track in MSSP with a higher level of risk and potential reward (e.g., somewhere between 80鈭�100 percent). The purpose of the new MSSP track is to encourage ACOs that would not have otherwise participated in MSSP because of limitations on upside rewards. Higher potential rewards may also incentivize ACOs to develop new strategies, focus on specialty care integration, and reduce healthcare fragmentation to achieve savings.
CMS is seeking comment on the following:
Policy/model design elements that could be implemented so that CMS could offer a higher risk track without increasing program expenditures
Approaches to protect ACOs that serve high-risk beneficiaries from expenditure outliers and reduce incentives for ACOs to avoid high-risk beneficiaries
The impact that higher risk sharing could have on care delivery redesign, specialty integration, and ACO investment in healthcare providers and practices
The 红领巾瓜报 Medicare and value-based care experts will continue to analyze these proposals alongside other policy and reimbursement changes that affect Medicare providers. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support clients that intend to draft comment letters on this proposed rule. For more information or questions about these policies and other changes in the 2024 Medicare physician fee schedule proposed rule, contact our experts below.
This week鈥檚 In Focus section is the first in a summer series of analysis and insights from 红领巾瓜报 (红领巾瓜报) on recent Medicare payment and policy developments. Our series kicks off with a big-picture take on the slew of regulations the Centers for Medicare & Medicaid Services (CMS) has released over the past two weeks. In future posts, we will dig deeper into several of the planned changes to highlight their potential impact on financial and operational decisions across the healthcare industry.
In July, CMS published three significant proposed Medicare rules for calendar year (CY) 2024: the , which includes proposed changes to the Medicare Shared Savings Program (MSSP); a proposed remedy to for CY 2018鈭�2022; and the . Comments on these proposals are due to CMS in early September.
红领巾瓜报鈥檚 experts note several trends across these three Medicare payment regulations:
Health equity remains a significant focus of CMS and the Biden Administration.
The agency is expanding its coverage of behavioral health services under Medicare and enhancing payment and access for these services.
The long-term focus of CMS continues to be the transition toward value-based care.
Medicare is incrementally moving toward supporting care that is delivered where and how Medicare beneficiaries prefer, for example moving away from reimbursing largely for face-to-face services and supporting reimbursement for telehealth services in more situations.
CMS is creating pathways for reimbursement for a broader range of clinicians and caregivers who are addressing Medicare beneficiaries鈥� care needs.
CMS continues its efforts to improve hospital price transparency with policies aimed at encouraging providers to publicly report data.
Medicare policy experts at 红领巾瓜报 and is affiliate, The Moran Company, summarize details on these regulations below. These colleagues work collaboratively to monitor legislative and regulatory developments in the physician, 340B, and outpatient and ASC policy arenas and to assess the impact of changes in these reimbursement systems. 红领巾瓜报鈥檚 Medicare experts interpret and model policy proposals and use these analyses to assist clients in developing their strategic plans and comment on proposed regulations. Moran annually replicates the methodologies CMS uses to set payments and recommends alternative payment policies to help support its clients鈥� comments on various rules and to help clients understand the impact of specific policies. In addition, 红领巾瓜报鈥檚 other partner companies, including Wakely and Leavitt Partners, are monitoring these issues from their unique perspectives.
The Medicare PFS establishes payments and policies for physicians and other healthcare professionals. By statute, PFS payment rates will decline by 1.25 percent from CY 2023 to 2024. However, when coupled with budget neutrality adjustments for other policy changes, the proposed PFS conversion factor will decline by 3.34 percent. The impact of this reduction will vary by physician specialty.
Behavioral Health Services: CMS implements provisions in the Consolidated Appropriations Act (CAA), 2023, which would allow Medicare coverage and payment for the services of marriage and family therapists (MFTs) and mental health counselors (MHCs). CMS proposes to classify addiction counselors who meet certain requirements as MHCs. The rule outlines how these practitioners can enroll in Medicare and bill for services starting January 1, 2024. CMS is establishing new codes and payment for psychotherapy for crisis services and proposed refinements to Health and Behavior Assessment/Intervention codes to allow additional practitioners to bill for these services and to increase the valuations of timed behavioral health services. CMS seeks comment on ways to expand access to behavioral health services. CMS specifically is looking for information on digital therapies, remote physiologic monitoring, and remote therapeutic monitoring services.
Evaluation and Management (E/M) Office Visit Services: CMS proposed to implement separate payment for an add-on billing code to account for the additional resources associated with primary care or ongoing care related to a patient鈥檚 single serious or complex chronic condition. This complexity-based add-on code may be reported with all office and outpatient (O/O) and evaluation and management (E/M) visit level codes, and CMS estimates it will be reported for 38 percent of all O/O E/M visits initially. This estimate contributes to a significant portion of the relative value unit (RVU) budget-neutrality adjustment applied to the conversion factor. CMS also requests comments on evaluating E/M services more regularly and comprehensively including ways to improve data collection and methodologies to establish more timely improvements and accurate payments for E/M and other services.
