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How Does Trumpcare Affect Providers' Reimbursements and What Can You Do to Prepare?

Monday, June 19, 2017   (0 Comments)
Posted by: Steve Selbst, Healthcents
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The purpose of this article is to help you, as a provider, plan for the possible upcoming changes in provider reimbursements and payer contracts due to “Trumpcare”.

The Evolution of the ACA into Trumpcare and Beyond

It was just seven short years ago that the Affordable Care Act (aka, Obamacare, ACA) came into play and we posed the same question. This is yet another reminder to providers, and all constituents in the healthcare ecosystem, that provider reimbursement is a dynamic and moving target.   First, relax and remember that the current proposals that recently passed in the House of Representatives are now being reviewed in the Senate and the Senate is likely to substantially alter the proposed changes to Obamacare. Therefore, we don’t have a clear picture of what the legislation will look like if, or when it will be approved. The American Health Care Act (aka Trumpcare) is in a dynamic and uncertain state right now.

What we do know is that there is discussion / debate about how much Medicare funding will be, and how state appropriations will happen. We also know that the proposal in play is to replace the current insurance mandate and exchange subsidies with tax credits.  And, there is a constant discussion about which benefits will be mandatory in health plans including maternity benefits and substance abuse / behavioral health benefits. While the precise implementation may change, it appears that some of the more popular benefits included in Obamacare, such as insuring patients up to age 26 and covering patients with pre-existing conditions will likely persist (though there is the possibility that if a patient’s insurance lapses for some period, coverage benefits may be lost. Further there is a possibility that states, in some way, will be able to apply for exceptions). Beneficiaries may also derive further benefits from HSAs (Health Savings Accounts).

So, how does all of this affect our current reimbursement for PPO, HMO and other plans?  What about value based reimbursement initiatives and ACOs? Are Health Insurance exchanges viable and will there continue to be product offerings on these exchanges and, for that matter, will the health insurance exchanges exist? Most importantly, how do providers hedge their risk and maximize reimbursement in this time of constantly changing health care reform, and what should you do now to prepare?

First, let’s explore the likely and practical effect on PPO, HMO, and other current commercial payer plans.  It is very likely that fee for service reimbursement will continue. There does not appear to be any initiatives in place that would substantially alter this landscape.  It also appears that health insurance companies will continue to provide plans, and that Medicare, Medicaid, and Medicare Advantage and Medicare supplement plans will continue. While there have been various attempts and pilots to reimburse for bundled payments and other alternative payment models, my experience suggests that this is still not a very common practice, and the practical problem with bundled payments is that the actuarial model and risk management is difficult for both the health insurance company and for the provider to agree on.

With possible changes due to Trumpcare, none of the proposed changes would seem to be the cause or impetus for any major structural changes to plans or to reimbursements.  While it is not a part of the initial legislation, there may be opportunities for providers to contract with payers outside of their state without the payer being required to get a license in another state that it builds a new network in. This could be an opportunity for providers to expand their foot print and patient bases by contracting with new payers.

Value based reimbursement is likely to persist because, regardless of the administration in power and their agendas. There are financial and treatment benefits to all involved. The most common form of value based reimbursement is the incentive on top of FFS (Fee for Service).

The health insurance exchanges appear to be in jeopardy.  It is possible that there will be new “high risk pools” that will be designed to help patients with chronic illnesses get better rates, but the details and implementation are unclear.  What is clear is that the proposal going forward would eliminate the insurance mandate and provide tax credits instead of the current health insurance exchange subsidies.

 

One other area to consider is if patient co-payment, co-insurance, deductibles, and out of pocket expenses will change. Most likely, we can expect high deductibles and patient obligations to persist. There is not anything apparent and on the immediate horizon that would affect this trend so the best thing to do is to prepare.  If state barriers are broken down, this could change in the future.

What should I do as a provider?

We are in a time of uncertainty and evolution in our healthcare system. However, since we have reasonable certainty that the basic plan structures will continue, as providers, I recommend that you take the following actions now:

  1.  Inventory and gather copies of all your current payer agreements, including amendments and review them.
  2.  Determine the duration of the agreement(s). Some renew annually with an option to exit or re- negotiate within a certain number of days prior to the anniversary date. Some are locked for at least a year and some are beyond.
  3.  For those agreements which allow you to terminate or make changes in the next 6-9 months, now is the time to take stock and re-negotiate these agreements.
  4.  Consider adding Complementary Payers to your payer mix: Assess complementary primary and secondary payers which can rapidly expand your network coverage and patient flow as well.
  5.  Patient Out of Pocket Expenses: The trend of higher portions of payments coming from patients vs. payers on claims is likely to persist. Make sure to deploy billing and collections processes that tighten patient collections.

 In summary, we are in a time of evolving healthcare legislation and reimbursement. Structurally, there does not appear to be a major shift in the kinds of payer contracts that we see in the market today. As a result, now is a great time to take the five steps outlined above to maximize your provider reimbursements.

 

About the Author

This article was written by Healthcents Inc’s Co-Owner and CEO, Mr. Steve Selbst.  Steve leads Healthcents’ business operations including contracting and provider reimbursement analysis. He is responsible for all of Healthcents Inc.’s business processes, contracts management, negotiations, and computing systems which are used to enable Healthcents to get providers maximum reimbursements on payer contracts. He has successfully negotiated over 15,000 payer contracts and is the inventor of RevolutionSoftware, Healthcents’ state-of-the-art web service product for payer contracts’ analysis. Under Steve’s leadership, many of the largest practices in the USA have become our reference accounts. Steve leads the development and delivery of our Blueprint for Success class, which is sponsored by medical associations such as the AUA, and teaches medical providers the “secret sauce” about how to negotiate payer contracts. Steve also is a featured speaker at many industry conferences for the AAOE, Coding Leader, Medtrade and others.  Steve can be reached at selbst@healthcents.com or 831-455-2174.


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