Navvis Right Now: Issue 20 – April 19, 2019

April 19, 2019

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Proposed Fiscal Year 2020 Payment and Policy Changes for Medicare Skilled Nursing Facilities

CMS released the proposed 2020 rule and projects aggregate payments to SNFs will increase by $887 million, or 2.5 percent, for FY 2020 compared to FY 2019. CMS continues its efforts to strengthen the Medicare program by better aligning payment rates for these facilities with the costs of providing care and increasing transparency so that patients are able to make informed choices.  There are three major provisions of the proposed rule: 1) the proposed changes to SNF payment policy under the SNF Prospective Payment System (PPS); 2) the SNF Value-Based Purchasing Program (VBP); and 3) the SNF Quality Reporting Program (QRP).  For the PPS, CMS is moving to a Patient Driven Payment Model (PDPM) that begins on October 1st changing the way it pays SNFs for care that is more focused on value rather than volume by classifying patients in a covered Medicare Part A SNF stay. (PDPM utilizes ICD-10 codes to classify SNF patients into certain payment groups.)  It is also aligning group therapy definitions with other PAC settings and proposing to adopt the definition of group therapy that is used in the Institutional Rehabilitation Facilities (IRF) group therapy. Last year CMS implemented the SNF VBP Program began rewarding SNFs with incentive payments based on their quality measure performance. CMS is proposing to add three measures: preventable readmission policies, updated public reporting requirements for SNFs with less than 25 eligible stays and a 30-day deadline for phase one review and correction requests. For the SNF QRP, CMS proposes to adopt two new quality measures in FY 2020 to assess how health information is shared.  The two proposed measures are: 1) Transfer of Health Information from the SNF to another Provider, and 2) Transfer of Health Information from the SNF to the Patient in addition to proposing the standardizing of a number of patient assessment data elements.

Takeaway: Last year’s proposed rules contained sweeping changes to how SNFs are paid by moving to the Patient Driven Payment Model (PDPM), which are creating a lot of financial concerns for SNFs like ‘site neutral payments’ created for hospital owned outpatient facilities. The PDPM model becomes effective on October 1, 2019, when CMS will begin using a new case-mix model which focuses on the patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment. This proposed rule was released last night, but at first glance the proposed 2020 rule reinforces the PDPM model and is not proposing significant changes this year. Further information will be distributed and a call setup to review the changes since the Post-Acute Care (PAC) and PAC networks is a core focus of our business. To learn more about the PDPM model, register here for a Home Health Care News webinar on April 25that 1:00 p.m. CT.

High-Deductible Health Policies Linked to Delayed Diagnosis and Treatment

High-deductible plans are really the epitome of the access-to-care problem. NPR interviewed a woman with the BRCA2 gene making her high risk for breast cancer and the struggles with increasing out of pocket costs have caused her to delay annual mammograms because of her $6,000 out of pocket deductible. People don’t have the liquid cash to meet their deductible, so you see delays in care or even avoiding treatment altogether. A study published last month in Health Affairs examined claims data from a large national insurer for 316,244 women whose employers switched insurance coverage from low-deductible health plans (i.e., deductibles of $500 or less) to high-deductible health plans (i.e., deductibles of $1,000 or more) between 2004 and 2014. The study group consisted of women who were in low-deductible plans for one year, then switched to a high-deductible plan for an additional one month to four years. The control group consisted of women who remained in low-deductible plans.  Women with low incomes who had high-deductible insurance plans waited an average of 1.6 months longer for diagnostic breast imaging, 2.7 months for first biopsy, 6.6 months for first early-stage breast cancer diagnosis and 8.7 months for first chemotherapy, compared with low-income women with low-deductible plans. Women with high incomes who relied on high-deductible health plans were not immune to such delays — they experienced lags of 0.7 months for first breast imaging, 1.9 months for first biopsy, 5.4 months for first early-stage breast cancer diagnosis and 5.7 months for first chemotherapy, compared with high-income women with low-deductible plans.

Takeaway: This is a reminder of how social determinants of health (SDoH) affect healthcare and health outcomes based upon people’s ability to afford care. While we prescribe good care, oftentimes the question of affordability is not asked, or the patient is reluctant to admit that cost is a barrier. This is a real issue that needs to be incorporated into discussions by all members of a care team. This research follows the NYT story and Gallup poll that I shared last week, which reported 25% of Americans have skipped treatment because of the cost and 50% of those surveyed fear bankruptcy in the event of a health emergency. This reinforces that out of pocket cost is a real barrier and delaying care risks further complications. There are ways to address the costs of care, but it’s a complex process. Pharmacies have rebates available, community resources are available, and in this story, Susan appealed to have her mammogram charges reduced from $1,088 to $191. These are every day real life events for people and 40% of U.S. adults cannot come up with $400 without notice. Last month I helped a friend negotiate a cash pay price in advance of the imaging that was a fraction of what was she was quoted, because she couldn’t afford the tests. A month earlier, she was fine and sudden headaches prompted her doctor to test for brain tumors and the quote was thousands of dollars and she was on a high deductible plan.

Humana Launches Oncology Payment Model and UnitedHealthcare Expands MA Bundled Payment Plan in their  Medicare Advantage Plans

Humana launched a new payment model for Medicare Advantage and commercial members receiving treatment for cancer. The program, called the Oncology Model of Care, will offer additional payment to participating cancer practices for improved performance on certain metrics over a one-year period. There are currently 16 practices participating in the model, which started in January. “The experience for cancer care is fragmented,” said Dr. Bryan Loy, corporate medical director of Humana’s oncology, laboratory and personalized medicine strategies group. “Humana wants to improve the patient experience and health outcomes for members. We are looking to make sure the care is coordinated.”