Telehealth: CMS proposes several additions to the list of covered telehealth services and implements the various telehealth provisions included in CAA 2023, such as allowing the patient鈥檚 home to serve as an originating site. This provision would expand the scope of permitted telehealth providers and allow rural health clinics and federally qualified health centers (FQHCs) to provide telehealth services until December 31, 2024. In addition, CMS proposes opportunities for teaching physicians and medical residents to continue to use telehealth services to meet the supervision requirements via telehealth.
Caregiver Training Services: CMS proposed a new payment for practitioners who train caregivers to implement a treatment plan and support patients with diseases like dementia.
Payment for Community Health Integration, Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation Provided by Social Workers, Community Health Workers, Care Navigators, and Peer Support Specialists: CMS is establishing opportunities for these services to be paid separately and account for the specific resources necessary to provide these services.
Dental Services: Although Medicare generally is prohibited from paying for dental services, CMS proposed to pay for certain dental services related to the treatment of head and neck cancers and when linked to other covered services used to treat cancer.
Discarded Drugs: The proposed rule continues the implementation process for a statutory requirement that drug and biological manufacturers refund amounts paid for discarded single-use prescription drug vials. CMS provides the list of products for which refunds would have been due in 2021, and the number of products included is expected to increase over time.
340B and Outpatient Offset Proposed Rule
In the 340B proposed rule, CMS proposed retrospective payments to 340B hospitals for incorrect payments made in CYs 2018鈭�2022. After extensive litigation and a Supreme Court ruling, CMS will return to paying 340B hospitals for drugs using the formula of the average sales price (ASP) +6 percent, rather than the formula of the ASP 鈭�22.5 percent. In this proposed rule, CMS proposes to correct past underpayments to 340B hospitals by making lump sum payments to affected 340B hospitals. These retrospective payments are estimated to amount to $9 billion, and we anticipate payments will be made to hospitals at the beginning of CY 2024.
In addition, CMS proposed a corresponding prospectively budget neutrality offset to the 340B spending increase that will reduce hospital outpatient payments for non-drug outpatient services by 0.5 percent each year beginning in 2025. Specifically, CMS proposes to maintain this reduction until $7.8 billion in spending has been offset, which it estimates will take 16 years. The impact of this policy on the hospital industry will be significant and will create groups of winners and losers. Winners will include 340B hospitals, despite the fact that the outpatient offset will also affect their payment rates. Losers will include non-340B hospitals, particularly if their service mix is heavily focused on outpatient surgical services. Overall, the industry will observe a reduction in outpatient spending of roughly $300 million to $600 million per year for each of the 16 years the policy is in place.
Hospital Outpatient Proposed Rule (CY 2024)
Under the OPPS proposed rule, CMS would update payments for outpatient and ASC services by 2.8 percent in CY 2024 from CY 2023. This change will increase payments for hospital outpatient services by $1.9 billion and for ASC services by $170 million. In addition, if the 340B proposal is finalized, the 0.5 percent payment offset would not reduce CY 2024 OPPS payment rates but would begin reducing outpatient payments in CY 2025.
Behavioral Health: CMS proposes to establish the Intensive Outpatient Program (IOP) for behavioral health services provided to Medicare beneficiaries. The IOP proposal addresses one of the main gaps in behavioral health coverage in Medicare and promotes access to related services. CMS will define IOP as a distinct outpatient program of psychiatric services provided to individuals with acute mental illness or substance use disorder. Services could be provided at hospital outpatient departments, community mental health centers, FQHCs, and RHCs. Further, the agency proposed to establish two IOP service codes for each provider type鈥攐ne for days with three services per day and another with four or more services per day.
Price Transparency: CMS proposes to increase the rigidity of its price transparency reporting program in an effort to improve hospital industry compliance with the reporting of hospital charge data to the public.
The 红领巾瓜报 Medicare team and reimbursement experts will continue to analyze these proposal alongside other policy and reimbursement changes that affect Medicare providers. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support clients that intend to draft comment letters on this proposed rule.
In light of the recent Medicare regulatory and statutory expansion of behavioral health services and providers, this webinar focused on how those changes will impact the demand, delivery, and availability of behavioral health services. Experts covered how changes in Medicare coverage will affect different behavioral health provider types, improve access to opioid/SUD treatment, and improve flexibility with telehealth/digital service delivery. At a time when behavioral health access is strained, and workforce shortages are reported nation-wide, this new Medicare coverage (expected rules to be announced soon) presents both a significant opportunity as well as a challenge to the delivery system.
