MACRA: A DEEPER LOOK
CMS & CONGRESS ARE WALKING A TIGHTROPE
The medicare payment system is in the midst of a paradigm shift. It's moving away from the fee-for service payment structure, in which providers are rewarded solely by the volume of services provided, and toward a structure that holds providers accountable for patient outcomes and costs. So what we will see as a result of this, is that providers will be more skittish in accepting & treating high risk patients. Unfortunately it’s already happening, because there are already reports of clients needing a procedure of care and being told they are not good candidates.
As they explain in this article, Medicare intends to advance the goals of healthcare's triple aim: improving the patient experience of care (including quality and satisfaction), bettering the health of populations, and reducing the per-capita cost of healthcare. It seems as if they are really trying to do that. It also seems that this is MISSION:IMPOSSIBLE.
It's important to note that although providers will be more skittish in accepting & treating high risk patients with these changes, Medicare is not necessarily the villain in this case.
To catch up on exactly what changes the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) will bring check out these 2 articles:
Have you noticed what is already happening behind the scenes to Skilled Nursing Facilities (SNF), Home Health Care Facilities (HHC), and medicare coverage in general? There is a much bigger issue and it has to do with the Medicare payment system. Ultimately, several nursing homes will be going out of business.
The United States is set to transition from a fee-for-service system, which allowed physicians and providers to bill Medicare and Medicaid for services they provided to their patients, to a pay-for-performance based system. They will implement this by using Merit-based Incentive Payment System (MIPS), Advanced Alternative Payment Models (APM), and Accountable Care Organizations (ACO). The new model is driven by data, which now requires the provider to submit information to payers on specific metrics and demonstrate improvement.on the quality of service being given, how valuable it is to the patient, and accountability that provider has to the treatment being performed.
Providers may have to track and report on hospital readmissions, adverse events, population health, patient engagement, and more. Under the new models, providers are incentivized to use evidence-based medicine, engage patients, upgrade health IT, and use data analytics in order to get paid for their services.
Let's pause for a moment. You may recall 2 recent regulatory changes that had very damaging and catastrophic changes that would effect 1000's of agents and millions of potential clients & investors:
The Affordable Care Act (ACA)
The Department of Labor Ruling (DOL)
Think about how damaging and different the ACA was for group and individual health writers. That change put 1000's of agents in jeopardy of losing everything. And the DOL? Imagine that the DOL ruling would've gone through. For those of you who may not be aware – the DOL had passed a law that would require a Financial Institution (mainly a bank or Broker Dealer in the securities world) to sign off on annuity sales – which would drastically impact the distribution and sale of insurance products. Thankfully that law did not into effect! For the Skilled Nursing Facilities - this is a bigger deal than those 2 examples. This new regulatory change affects home health care service providers and nursing home facilities in a profound way.
THE REST IS LESS OBVIOUS
This Patient-Driven Payment Model (PDPM) ruling being changed under MACRA is essentially creating a have and have not population of care providers. Unless they were already offering hospital services, it’s going to be very difficult to compete because new SNF are emerging that are fully equipped with these services. In fact, many existing SNF are being sold or closed. The only option an existing SNF would have to remain open is to offer their own version of managed care via their own Health insurance networks. What would be the benefit of that? The reason they would do that is to be first in line for receiving payments from Medicare. Medicare, in this new (PDPM), is going to bundle their payments. Click here for an overview of PDPM and fact sheets from CMS.gov.
As an example of bundling payments, let's say a patient has been admitted into a hospital 5 days for XYZ. The doctor or hospital administrator will then write a plan of care for the patient. For this example, let's say they are going to receive 30 days of rehab care, and then some Home Care. Medicare will then add it all up, and make 1 single payment to whomever wrote the plan of care. At that point, it’s up to that person to divvy the money out to the different services within that plan of care...AFTER they cover their own expenses. And as they do this they will say, "Oh, well we had this bill, and this bill, and this bill, and here’s what’s left over, here you go." You can imagine being at the end of the line - the nursing homes are freaking out. It's going to be damaging and catastrophic for them.
Before MIPS, ACM, and ACO, SNF's have generally used generic billing codes as a catch all, which would maximize their billing to CMS. As a cost saving measure, CMS is going to force them to use more specific billing codes that will limit the amount they can charge. For example, if the most they were able to charge is $500 for a patient, now the most they can charge is based on the actual care given. They cannot use generic billing codes as a catch all to maximize their billing anymore. And since Medicare has a budget issue, they have to cut costs, and they're taking it from everywhere they can.
WHOSE BOAT CAN THEY ROCK?..
How have they targeted patients?
Increase the Part B deductible
Income Based Part B Deductible
Medicare Advantage Deceptive Marketing
How have they targeted insurance companies?
Part B deductible
Certain other coverage's within Medicare Part B
How have they targeted doctors?