UnitedHealthcare is expanding its bundled payment offerings to providers in its Medicare Advantage plans in more than 30 states, the insurer announced Wednesday. The new program will let providers participate in bundled payments for eight specific procedures, including hip and knee replacements, coronary bypasses and spinal fusions, starting Jan. 1, 2020. The expansion builds on UnitedHealthcare’s participation in CMS’ Bundled Payments for Care Improvement – Advanced program in traditional fee-for-service Medicare. It will include care management and patient engagement tools, performance analytics and consulting and payment administration services for providers, according to a press release. Of the payer’s roughly 5 million enrollees in MA plans, more than 3 million are treated by providers in value-based models. UnitedHealthcare, which contracts directly with more than 1.2 million physicians and 6,500 provider facilities, estimates it will have $75 billion in annual provider reimbursements tied to value-based arrangements by the end of next year

Takeaway: Last month Humana also announced a bundled-payment model for spinal fusion, total hip or knee joint replacements as well as maternity care bundle for commercial members. Care redesign infrastructure is expensive and it’s hard to redesign care for just a segment of your business. Many hospitals and specialists are participating in Medicare’s bundled payments for care improvement advanced (BPCI-A) program. Therefore, more volume paid under an APM allows you to spread the infrastructure cost which is largely fixed. Also, more volume means more opportunity for bonus dollars, resulting in greater return for physicians who engage and participate in care process re-engineering. The more engaged physicians you have the more likely you are to improve outcomes. Both Humana and United are offering these programs in areas where they see coordinating care will reduce costs, improve outcomes and engage members.

Patent Filings Hint at Apple’s Potential Move into Managing Healthcare Records

Recent patent filings support the idea that the Apple has ambitions to be the of health records by aggregating all consumers’ health data in one place on their mobile devices, Dave Levin, M.D., chief medical officer of Sansoro Health and former CMIO for the Cleveland Clinic. ( is a money management and financial tracking app that syncs users’ bank accounts, credit cards and other accounts to track and organize financial data and features a streamlined user interface.) Patent applications from Apple describing technologies to aggregate and search medical information through user devices, building medical provider databases and building a tool to search medical providers’ data while protecting the device users’ privacy. Other patent applications describe things like on-device searching using medical term expressions and techniques for managing access of user devices to third-party sources. The app will be smart enough to know that when you say cholesterol that you want to see a lipid profile.  An application that can automate that for consumers on their devices could be a “gamechanger,” Levin said. David Hyams, a registered patent attorney and senior counsel with The Marbury Law Group, said “Apple’s whole philosophy is that your user experience is through your phone. Apple’s thinking could be to provide all of your medical data and make it available to you on your phone in a way that is convenient and searchable.” Morgan Stanley estimates that Apple’s market opportunity in healthcare ranges from at least $15 billion to a whopping $313 billion in revenue by 2027, or triple the smartphone market, Bloomberg reported. “Based on what it has done over the last five years, we see Apple creating the building blocks of another ecosystem that puts the consumer at the center,” the report said. Hymans noted that one patent describes a provider subscription system indicating Apple “may want to be the service in the middle between consumers and healthcare providers to handle electronic health records.”

Takeaway: Over the past few years, CMS has promoted interoperability, transparency and putting the consumer in charge of their health records setting the stage for private innovation to solve this problem. Apple has built interoperability with its Health App. In 2018, Apple launched its health records functionality with known health systems and Apply quietly and continually added large health systems and small specialty practices. (The listis impressive and has over 250 health facilities enrolled to exchange medical records with Apple.) With the certified EHR standards, SMART Health IT and FHIR technology, coupled with the recent proposed interoperability and information blocking rules published by the Office of the National Coordinator for Health IT, it makes it possible for Apple to offer a platform to enable consumers to access their health data on mobile devices.

UnitedHealth CEO says ‘Medicare for All’ Would ‘Destabilize the Nation’s Health System’

UnitedHealth Group CEO David Wichmann warned investors on Tuesday that “Medicare for All” proposals pushed by Democratic lawmakers and presidential candidates would “destabilize the nation’s health system.”Wichmann, who rarely discusses politics, told investors on a post-earnings conference call Tuesday such measures would “surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system and limit the ability of clinicians to practice medicine at their best.” “And the inherent cost burden would surely have a severe impact on the economy and jobs — all without fundamentally increasing access to care,” he added. A number of Democratic proposals call for eliminating private health insurance and replacing it with a universal Medicare plan, claiming it would help reduce administrative inefficiencies in the health-care system. Most recently, Sen. Bernie Sanders of Vermont unveiled a bill that would create a government-run system to provide health insurance for all Americans. Separately, CMS Administrator Seema Verma said it is the ‘biggest threat to American health care system’ because “What we’re talking about is stripping people of their private health insurance, forcing them into a government-run program.”

Takeaway:If you’re following Medicare for All, Senator Bernie Sanders plans elicited a lot of feedback last week.  For UnitedHealth, the proposal eliminates private insurance. This caused health insurer stocks to drop, which was very reactionary considering there is a very low likelihood of the proposal moving forward. If you want to learn more and form your own view, take 10 minutes to listen to a Politico’s summary of Sanders Medicare for All proposal here. In summary, both the Democratic nominees and the Trump Administration are waiting until after the 2020 elections to release details on their health plan. While healthcare will continue to dominate the news, there is little substance behind it for the next 18 months.


Disclaimer: This blog includes content gathered from other published sources, not authored by Navvis, and is presented as information only. As with any news story, this information may have changed since its publication date. Commentary included with the information is the opinion of its authors, and is not indented to provide legal or regulatory advice or guidance to the reader. Navvis does not represent the accuracy of or assume liability for the content presented herein.