Learning Objectives:
Understand the recent Medicare regulatory and statutory changes impacting behavioral health providers, services, and reimbursement.
Anticipate changes in demand for behavioral health services and the impact on your local market.
Plan for the impact of regulation changes on demand for opioid/SUD treatment and telehealth/digital service delivery.
This week, our In Focus section reviews the projected healthcare expenditure and enrollment data from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary, published June 14, 2023. The Office of the Actuary provides annual updates to historical and projected National Health Expenditure data on Medicare, Medicaid, CHIP, and other public insurance programs, as well as commercial healthcare insurance.
CMS projects that the average annual growth for national healthcare spending from now through 2031 will be 5.4 percent. CMS estimated that the number of insured individuals in the United States was projected to reach a high of 92.3 percent in 2022 and would decrease to 90.5 percent by 2031. CMS projects 93.6 million Medicaid and CHIP members will account for more than $1.2 trillion in annual spending in 2031 and that 76.4 million Medicare beneficiaries will account for more than $1.8 trillion in expenditures that year. A summary of other key takeaways from the actuarial report follows.
Enrollment Projections
Approximately 92 million people were enrolled in Medicaid and CHIP programs in 2021. Enrollment is projected to have reached a high of 97.6 million in 2022 and is expected to fall between 2023 and 2026 because of Medicaid redeterminations. CMS projects the largest loss in 2024, with 8 million people leaving Medicaid and CHIP that year alone. By 2026, enrollment is projected to hit a low of 89.7 million and start to rise back up in the subsequent years until reaching 93.6 million enrollees in 2031.
Table 1. Historical and Projected Medicaid/CHIP Enrollment (in Millions)
Figure 1. Historical and Projected Medicaid/CHIP Enrollment (in Millions)
Medicare enrollment is projected to continue growing steadily. CMS estimates that Medicare beneficiaries totaled 63.6 million in 2022. By 2031, Medicare enrollment is expected to climb to 76.4 million.
Expenditure Projections
Medicaid expenditures are expected to grow by 5 percent on average in 2022鈭�2031. In 2022, the Medicaid annual growth rate was projected to be 鈭�2.1 percent. Following the public health emergency unwinding, average expenditure growth would pick up to 5.6 percent in 2025鈭�2031.
CMS estimated that total Medicaid and CHIP annual spending in 2022 was $828.4 million; by 2031, it is projected to hit $1.2 trillion. For context, private health insurance is projected to reach nearly $2.1 trillion in 2031.
Table 2. Historical and Projected Medicaid/CHIP Expenditures (in Billions)
Figure 2. Historical and Projected Medicaid/CHIP Expenditures (in Billions)
Medicare spending is projected to grow to more than $1.8 trillion in 2031 from $944.2 million in 2022. During this time, average annual expenditure growth is projected to be 7.5 percent. In 2022, spending growth dropped to 4.8 percent compared with 8.4 percent in 2021 because fee-for-service beneficiaries were using fewer emergency department services and as a result of reinstated payment rate cuts associated with the Medicare Sequester Relief Act of 2022.
Medicaid Expenditure Projections by Category
CMS provides a historical and projected breakdown of expenditures by category for Medicaid only (CHIP is bundled with Department of Defense and other public spending). Table 3 summarizes the projected change in annual expenditures for several categories of services and other expenditures. It also shows each category鈥檚 percentage contribution to total Medicaid expenditures and the compounded annual growth rate (CAGR) in 2021鈭�2031 for each category of spending. Hospital spending, personal care/residential/other, and physician/clinical expenditures are projected to continue to be the largest contributors to overall Medicaid expenditures, together equaling approximately 65 percent of total expenditures in 2021 and a projected 66 percent in 2031.
Table 3. Historical and Projected Medicaid-Only Expenditures by Category, 2021-2031 (in Billions)
Innovations in Publicly Sponsored Healthcare: How Medicaid, Medicare, and Marketplaces Are Driving Value, Equity, and Growth
Pre-Conference Workshop: October 29, 2023 Conference: October 30鈭�31, 2023 Location: Fairmont Chicago, Millennium Park
红领巾瓜报 has announced the preliminary lineup of speakers for its sixth annual conference, Innovations in Publicly Sponsored Healthcare: How Medicaid, Medicare, and Marketplaces Are Driving Value, Equity, and Growth.
Hundreds of executives from health plans, providers, state and federal government, investment firms, and community-based organizations will convene to enjoy top-notch content, make new connections, and garner fresh ideas and best practices.
A pre-conference workshop, Behavioral Health at the Intersection of General Health and Human Services, will take place Sunday, October 29.
