As the Health Services Cost Review Commission (HSCRC) transitions into “phase 2” of the All Payer Medicare Waiver, they will be monitoring Medicare’s creation of alternative payment methodologies as a guide for Maryland. The HSCRC has issued a solicitation to hire a consultant to help direct the next phase of development.
At a recent Commission meeting, in the Executive Director’s Report, Donna Kinzer discussed Medicare’s new reimbursement policy, which begins to use bundled payments and other alternative payment methodologies. At the meeting, MedChi questioned how the HSCRC will examine reimbursement increases to ensure the money is actually accrued to the provider as opposed to administrative expense.
Given Maryland’s unique system, Ms. Kinzer said the Medicare payment methodologies are in their early stages and the HSCRC will be thoughtful in their deliberations when considering implementation of similar approaches in Maryland. With these new developments in the transition of the waiver, Medchi and the BCMA will continue to voice physician concerns.
Maryland’s All Payer System, known as the Medicare waiver, was renegotiated in January 2014 and exempts the state from Medicare rules allowing the state to set its own rates as long as it saves at least $330 million within 5 years. The new system replaces the original 36 year old waiver.
There are two major differences with the new waiver. First, hospitals are operating under global budget revenue where each hospital’s total annual revenue is known at the beginning of each fiscal year. The annual revenue is determined from a historical base period that is adjusted to account for many different factors. Second, the new waiver allows for physician gainsharing and care coordination with hospitals and other entities. Gainsharing allows hospitals to share savings with the physicians identified with delivering that cost saving care.
In order to share savings and coordinate care with physicians, physician self-referral, anti-kickback law, and gainsharing civil money penalties had to be waived by the federal government. The federal government is working on these waivers and is expected to complete approval no later than the second quarter of 2016.
Maryland is the only state in the nation to receive a waiver from Medicare. However, a small percentage of hospitals in other states are taking part in a Medicare bundled payment plan before it is mandated.
As reported in Forbes magazine, data from the Medicare says about 9% of U.S. acute care hospitals and 7% of skilled nursing facilities are voluntarily assuming financial risk by participating in the phase of the Medicare Bundled Payments for Care Improvement Initiative. They are providing medical care for one bundled fee, grouping all of the services involved in an episode.
In all, 1,755 medical care providers across the U.S., including hospitals, skilled nurse facilities and home health providers, are agreeing to participate in the bundled payment initiative voluntary assuming financial risk, according to the Medicare’s data.
There are many criticisms of bundled payments. Will hospitals maximize profit by limiting access to specialists during an inpatient stay, do all illnesses fall neatly into episodes, and what about catastrophic events that risk physician reimbursement? Also, will savings be passed along to patients and physicians or will they be kept by the insurers and employers? These will be questions that will need to be answered.
In addition to the HSCRC report, the Chesapeake Regional Information System for our Patients (CRISP) made a presentation at the meeting on its current and future expansion plans. The plan is to focus on ambulatory connectivity goals and data mobility between institutions and providers. CRISP presented various benchmarks that it would use to measure its progress and promised to provide the HSCRC with regular updates. Also, the HSCRC’s Consumer Engagement Task Force gave a presentation. The task force was created to recommend cost-effective ways of using health care services to increase consumer education and engagement in the most cost effective. Their task force report will be finished for formal presentation to the HSCRC prior to the next Commission meeting.
Ms. Kinzer will speak to the members of the Baltimore County Medical Association on the topic of the Medicare waiver’s current transition on September 9 at 6 p.m. at the Conference Center at Sheppard Pratt. Contact Russ or Michael at 410-296-1232 or [email protected] if you wish to attend.
