- Value-based purchasing for hospital outpatient departments and ASCs
“Beginning in CY 2021, CMS will implement a value-based purchasing program for hospital outpatient departments and ambulatory surgical centers (ASCs), offering them incentives to improve quality and health outcomes,” the budget-in-brief document says. Two percent of payments would depend on quality and outcome measures under a budget-neutral system.
- Get ready for more prior authorization requirements – from Medicare
While hospitals and physicians seek ways to reduce the burdens of prior authorizations, the Administration is proposing to vastly increase CMS’ authority to require them.
The budget proposal says, “current law restricts Medicare’s ability to use this tool on all but a few fee-for-service items and services. This proposal extends the narrow existing authority to all Medicare fee-for-service items and services, specifically those that are at high risk for fraud and abuse,” claiming that CMS can reduce improper Medicare payments by $6.3 billion over 10 years.
Nothing in the budget documents explains which fee-for-service items the Trump Administration regards as being “at high risk for fraud and abuse.”
Congressional action would be required, but this item might be worth worrying about. Congress won’t suffer a huge public political backlash if it were to expand prior authorizations, especially if the case can be made for $6.3 billion in savings by making physician office staffs work harder to get procedures authorized. AAOS didn’t comment on this proposal, so maybe its effect on orthopedics is minimal.
- Replace Medicaid with state block grants: This won’t fly
The budget proposes a version of the so-called Graham-Cassidy-Heller-Johnson bill, which failed in 2017 as a bill and in 2018 as a Trump budget proposal when Republicans held both houses of Congress.
Among other actions, it would replace federal Medicaid funding with a block grant system HHS Secretary Alex Azar calls the “Market-Based Health Care Grant Program.” The Kaiser Family Foundation published a summary of the reductions in health care coverage under Graham-Cassidy, “5 Ways the Graham-Cassidy Proposal Puts Medicaid Coverage At Risk,” in 2017. The Trump budget adopts the same ideas as Graham-Cassidy, but it’s stingier.
A White House summary also says the budget includes “proposals to align the Market-Based Health Care Grant Program, Medicaid per capita cap, and block grant growth rates with the Consumer Price Index (CPI-U) and to allow States to share in program savings.”
Since health care spending tends to rise faster than the CPI-U (Consumer Price Index for All Urban Consumers), the net effect would be that states would individually decide where to spend healthcare funds. Available funds would effectively diminish each year against need.
Also, the Trump budget proposes higher Medicaid copayments, work requirements for Medicaid, and an end to zero-premium Obamacare plans, all of which would create financial impediments for patients needing medical care.
While Medicaid in most states doesn’t cover the most common big-ticket orthopedic procedures (knee and hip arthroplasties and complex spinal procedures), the website doctor.com lists 13,763 orthopedic surgeons who accept Medicaid. AAOS estimates that there are about 25,500 orthopedic surgeons practicing in the U.S., so more than half of all orthopedic surgeons could potentially see some negative effects if these proposed changes in Medicaid were to pass.
However, this change doesn’t seem to stand a chance of becoming law with Democrats controlling the House, and with the history of opposition from Republicans on Capitol Hill.