Confirmed speakers to date include (in alphabetical order):
Jacey Cooper, State Medicaid Director, Chief Deputy Director, California Department of Health Care Services
Kelly Cunningham, Administrator, Division of Medical Programs, Illinois Department of Healthcare and Family Services
Karen Dale, Chief Diversity, Equity, and Inclusion Officer, AmeriHealth Caritas
Peter Lee, Health Care Policy Catalyst and former Executive Director, Covered California
John Lovelace, President, Government Programs, Individual Advantage, UPMC Health Plan
Julie Morita, MD, Executive Vice President, Robert Wood Johnson Foundation
Anne Rote, President, Medicaid, Health Care Service Corp.
Drew Snyder, Executive Director, Mississippi Division of Medicaid
Tim Spilker, CEO, UnitedHealthcare Community & State
Stacie Weeks, Administrator/Medicaid Director, Division of Health Care Financing and Policy, Nevada Department of Health and Human Services
Lisa Wright, President and CEO, Community Health Choice
Publicly sponsored programs like Medicare, Medicaid, and the Marketplaces are leading the charge in driving value, equity, and growth in the U.S. healthcare system. This year鈥檚 event will highlight the innovations, initiatives, emerging models, and growth strategies designed to drive improved patient outcomes, increased affordability, and expanded access.
Early bird registration ends July 31. Group rates, government discounts, and sponsorships are available.
红领巾瓜报 is pleased to welcome new experts to our family of companies in April 2023. This diverse team brings significant expertise in Medicare, Medicaid, regulatory strategies, and managed care, strengthening 红领巾瓜报鈥檚 capabilities in healthcare consulting across areas like actuarial support, regulatory compliance, and strategic leadership in Medicare Advantage and Medicaid programs.
This week our In Focus section reviews the Illinois Healthcare Transformation 1115 Waiver Extension request, posted for review on May 12, 2023.
In pursuing this waiver extension, Illinois joins a growing list of states taking advantage of new Centers for Medicare & Medicaid Services (CMS) policy flexibilities to address health-related social needs (HRSNs) through Medicaid and test community-driven initiatives that are focused on improving health equity, improving access to care, and promoting whole-person care.
The Illinois waiver incorporates two of the most significant new opportunities in the CMS demonstration waiver flexibilities by proposing to incorporate housing supports for people who are experiencing or at risk of homelessness. The waiver also would extend community reintegration services for justice-involved adults and youths for up to 90 days before their release from incarceration. For a full list of proposed benefits and demonstrations, see Table 1.
Table 1. Summary of Illinois Medicaid 1115 Waiver Extension
Source: Illinois Department of Health and Family Services. .
The Illinois waiver represents an unprecedented opportunity to demonstrate the long-term, positive impact of providing HRSN services to achieve health equity and create a sustainable, community-driven system for delivering those services. The demonstration proposes to offer a range of HRSN services that are focused on the unmet needs of people who are homeless and housing insecure, are justice-involved, have behavioral health conditions, are pregnant, are unemployed, are food insecure, and/or have been exposed to violence or are at risk of violence with the goal of eliminating health disparities.
The waiver projects a five-year total of $4.4 billion in HRSN services expenditures and another $800 million in HRSN-related infrastructure, indicating Illinois鈥� long-term commitment to healthcare transformation and to building an equitable, accessible, and high-quality delivery system.
Policy crossroads and the end of the public health emergency due to COVID-19
This is part of a three-part series on significant implications of the end of the Public Health Emergency (PHE).
The end of the Public Health Emergency on May 11, 2023 is likely to mark a transitional point in the rapidly evolving arena of virtual care services and not a dramatic end of coverage. Coverage of virtual care services will continue to evolve significantly over the next five years given the exponential growth in the public鈥檚 awareness of, and comfort with, these services — all hastened by the COVID-19 Federal Public Health Emergency.
The U.S. Congress and the Centers for Medicare and Medicaid Services (CMS) used its authority during the PHE to significantly expand Medicare coverage for virtual care services, covering telehealth visits in urban areas and from patient鈥檚 homes. In addition, Medicare began covering a wide range of clinical services virtually such as behavioral health and physical therapy; it also expanded coverage for different service delivery modalities to include audio-only visits. As a result of the changes, Medicare became a leading payer for virtual care nationally between 2020 and 2022. Over this same period, private insurers and state Medicaid programs largely followed Medicare鈥檚 lead by expanding their own virtual care coverage.
One of the consequences of the PHE is that most payers have embraced Medicare鈥檚 basic definitional structure for types of virtual care services. As a part of this typology, virtual care services are divided into two general buckets of services: telehealth visits (physician office visits conducted via audio and video technology), which are typically prohibited by statute in urban areas or a patient鈥檚 home; and Communication Technology-Based Services (CTBS) which can be conducted anywhere. CTBSs include: remote patient monitoring (RPM); virtual check-ins (brief patient-to-clinician exchanges); e-visits (online portal or email visits); and e-consults (clinician to clinician interaction).
