Baker Tilly healthcare update October 29, 2014

At the agencies

On October 23, the Department of Health and Human Services (HHS) announced that the agency is launching the “Transforming Clinical Practice Initiative,” a program intended to improve healthcare quality while lowering costs. The program will provide grants to group practices, healthcare systems, and provider associations to explore solutions for lowering costs and improving care to patients. The grants will total $840 million and will be disbursed through the Centers for Medicare and Medicaid Services (CMS) Innovation Center. The program would focus on the creation of a peer-to-peer system in which successful, innovative approaches to improving care and lowering cost would be shared with all providers nationwide. 

On October 15, CMS announced details on its Accountable Care Organization (ACO) Investment Model, which will be open to certain types of ACOs in the Medicare Shared Savings Program. Under the initiative, CMS will provide pre-paid shared savings to encourage ACOs in rural and underserved areas to join the program and encourage current ACOs to take on additional financial risk. In other ACO news, on October 16, the HHS Office of Inspector General (OIG) announced that it would extend until November 2, 2015 the waivers that it had established in 2011 regarding the federal anti-kickback statute, the physician self-referral (Stark) law, and certain civil monetary penalty provisions. The HHS OIG is also requesting input on the waivers regarding their effectiveness and whether changes should be made to the waivers. 

The HHS OIG released a report regarding Medicare beneficiary payments for outpatient services received at critical access hospitals (CAH). Currently, CAHs are reimbursed at 101 percent of their reasonable costs, while most other types of hospitals are paid under the Medicare outpatient prospective payment system. Beneficiaries that receive services at CAHs pay a co-insurance amount that is based on charges. The OIG found that in 2012, Medicare beneficiaries paid approximately $1.5 billion in coinsurance for CAH outpatient services, an amount that was nearly 50 percent of the cost of the services. The OIG recommended that CMS request from Congress the authority to modify the methodology used to calculate CAH reimbursement. 

Third parties

On October 21, the American Medical Association (AMA) sent a letter to CMS requesting the agency reevaluate the amount of regulatory penalties that providers are facing over the next 10 years. The letter claims that providers could see payments cut by more than 13 percent over that 10 year period. In the letter, the AMA highlighted the Electronic Health Record program, the Physician Quality Reporting System, and the Value-Based Modifier program as the three key Medicare programs that could affect provider payments and access to care. 

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.