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Payment Reforms & Health Care Costs

  • Final MACRA rule expands exemptions, flexibility Modern Healthcare by Virgil Dickson, Shannon Muchmore and Shelby Livingston—Nearly a third of physicians could be exempt from Medicare's new Merit-based Incentive Payment System under a final rule CMS issued Friday for implementing the Medicare Access and CHIP Reauthorization Act. CMS also signaled it would broaden the opportunities for physicians to participate in alternative models that make them eligible for bigger rate increases and bonuses. In April, CMS released the proposed rule on MACRA, which replaced the old and flawed sustainable growth-rate formula for physician pay with a new method meant to shift physicians away from the fee-for-service model and onto a value-based payment system. To avoid penalties under MACRA, physicians will participate in one of two reimbursement tracks: a merit-based incentive payment system or advanced alternative. Department of Health & Human Services (HHS) Press Release on MACRA

  • Mixed Results For Medicare Experiment Milwaukee Journal Sentinel by Guy Boulton—Health systems and physicians throughout Wisconsin and the rest of the country are proving they can lower costs while improving quality. They are in the minority, though. That’s one of the takeaways so far from Medicare’s largest experiment to change the way hospitals and doctors are paid. The experiment involves what are known as "accountable care organizations," in which health systems, hospitals and groups of physicians receive bonuses if they provide care at a lower cost while meeting basic quality measures for a set group of Medicare patients. Slightly fewer than one in three—31%—of the 392 participating accountable care organizations last year received bonuses for their performance.
  • A Promising Fiddling with Health Insurance Modern Healthcare EDITORIAL by Merrill Goozner—CMS announced without fanfare or opposition that it will allow some of the nation's leading insurers selling Medicare Advantage plans to use value-based insurance design (VBID) in as many as 10 states starting in 2018. OK, it's only a pilot. But VBID remains one of the most promising reforms to health insurance to come along in decades. Medicare beneficiaries in VBID-style plans will be paying lower co-pays and deductibles for high-value healthcare services. VBID is the antidote to the high-deductible plan trend among employers. Left on their own to pick up anywhere from $1,000 to $5,000 in first-dollar coverage, people inevitably make poor choices.
  • Hospitals Are Taken Ill Over Rising Drug Prices STAT by Ed Silverman—The rising cost of medicines is making some hospitals feel ill. While much of the attention over prescription drug prices is focused on consumers, a survey released on Tuesday finds that hospitals are also spending much more than in the past. Between 2013 and 2015, the average annual drug spending for patients who stay in community hospitals increased by of 23.4 percent, from $5.2 million to $6.5 million. And on a per admission basis, hospital spending on drugs jumped nearly 39 percent, to $990. Moreover, the increase in prices outpaced reimbursement rates from payers, retail spending on medicines, and the pharmaceutical price inflation calculated by the U.S. Bureau of Labor Statistics. As a result, the survey found that more than 90 percent of the hospitals surveyed reported that recent price hikes for inpatient drugs had a moderate or severe effect on managing costs.

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