With the end of the PHE on May 11, Medicare coverage of virtual care services and coverage offered by other payers will change. The details and scope of this change have many stakeholders concerned and confused. 红领巾瓜报 has a keen sense for which virtual care services may get a new lease on life in the coming months and which are likely to be hotly debated in the years ahead. The one certainty is that the last 3 years have altered the landscape for virtual care services for years to come.
Shift in Virtual Care Landscape
As a result of the statutory geographic limitations and restrictions placed on traditional fee-for-service (FFS) Medicare coverage, use of telehealth services was minimal most of the last decade, with only one-quarter of 1 percent (0.25%) of beneficiaries in FFS Medicare using virtual care services.[1] Even among Medicare Advantage plans and Medicare Accountable Care Organizations (ACOs), neither of which which face the same restrictions, virtual care was utilized very rarely before 2019.
This sluggish use of telehealth was radically altered when HHS used its PHE authority to relax constraints on the use of use virtual care services by Medicare beneficiaries and providers.[2],[3] Among the most consequential changes made by policymakers at the outset of the PHE were:
Enabling telehealth services to be provided anywhere (e.g., urban areas and patients鈥� homes);
Allowing Federally Qualified Health Centers (FQHC) and Rural Health Clinics (RHC) to conduct virtual care services;
Granting various types of clinicians permission to deliver virtual care services;
Enabling new patients to receive virtual care services;
Authorizing audio-only services;
Permitting telehealth services for more than 200 different types of clinical services (e.g., mental health, emergency department, physical and occupational therapy, critical care, inpatient care);
Relaxing HIPPA rules to enable the broad use of smartphones for virtual care.
Due to these policy changes, rates of virtual care skyrocketed during the PHE (Figure 1). In April of 2020 the number of Medicare claims for any type of virtual care service exceeded 9 million, while 2019 the number of these services provided monthly never exceeded 100,000 (Figure 1). On an annual basis, from 2019 to 2021 the number of virtual care visits jumped from roughly 1 million to 39 million and the number of unique beneficiaries receiving these services increased from 300,000 to nearly 12 million.
Figure 1: Number of Virtual Care Service Visits, Number of Unique Medicare Fee-For-Service Beneficiaries, and Number of visits per Utilizer by Month, December 2019 to December 2021.
Source: 红领巾瓜报 analysis of CMS鈥檚 100 percent Medicare Fee-For-Service Claims data for 2019, 2020, and 2021.
The growth of virtual care services has largely been driven by an increase in telehealth visits, but we observe important trends in the use of CTBSs, as well. In late 2021, more than 90 percent of visits were associated with telehealth, while 10 percent were associated with CTBSs. Early in the PHE, all of these service types experienced an initial, abrupt increase in use (Figure 2). By contrast, the growth in the use of remote patient monitoring (RPM) has been continuous since 2020. The growth in use of RPM reflects the general movement of services into patients鈥� homes and has been accelerated by specialist such as cardiologists and endocrinologists beginning to leverage the power of RPM. We expect greater diffusion and use of RPM and other CTBSs in the next five years.
Figure 2: Number of Virtual Care Service Visits for Remote Patient Monitoring, Virtual Check-ins, E-visits, and E-Consultations by Month, December 2019 to December 2021.
Source: 红领巾瓜报 analysis of CMS鈥檚 100 percent Medicare Fee-For-Service Claims data for 2019, 2020, and 2021.
Policies temporarily in place until the end of 2024
During the PHE, Congress made critical long-term changes to Medicare鈥檚 coverage of virtual care services that continued to spur the use of these services and offer access to care for beneficiaries. In 2021, Congress changed the law to permanently allow Medicare beneficiaries to receive behavioral/mental telehealth services regardless of location (urban or rural) and for this care to be available to patients in their own homes.
In 2022, Congress severed the link between the PHE declaration and Medicare coverage policies for virtual care services, extending those benefits through the end of calendar year 2024. We expect that coverage for all telehealth services will receive considerable attention from federal policymakers and stakeholders towards the end of 2024.
Immediate impact of expiring policies
Certain aspects of Medicare鈥檚 virtual care policies will, however, terminate May 11, 2023, when the PHE declaration comes to an end. Several of the expiring policies have a broader impact beyond the Medicare program, affecting patients insured by private payers and State Medicaid programs.
Specifically, when the PHE ends, policymakers will need to address the following anticipated changes:
The Office for Civil Rights (OCR) will return to imposing penalties on providers who violate the provisions of the Health Insurance Portability and Accountability Act (HIPAA) by using public-facing remote communication technologies which are not HIPAA-compliant. This may prohibit the use of some of the most common smartphone-based video conferencing tools for health care visits.
Medicare beneficiaries without an existing relationship with a clinician will be unable to receive CTBSs such as RPM, virtual check-ins, and e-visits.
