In recent years, many health IT vendors and medical practices have been gearing up processes and systems for compliance with Affordable Care Act (ACA)-driven regulation. However, now that the Republicans swept the election, we’re poised to see significant change in healthcare policy.
Looking at early policy commitments and recent announcements as they relate to healthcare, a path seems to be materializing, although not highly specific, that offers some directional guidance on what might happen.
Within the first days of his administration, President Trump issued an executive order to take steps to repeal and replace the ACA. The repeal process can be achieved without democratic intervention, however actual replacement appears to be a challenge. While passing a new law requires 51 votes, if there is a filibuster, it requires 60 senate votes to overcome the filibuster and force a vote. Given the 54 seats held by senate Republicans, and the probability that the senate Democrats will filibuster, this path is less likely. Instead, a set of modifications to the existing law may be the path of least resistance and the best option for both parties.
We are likely to see a set of changes around several key areas that relate to reducing Medicaid expansion, dropping the insurance mandate, and expanding the use and flexibility around high deductible plans (HDPs), health savings accounts (HSAs), and purchasing insurance across state lines. There could also be a huge win for consumers in the form of improved pricing transparency, and options to buy drugs from other developed countries at significant savings.
On the heels of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) final rule, these potential changes lead to the following question: What impact will anticipated ACA adjustments have on the current shift to value-based care?
This is an important question, as it will significantly affect the payment models for both large and small practices across the U.S. At this point, there isn’t any evidence that the shift to value-based care will be significantly impeded by the Trump presidency or Congress.
Despite the ACA being the sentinel legislation for value-based care, follow-on legislation such as the bipartisan MACRA law cemented the path to value-based reimbursement for all Medicare providers over the next five years. This is driven in large part by the pending insolvency of Medicare by 2025, and the need to slowly but consistently mitigate this risk by moving away from fee-for-service (FFS).
The Trump administration will likely seek to make a set of changes that do not restructure the fundamental shift to value-based care, as this will not result in fiscal improvements nor address top priority items within their stated plan. Many industry thought leaders seem to agree with this, including Marc Probst and John Halamka. “In my conversations with Washington DC career staff (not political appointees), there is a sense that the Quality Payment Program will go forward as written,” Halamka said in a recent article.
If these assumptions are correct, then what changes are in store for the independent practice?
First and foremost, the shift away from FFS should still be anticipated over the next 12 to 24 months as the MACRA Quality Payment Program is put in to place and begins to effect actual practice revenues beginning in 2019. This translates into the need to drive better patient outcomes, as practice revenues will increasingly be a function of reported quality scores.
Second, the move towards consumerized healthcare may continue to accelerate, as HDPs become even more pervasive, and patients have significant transparency and choice when it comes to routine healthcare services. This could place a new premium on customer service, convenience, and reputation for the independent medical practice.
It is important to note that the increased use of HDPs is somewhat at odds with existing value-based care initiatives. High deductible plans tend to increase out of pocket costs associated with patient compliance. However, it is imperative that patients comply with physician-directed care plans designed to reach positive clinical outcomes. Without sufficient discounted or free outcome-linked services built into each HDP, outcomes, and therefore provider revenues, will suffer as this multi-dimensional transition occurs. The challenge is to find the correct balance to drive the patient towards better outcomes while providing clear value in the process.
While this analysis is based on early information, and a minimum of hard data, there are some clear directional signals as to how the independent practice should be preparing for the next 12 months. The most notable is that there is no indication that MACRA will be changing or going away, and that success with value-based programs may become more challenging in the years to come. So, while we watch to see what will happen with the ACA, continue to prepare for participation in MACRA.
About the Author
Dr. Tom Giannulli is the chief medical information officer at Kareo. He is a respected innovator in the medical technology arena with more than 15 years of deep experience in mobile technology and medical software development. He holds a M.S. in biomedical engineering from the University of Utah and earned his M.D. from the University of Texas at Houston where he completed his residency in internal medicine. Additional updates on changes in healthcare policy can be found at the Kareo MACRA Resource Center.
