A version of this article was published in the March edition of Healthcare News.
As the rapidly shifting health care landscape brings mounting regulations, financial pressures, and other challenges, reimbursement and antitrust emerged as priorities for leaders to address during the Moss Adams 2023 Executive Health Care Conference.
Reimbursement complexities are making it more challenging for providers to achieve financial sustainability, while regulator-driven merger controls meant to soften mega-transactions could impact what deals are approved and how transactions are executed.
Prepared organizations can navigate these challenges, capitalize on opportunities, and create more resiliency in business plans with interdepartmental alignment between teams such as compliance, legal, revenue cycle, and patient experience. Prioritize the following challenges in the health care landscape in 2024 to help your organization stay ahead of change and manage their impact.
Future of Reimbursement
Government reimbursement continues to be in a perilous state, with hospitals averaging 82 cents to the dollar for care of Medicare patients and less for Medicaid patients. In turn, the financial squeeze has pushed many private practitioners into health system partnerships.
Site Neutral Payments
As providers contend with those preexisting pressures, they also see other concerns ahead. After a landmark 2015 modification and additional exceptions, there’s increasing focus on site-neutral payments. While government reimbursement continues to expand on minimizing or eliminating payment variation based on site-of-service, many providers say it doesn’t account for the nuances in care delivery.
Lawmakers have yet to review potential changes as part of several proposed policies. In the meantime, health care leaders are right to keep their eye on site neutrality in 2024 and beyond.
“We’re talking about moving reimbursement to equalize sites and ignoring any additional resource usages that are necessary in one versus the other,” said Eric Lucas, managing director, Moss Adams Health Care Consulting Practice, who moderated the reimbursement session at the health care conference. “It's probably going to continue to be tough to determine what services should be performed in these different environments.”
Additional Reimbursement Concerns
Other reimbursement concerns deserving spotlight in 2024 are familiar ones, including value-based reimbursement and health care leaders’ ongoing struggle to embrace it—and don’t forget Medicare Advantage (MA).
The MA market has surged as insurers pursue the profitability of MA plans, with one in two Medicare beneficiaries now enrolled in those plans. As MA volumes expand, many providers are expressing frustration with slow payments and denials of these increasingly popular plans—making this another issue to watch in the year ahead.
One final reimbursement threat is around Medicaid redeterminations, which vary by state but could impact provider revenue as enrollee attrition continues. Many providers have reported not feeling the impacts yet, indicating that those losses could take time to bear.
“We know the effects are coming, but it’s a question of when,” Lucas said. “Just because someone was taken off Medicaid, doesn’t mean it’s going to immediately impact them. It’s not going to impact you until you need services.”
In addition to immediate issues around helping these patients identify alternate coverage, hospitals that are part of the 340b drug purchasing program should monitor these payer mix changes, as they may impact eligibility for the 340b program.
Antitrust Activities
As provider leaders occupy themselves with reimbursement headaches and resulting financial pressures, they’re often inclined to consolidate so they can better weather economic challenges. Amid an antitrust revolution occurring federally and in states, that’s hard to do.
Federal
Federally, there’s the Federal Trade Commission (FTC) and Department of Justice’s (DOJ) recent release of final merger guidelines. In those sector-agnostic guidelines, a union that would consume 30% of the market would be considered dominant. Even short of this benchmark, transactions could be considered anticompetitive if certain criteria are met, which could hold up a large swath of would-be deals.
Additionally, much of the focus of federal agencies has disproportionately affected hospital transactions. Health care comprises almost half of antitrust enforcements, even though it takes up just a fraction of the gross domestic product.
State
On the state side, merger controls have been seen nationwide—up to 13 states by the end of 2023, including California, Illinois, and New York.
A big worry is that these policies might worsen the scrutiny already seen from national agencies, making health care deals even less passable in the future. This underscores the need to be mindful of how any proposed deals would interact with these federal and state policies.
Price Transparency
Although the Hospital Price Transparency Rule and the No Surprises Act went into effect in 2021 and 2022, respectively, their impacts weren’t all immediate.
For example, penalties have only just now become a reality as unsuspecting providers start to receive Centers for Medicare & Medicaid Services (CMS) letters informing them of noncompliance.
“Hospitals may not rate price transparency compliance in their top risk areas, but there are many compliance implications that could bubble up,” Melaney Scott, director of Moss Adams Health Care Consulting Practice, said, alluding to hospital leaders’ confidence in price transparency compliance that’s been seen nationwide. “We’re even hearing reports of organizations getting told that they’re not compliant after the CMS took the low-hanging fruit approach of looking at their websites.”
“It’s a good time for organizations to make sure they have a response plan in place,” Richard Riter, director, Moss Adams Health Care Consulting Practice, added. “If you’re a system, you should assume that you’re going to be reviewed—and even if it’s an innocent slip-up, there could be letters you’re going to receive. Discuss who’s going to be on point for different issues and be prepared to respond quickly.”
Outpatient Prospective Patient System (OPPS) Rules
New OPPS rules slated to take effect in July 2024 provide a standard template for files, helping drive more transparent comparability in pricing information from one hospital to the next. This could create another vector of CMS enforcement.
While one aim of price transparency policy has been to give patients more information, these measures are also designed to control costs, Riter noted. That extends these concerns beyond compliance to the revenue cycle. It also emphasizes the need for interdepartmental coordination.
“The linkage between the strategy group and the patient experience teams and revenue cycle is one connection point that isn’t always strong. But this is a case where you need to have that connection point because there’s a concrete connection between charge master rates, payer-negotiated rates, the revenue cycle, and what patients are seeing publicly.”
We’re Here to Help
If you have questions about the potential impacts of regulatory activities, reimbursement constraints, and other priorities, please contact your Moss Adams professional.