Providers will no longer be allowed to provide virtual care services across state lines, because most state medical licensure boards will return to pre-PHE policy.
Federal rules from the Drug Enforcement Agency (DEA) may revert to the pre-PHE requirement that clinicians establish a patient-provider relationship in-person before being permitted to prescribe controlled substances for substance use disorder treatment.
Potential policy changes occurring before 2025 As explained earlier, Medicare coverage for many virtual care services will remain in place for the next 19 months. Before the end of 2024, Congress will need to address several policy questions, and among the most widely debated are whether to:
Restore Medicare鈥檚 statutory prohibition on telehealth services being delivered in urban areas or in home settings;
Allow Federally Qualified Health Centers and Rural Health Clinics to provide telehealth services to Medicare beneficiaries; or
Continue to cover audio-only telehealth visits under Medicare.
Lawmakers will look to payers, patients, and providers for feedback before making these policy decisions. Among the most critical pieces of information they will also consider will be the results of the study Congress has required of HHS regarding trends in the use of virtual care. This study鈥檚 final report is due in 2026, which has led some to speculate that Congress will delay action on virtual care coverage policy until then. In the meanwhile, we expect HHS will be assessing the overall volume of virtual care use, who is using which types of services, and the levels of related fraud and abuse.
Looking Ahead
In the United States, our experience during the acute phase of the pandemic demonstrated that patients and providers are more receptive than previously thought to utilizing digital technologies for the delivery of care. This experience may also influence policymakers鈥� decisions about reimbursement and coverage of wearable devices, as well as other cutting-edge tools that rely on artificial intelligence or machine learning.
红领巾瓜报 believes payers and providers alike can take steps now to strategically prepare for the still evolving and growing landscape of digital health care.
Based on the various changes that have occurred in the virtual care environment over the last 3 years, we are intently watching several areas of potential change in the practice of medicine and the ways payers set coverage policy. Below are some of the trends we anticipate in the years ahead:
Continued use of virtual care services at levels observed in 2021.
An expansion of CMS’s programs to protect against fraud and abuse related to virtual care.
Notable growth in the use of RPM, and related services for physical and occupational therapy services.
The proliferation of innovative home-based screening and testing technologies. We anticipate payers will encourage the use of these at-home tests for things like kidney function, liver function, and colorectal cancer screening in order to limit care delivery in higher cost settings.
Growth in 鈥渧irtual-first鈥� insurance plans, where patients are encouraged to use virtual care first – prior to being seen in person. As these plan options expand, we anticipate virtual care use will rise, and reimbursement rates will begin to change.
Virtual care services are primed for additional growth and 红领巾瓜报 is working with a wide variety of payers, providers, and foundations to develop strategies for adapting to state and federal rules and regulations related to virtual care. Changes in this landscape will hinge on research CMS will complete by the end of 2026, and coverage decisions made by states and commercial payers. 红领巾瓜报 is well positioned to assist stakeholders with work in this area and can leverage access to Medicare and Medicaid claims data to conduct health services research to illustrate geographic variations in the use of virtual care.
If you have questions on how 红领巾瓜报 can support your agency before or after the end of the PHE, please contact our experts below.
[2] Centers for Medicare & Medicaid Services. Medicare telemedicine health care provider fact sheet. March 17, 2020. https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet
[3] HHS Administration for Strategic Preparedness & Response (ASPR). https://aspr.hhs.gov/legal/PHE/Pages/default.aspx
This week, our In Focus section reviews the policy changes proposed by the Centers for Medicare & Medicaid Services鈥� (CMS) on April 10, 2023, for the Fiscal Year (FY) 2024 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Proposed Rule (). This year鈥檚 IPPS Proposed Rule includes several important policy changes that will alter hospital margins and change administrative procedures, beginning as soon as October 1, 2023.
Key provisions of the FY 2024 Hospital IPPS and LTCH Proposed Rule
For FY 2024, CMS proposes to make modifications to several hospital inpatient payment policies. We highlight six proposed policies that are among the most impactful for Medicare beneficiaries, hospitals and health systems, payors, and manufacturers:
the annual inpatient market basket update,
hospital wage index adjustments,
New Technology Add-on Payment (NTAP) program policy changes,
the agency鈥檚 call for input on how to best support Safety Net Hospitals,
graduate medical education payments at rural emergency hospitals, and
changes to many cardiovascular-related MS-DRGs.
Stakeholders will have until June 9, 2023, to submit comments to CMS on the contents of this regulation and request for information
1. Market basket update
Proposed Rule: Overall CMS鈥檚 Medicare 2024 Hospital Inpatient Proposed Rule will increase payments to acute care hospitals by an estimated $3.3 billion from 2023 to 2024; however, recent trends in economy-wide inflation may alter this estimate by the time the agency releases the Final Rule version of this regulation in August 2023. The primary driver of the estimated $3.3 billion increase in inpatient payments to hospitals is CMS鈥檚 proposed 2.8 percent increase in the annual update to inpatient operating payment rates.
