July 31, 2018

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CMS recently issued several major proposed rules affecting Medicare payments for physicians and hospitals in 2019. Taken as a whole, these rulemaking actions demonstrate a continued strong value proposition for hospital participation in Accountable Care Organizations in 2019 and into the future. Both the 2019 Physician Fee Schedule/Quality Payment Program (PFS/QPP) and the Outpatient Prospective Payment System (OPPS) proposed rules will allow ACOs to both operate free from some burdensome requirements and recoup some proposed payment cuts through shared savings.   

The PFS/QPP proposed rule signals some welcome stability to the MIPS Program. CMS is investing in and refining the program, despite persistent questions about its future. The cost domain will continue its incremental increase, going from 10 to 15 percent next year. Another piece of good news for our rural providers is the changes to MIPS to address our nation’s opioid crisis. There are also more ways for low volume providers to qualify for MIPS bonuses under this rule.  

Some of the ACO-specific changes will make participation more attractive for those providers who have been wary in the past. The rule would substantially reduce the number of quality measures, from 31 down to 24. This change would allow ACOs and member providers to focus more of their time on patient care, rather than time-consuming reporting requirements – though Caravan Health is concerned about the implications of removing the measure for testing of eye function for patients with diabetes.  

In the OPPS proposed rule, CMS proposed a dramatic reduction in rates for clinic visits at outpatient hospitals. Hospital groups and other have raised concerns about the site-neutral payment policies that began several years ago and are expanded in the proposed OPPS rule. While this policy may challenge some outpatient clinics, the best way to manage any payment reductions is by joining an ACO. ACO participation creates an opportunity to earn shared savings, effectively giving some of that money back to community providers and allowing them to stay afloat financially.  

Caravan Health is encouraged to see CMS continuing to create incentives for hospitals to join risk-bearing payment models. Despite lots of uncertainty this year, ACOs have been strengthened by these proposed rulemaking actions. Stay tuned for analysis of the new regulation for the Medicare Shared Savings Program, expected imminently.   

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