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CMS UPDATE:

What 2019 Medicare Fee Updates Mean for the Road Ahead

Silos are breaking down across the health continuum as consumers take the driver’s pus designated hospital
seat. At the same time, regulatory changes from CMS are speeding up the broader outpatient centers over
transformation of the U.S. healthcare system. three years (70%/40%/0%
Here, we break down the latest CMS provider fee schedule changes and what they in 2019-2021). In this
mean for the broader industry: manner, CMS will reim-
burse for these services the
2019 Medicare Payment System Updates (per Medicare) % Change $ Increase same as within the
Projected Physician Fee Schedule.
• Ambulatory Surgery
Hospital Inpatient Prospective Payment System (IPPS) 1.80% 4.8 Billion Centers vs Hospital
Uncompensated Care Payments to hospitals 18.10% 1.5 Billion Outpatient Surgery
Skilled Nursing Facilities 2.40% 820 Million Departments: CMS is
Home Health Agencies 2.20% 420 Million beginning to reduce the
Long Term Acute Care Hospital Prospective Payment System 0.90% 39 Million BY CHAD BESTE AND RACHEL LAURENO cost differentials between
Ambulatory Surgery Centers 2.10% Not Stated reimbursement of the two.
Hospital Outpatient Prospective Payment System (OPPS) 1.35% Not Stated • Payer Mixes: CMS’s
Physician Fee Schedule 0.10% Not Stated emphasis on payment differentials between sites-of-service will open the door more
broadly to other commercial payers and make it increasingly challenging for hospitals
The federal government, which controls about half of all U.S. healthcare spending to maintain their historic pricing advantages for outpatient services across their payer
(Medicare and Medicaid programs), has truly become the most innovative “payer” in mixes.
its efforts to transform healthcare from a fee-for-service system to a value-based one. BDO’s Quick Take: To survive, hospitals must transform their traditional assets to
Within each provider fee update, we’ve identified some common themes: serve a model of care that’s centered more on patient convenience—and available at
the patient’s fingertips.
1. Patient-centricity
Streamlining Documentation & Payment Changes for Physician Visits
Transparency and Performance Updates CMS has historically had five different reimbursement levels for “office visits,”
CMS will require hospitals to publish a public list of its standard charges, a first step depending on the complexity of the visit. The agency originally proposed to simplify
aimed at providing greater pricing transparency to patients. both the rules and reduce the number of reimbursement levels to two.
CMS has also updated its Nursing Home Compare program available to patients. CMS announced that it would phase this change in over three years. For most
CMS has significantly increased data and information available to patients as well physicians, this is positive step. Coding accuracy for office visits is exceedingly com-
as cost and utilization information available to the public. plex, and physician organizations spend an inordinate amount of time complying
with existing rules. Physicians will have some additional time for either more direct
Prioritizing Patients over Paperwork face-to-face interaction with patients and/or they’ll spend less time completing the
CMS announced numerous measures—across provider types—aimed at reducing coding for patient encounters from the previous day.
costs associated with the administrative burdens its programs have adopted over the
years. This is new and much needed. Care at Home
The trend away from inpatient care is only going to quicken, and home care is going
2. Using Technology to Innovate Patient Care to explode.
CMS is recognizing new, innovative ways of patient care that don’t require leaving
Expanded Telemedicine Reimbursement the home, whether that means providers come to them, or they use telehealth services
CMS continues to expand its reimbursement of non-facilities-based care, in a nod to treat them or even technology-enabled tools like those that enable remote patient-
to how technology is transforming healthcare. The agency announced greater com- monitoring.
pensation for technology-enabled “virtual check-ups” and other telehealth services. BDO’s Quick Take: By 2020, healthcare organizations say they plan to invest most
BDO’s Quick Take: True pricing transparency will likely be created through the out- in home health to prepare for the growth of the aging population. As CMS reimburse-
let CMS is upping reimbursement in: technology. ment for home health models—and technologies that support them—expands, this
trend will quicken.
Reading the Regulatory Signs Ahead
In 2019, significant updates are expected that we believe will have a lasting impact Chad Beste is Partner and Rachel Laureno is Director,
on the national dialogue related to health care costs including site neutrality, stream- BDO Center for Healthcare Excellence & Innovation.
lining documentation and payment changes for physician visits, home care and
uncompensated care audits. Our South Florida healthcare leaders are ready to address
your complex and unique needs:
Site Neutrality Alfredo Cepero, Managing Partner
Controversial in nature because of the historically hospital-centric way the U.S. 305-420-8006/ acepero@bdo.com
health system has functioned, CMS is looking to neutralize payments across provider
types. This is aimed to make payments fairer between hospitals and other provider Angelo Pirozzi, Partner
types, including changes related to: 646-520-2870 / apirozzi@bdo.com
• Physician Services: CMS will phase out its additional reimbursement of off-cam-

6 January 2019 southfloridahospitalnews.com South Florida Hospital News