红领巾瓜报/Moran analysis: CMS鈥檚 2.8 percent increase is largely based on an estimate of the rate of increase in the cost of a standard basket of hospital goods, the hospital market basket. For beneficiaries, increasing payment rates will eventually lead to a higher standard Medicare inpatient deductible and increased beneficiary out-of-pocket costs for many other services. For hospitals and health systems, payors, and manufacturers the proposed payment increase (2.8 percent) falls below economy-wide inflation (5-6 percent in recent months) and hospitals are already saying it is insufficient.[1] For this Proposed Rule, data from the third quarter of 2022 was used to calculate the 2.8 percent increase. Importantly, for the FY 2024 Final Rule, CMS will use data through the first quarter of 2023, which we know to include additional growth in economy-wide inflation. As a result,we anticipate the proposed 2.8 percent increase in payment rates may increase slightly by the time rates are finalized later in the year.
2. Hospital Wage Index Adjustments:
Proposed Rule: CMS proposes two wage index policies for FY 2024. First, CMS proposes to continue temporary policies finalized in the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities affecting low-wage index hospitals, which includes many rural hospitals. Second, CMS proposes to include geographically urban hospitals that choose to reclassify into rural wage index areas in the calculation of state-level rural wage index and the calculation of the state-level wage index floor for urban hospitals (referred to as the rural floor policy).
红领巾瓜报/Moran analysis: The two wage index policies proposed by CMS for FY 2024 will support rural hospitals. The first policy, to continue the low-wage index policy for an additional year beyond the original 4-year plan will allow hospitals with low wage indexes to boost their wage index and their payment rates across all MS-DRGs. Specifically, hospitals with wage indexes below 0.8615 (the 25th percentile across all hospitals) will automatically receive an increase in their wage index by CMS. This policy will bring additional millions of dollars to individual rural hospitals in FY 2024. The second policy, to include the labor data of geographically urban hospitals that choose to reclassify into rural wage index areas within the calculation of the state-level rural wage index and the state-level rural floor will largely benefit rural hospitals. In recent years several large geographically urban hospitals in several markets have chosen to reclassify into rural wage index areas to benefit their Medicare payments. In the past, CMS has not included the labor costs of these hospitals, which tend to have higher than average labor costs in their calculation of the state rural wage index or the rural floor wage index. In making this change, to include the labor costs of the geographically urban hospitals in these calculations, CMS will very likely increase the state-wide rural wage index. This will have the effect of increasing the wage index of many rural hospitals around the country. The overall impact of both proposed wage index policy changes for FY 2024 will be to increase inpatient payment rates to rural hospitals.
3. New technology add-on payments (NTAP):
Proposed Rule: Citing the increased number of applications over the past several years and noting the need for CMS staff to have time to fully review and analyze the applications, CMS proposes two changes to the NTAP application requirements. First, CMS proposes to require all applicants to have a complete and active FDA market authorization request in place at the time of NTAP application submission (if not already FDA approved). In addition, CMS proposes to move the FDA approval deadline from July 1 to May 1, beginning with applications for FY 2025.
红领巾瓜报/Moran Analysis: CMS鈥� proposals to change the NTAP application process aim to ameliorate the problem of manufacturers withdrawing applications because they miss the FDA approval deadline. These withdrawals increase CMS鈥� workload, as the agency reviews some applications multiple times. However, while these proposals provide CMS with more time to review applications, they increase the amount of time some applicants will not receive NTAP payments, depending on the timing of the FDA approval process. The annual NTAP approval cycle and FDA approval deadline create difficulties for manufacturers with products that miss the deadline, which many stakeholders argue creates barriers to access for new technologies. Stakeholders have proposed a variety of potential solutions to these barriers, such as biannual or quarterly NTAP decisions, or extending the conditional approval pathway currently used for certain antibiotic products to all NTAP applications.
4. Safety Net Hospital Request for Information:
Proposed Rule: CMS is seeking public input on the unique challenges faced by safety-net hospitals and the patients they serve, and potential approaches to help safety-net hospitals meet those challenges.