40% -‘89 25% -’90 15% -’91 5% -‘92 0% -’9
Only made it to 15% then the doctors revolted participation dropped below 40%
By 2015 dis-enrollment rates had started to sky rocket.
How does this affect our clients?
Will more doctors dis-enroll from Medicare participation? Maybe, but if too many do, CMS and congress will respond. More than likely you will see the following changes:
More doctors joining hospital networks or larger medical care facilities.
Doctors (especially specialists) will likely be more selective of the patients they are willing to see based on fear of impacting their ratings and pay scale.
Part B EXCESS CHARGE
They agree to collect only your Part B deductible and/or coinsurance amount at the time of service. Most wait until Medicare has paid its share to bill you. Nonparticipating providers can collect payment in full upfront. They must submit your claim to Medicare for you and at no cost to you. Nonparticipating providers, on the other hand, may not bill Medicare, so you have to file a claim yourself to get reimbursed.
How Might Part B Excess Charges Affect You?
Suppose you see a nonparticipating dermatologist for removal of a few suspicious moles. If the Medicare allowable charge for this procedure is $400, the dermatologist could bill you $460. Assuming you’ve met your Part B deductible already, your out-of-pocket costs for the procedure would be $140. This is your 20% coinsurance amount of $80 plus the 15% Part B excess charges of $60. With a participating provider, your out-of-pocket expenses would be just $80.
Statistics suggest that as many as 95% of primary care providers accept assignment. A slightly smaller number of specialist physicians accept it as well. Not all nonparticipating providers will add Part B excess charges if you don’t have a Medigap plan, so you may only rarely see Part B excess charges.
That said, however, there is no limit on the number of times a nonparticipating doctor can add excess charges to your bill. So, if you regularly see a provider who doesn’t accept assignment, you could easily pay hundreds of dollars in excess charges each year.
What Can You Do to Protect Yourself Against Part B Excess Charges?
The easiest way to protect yourself from excess charges is to only use physicians who accept Medicare assignment. Then you will know you will never be billed more than Medicare allows for your healthcare services. It’s always a good idea to ask your doctor if he or she accepts assignment before you make an appointment. Don’t forget you need to ask the same question of any Medicare provider, such as lab facilities, home health care companies, etc. You can also find providers in your area that participate with Medicare using the Medicare.gov physician locator tool.
Lastly, you can also avoid paying excess charges out-of-pocket by buying a Medigap plan that pays them for you. Currently both Plan F and Plan G include this benefit.
THE BIGGER ISSUE
Proposed changes to nursing facility payment under consideration by CMS would reduce financial incentives to provide therapy, and would do so with such force – providing higher reimbursement to SNF's that provide residents fewer types of therapy over a shorter period of time, or no therapy at all. So from the SNF's perspective - does PDPM Improve Reimbursement?
The short answer is no.
And yet even more behind the scenes changes coming from MACRA will affect the industry indirectly because people are already getting bills from Nursing Homes saying that even though they are in rehab - Medicare isn't paying for it anymore.
CMS started this in 2015 when the bill was passed - phasing this deadline where they're saying, "OK, we are going to pay you until this date the way it's been, but now you have to jump through more hoops." So why is this already happening if the deadline is Oct. 1st, 2019? Because they were beta testing these bundle payments all along, and it's been happening more and more.
Based on this we know 2 things will happen:
#1. Due to the star/skill based system - Skilled Nursing Facilities will start cherry picking patients, and because of that, and we will start seeing much more denial claims for Medicare. We will also see more rejection claims for Post Hospital Care. Further down the road this will even be seen in Assisted Living and/or Rehab Facilities.
#2. We will soon see prices going up.
So the answer to all of this is:
It would be irresponsible NOT to recommend
a COMPREHENSIVE Medicare plan.
A comprehensive Medicare Plan is:
#1. Medicare Supplement with one of the following:
Hospital Indemnity, Home Health Care, Facility Care, or Cancer Care.
#2. Medicare Advantage with one of the following:
Hospital Indemnity, Home Health Care, Facility Care, or Cancer Care.
What can we do?
1. Accept the reality that times and coverage have changed.
This is not the first time and it won't be the last.
2. Do the best we can given the laws and tools around us.
3. Adapt. Be thorough, offer advice, and follow up.
Everyone needs coverage
Not everyone can get protection
Below you will the breakdown of all the possible scenarios your clients fit into. Hover over each and click on the options available to see how we can add value to your business.
And so in conclusion - we all need to be aware of the what's happening with Medicare Supplement in particular, however, we need to help our clients with Post Hospital Care because that's the bigger issue they are facing. That's the issue being affected the most by MACRA.
If you want more education in the products we are using:
We can provide detailed training and insight on the comprehensive solutions we have been using to preserve our clients estates and give them peace of mind to enjoy each day.
MORE TO COME ON MACRA AS WE UNFOLD MORE DETAILS...until then please continue to find resources throughout our website.