红领巾瓜报/Moran Analysis: In the 2024 Proposed Rule CMS poses a variety of questions to the public about how safety net hospitals and their patients can be better supported by the Medicare program, both in terms of payment and infrastructure investment. The agency specifically asks stakeholders their opinion on measures that could be used to define safety net hospitals and potentially make differential or additional payments to safety net hospitals. CMS names the safety net index (SNI) developed by the Medicare Payment Advisory Commission (MedPAC) in recent years and the Area Deprivation Index (ADI) developed by the National Institutes for Health (NIH) as the two leading options for defining and potentially reimbursing safety net hospitals. These two methods have several significant differences, including that the SNI is a hospital-level measure based in-part on the volume of cases at a given hospital associated with Medicare beneficiaries that are fully or partially eligible for Medicaid and the ADI is a geographic measure that correlates local socioeconomic factors with medical disparities. 红领巾瓜报 has modeled the SNI for hospital stakeholders in the last year and has identified hospitals that would be potential winners and losers if an SNI approach were implemented by CMS.
5. Graduate Medicare Education Training in Rural Emergency Hospitals:
Proposed Rule: CMS proposed to allow Graduate Medical Education (GME) payments for training Rural Emergency Hospitals. Rural Emergency Hospitals are a new provider type established by the Consolidated Appropriations Act, 2021, to address the growing concern over closures of rural hospitals. If finalized, this proposal would allow hospitals converting to REH status and other hospitals newly designated as REHs to receive Medicare GME payments even though they do not have an inpatient facility.
红领巾瓜报/Moran analysis: If finalized, the proposed policy to allow REHs to offer GME training and to be paid for GME training will enhance access to care in rural areas and will enable hospitals that convert to REHs to expand their capabilities. CMS鈥檚 proposal to allow REHs to receive payment based on 100 percent of the reasonable costs for GME training costs allows REHs to operate training programs and to focus new training programs on rural care and outpatient care. This policy, if finalized, will bring additional revenues to hospitals that decide to convert to REHs (thereby relinquishing their inpatient capacity) and will improve access to care for beneficiaries living in rural areas.
6. MS-DRG weights:
Proposed Rule: To set MS-DRG weights for FY 2024 inpatient cases, CMS proposed to use FY 2022 data, which is consistent with pre-pandemic CMS methods. In previous years, CMS had modified its MS-DRG weight calculation to account for high volumes of COVID cases. However, for FY 2024, CMS has returned to its longstanding method of using a single year of data to set MS-DRG weights. In addition, among the various changes CMS has proposed as a part of the 2024 MS-DRG weight setting process CMS has proposed significant changes to many MS-DRGs in the category for diseases and disorders of the circulatory system (Major Diagnostic Category 5).
红领巾瓜报/Moran analysis: CMS鈥檚 return to using a single year of data without COVID modification will be welcomed by many stakeholders, but particularly for those with an interest in short-stay surgical cases. The modifications CMS proposes to make to the MS-DRGs within Major Diagnostic Category 5, which includes numerous cardiovascular MS-DRGs, are likely to be disruptive for many stakeholders initially but over the long term are likely to make CMS coding more consistent with standard clinical practice and per case resource use. For example, CMS is proposing to consolidate five cardiac defibrillator MS-DRGs into three, consolidate three Thrombolysis MS-DRGs into two, and overhaul the family of stenting MS-DRGs. We anticipate that these changes and other proposed by CMS may result in initial coding confusion for hospitals, but that they will slowly adapt throughout 2024.
红领巾瓜报 and The Moran Company work collaboratively to monitor legislative and regulatory developments in the inpatient hospital space and assess the impact of inpatient policy changes on the hospital sector. 红领巾瓜报鈥檚 Medicare experts interpret and model inpatient policy proposals and use these analyses to assist clients in developing their strategic plans and comment on proposed regulations. Moran annually replicates the methodologies CMS uses in setting hospital payments and models alternative payment policies to help support its clients鈥� comments to the rule. Moran also assists clients with modeling for DRG reassignment requests and to support NTAP applications. Typically, these projects run through the summer, to ensure readiness for October deadlines. Finally, many clients find it useful to model payments for different types of cases under different payment scenarios. For example, a client may be interested in how payments for COVID-19 cases may change after the expiration of the Public Health Emergency, and which hospitals will face the biggest payment cuts. Moran is available to help with these and other payment modeling questions鈥攁nd works on many of these issues in tandem with 红领巾瓜报鈥檚 Medicare experts.
For more information or questions about the policies described below, please contact our experts below.
On Tuesday, April 11, 2023, 红领巾瓜报 hosted a Future Frame Conversation covering some of the changes outlined in the recent 2024 Medicare Advantage (MA) Rate Announcement. This cycle signals a new era for MA funding and risk adjustment. The Final Rate Announcement, in particular the new risk adjustment model to be phased in over three years, will spark stakeholders to reevaluate benefit design through the bid cycle and risk adjustment strategies in the future. These refinements will impact both health plan and provider reimbursement.
During the discussion:
Amy Bassano from 红领巾瓜报 talked about the CMS strategy for these changes; and
Tim Murray from Wakely Consulting, an 红领巾瓜报 company, discussed how payers should be using data and analytics to evaluate and forecast the impact of CMS changes.
