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Orgs Offer Regulatory Relief to Boost Value-Based Purchasing

Providers face an extensive list of rules designed under fee-for-service that challenge their ability to implement necessary value-based purchasing capabilities, the groups stated.

Regulatory relief and value-based purchasing

Source: Thinkstock

By Jacqueline LaPointe

- In response to the recent CMS call for stakeholder feedback on how to provide regulatory relief, industry groups detailed ways to reduce red tape associated with value-based purchasing implementation.

Hospitals and individual providers have recently faced an increase in regulatory burdens, the American Hospital Association (AHA) recently stated. In 2016 alone, CMS and other HHS agencies published 49 rules, leaving hospitals and health systems to sift through roughly 24,000 pages of health policy. That number also does not include the rising use of sub-regulatory guidance, such as FAQs and blogs, to enforce administrative rules.

“In addition to the sheer volume, the scope of changes required by the new regulations is beginning to outstrip the field’s ability to absorb them,” wrote Thomas P. Nickels, AHA’s Executive Vice President of Government Relations and Public Policy.

Regulations that impede value-based purchasing implementation are among the top administrative burdens on hospitals and providers, the American Medical Group Association (AMGA) added.

The industry groups detailed a list of regulations that challenge hospitals and providers as they implement the necessary processes for value-based purchasing. The groups also advised policymakers and CMS on how to reduce the administrative burden.

Develop safe harbors for and exceptions to healthcare fraud prevention laws

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

The Anti-Kickback Statute (AKS) and the Stark law aim to prevent healthcare fraud and abuse by controlling how providers receive referrals and manage self-referrals. However, the regulations have prevented provider participation in value-based purchasing models that require increased care coordination.

“Federal legislation and regulations governing physician self-referral, collectively termed ‘Stark Law,’ were intended to prevent financial conflicts of interest around physician referrals in FFS [fee-for-service],” AMGA explained. “As Medicare transitions to value-based arrangements, the need for these protections and related self-referral and anti-kickback regulations are reduced, as incentives to overutilize healthcare services diminish.”

The AHA advised policymakers to create an AKS safe harbor for clinical integration arrangements. The safe harbor would create basic accountabilities for incentive payment and shared savings use among hospitals, physicians, and other providers.

The safe harbor and exception would cover activities that encourage accountability for care quality and cost, increase care coordination, and promote investment in value-based care infrastructure and care delivery redesigns. Any remuneration, including start-up and support contributions, would also be protected.

Clinical integration arrangements would qualify as long as the use of incentives and other assistance is documented and available to HHS on request, performance standards used to govern collaboration (eg, protocols, metrics used to award incentive payments) align with accepted medical standards, and performance is internally reviewed and disclosed to HHS upon request.

READ MORE: Key Strategies for Succeeding with Healthcare Bundled Payments

Although, the safe harbor should not “try to supplant, duplicate or recreate existing quality improvement processes or the mechanisms for monitoring quality of care in hospitals.”

Reimburse providers for telehealth services

Providers in value-based purchasing models have turned to telehealth and remote monitoring services to expand patient access to care. Telehealth tools supported self-management, improved patient outcomes, and increased patient satisfaction, the AMGA reported.

However, Medicare reimbursement policies limit telehealth and remote monitoring use. For example, the AHA stated that CMS approves novel telehealth services on a case-by-case basis and only pays for a small percentage of services delivered via telehealth.

Medicare reimbursement rules also restrict telehealth use to providers in rural areas and to patients in specific care settings.

The AHA suggested that Congress abandon the geographic and care setting requirements. Medicare should reimburse providers outside of rural areas for telehealth use.

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

AMGA advised policymakers to waive the geographic restrictions for telehealth use for all providers in value-based purchasing models as the federal agency does with Next Generation ACOs.

Make CMS bundled payments voluntary

The AHA called on Congress to make new bundled payment models voluntary. CMS uses both mandatory and voluntary bundled payment models to test innovative methods for reducing healthcare costs while maintaining, or improving, care quality.

However, the industry group contended that “hospitals should not be forced to bear the expense of participation in these complicated programs if they do not believe they will benefit patients.”

CMS recently canceled forthcoming mandatory cardiac bundled payment models and shrunk the scope of an existing compulsory model. The AHA urged the federal agency to continue on this path by ensuring all future bundled payment models are voluntary to ensure providers who are prepared for bundled payments are the ones participating.

Premier also urged policymakers to develop voluntary bundled payments that qualify as Advanced Alternative Payment Models under MACRA. CMS should also switch the compulsory Comprehensive Care for Joint Replacement model to a voluntary program.

Additionally, the industry group called on policymakers to allow participating providers more time to comprehend new bundled payments before introducing new models that involve the same provider type.

“It is understandable that several alternative payment models would be introduced in a short timeframe as the Innovation Center ramped up its activities,” stated the organization. “However, the continued rapid introduction of episode-based initiatives, each more expansive than its predecessor in scope, in overlapping geographic areas does not support an organized and orderly transition to value-based care delivery.”

Remove regulatory barriers preventing APM development and participation

CMS may be pushing on with value-based purchasing, but hospitals and providers are encountering regulatory barriers to implementing the necessary care pathways for alternative payment models. The rules specifically challenge care coordination efforts with post-acute care facilities.

Congress and CMS should eliminate regulations that impede a hospital’s ability to identify and place patients in the most appropriate clinical setting for short and long-term recovery, the AHA stated. Policymakers should also provide waivers for several other Medicare reimbursement rules, including the inpatient rehabilitation facility 60 Percent Rule, the inpatient rehabilitation facility Three-Hour Rule, and the homebound requirement for home health agencies.

The Medicare reimbursement rules dictate the type of care beneficiaries need to receive for providers to qualify for payment. However, the rules are outdated and prevent providers from making necessary referrals to post-acute care facilities.

Ensuring that patients go to high-value post-acute care facilities is key to alternative payment model success, especially with 90-day bundled payments or accountable care organization arrangements. Providers are financially accountable for patients even during the post-acute care period and CMS should grant providers flexibility to refer patients to post-acute care facilities that share their value-based care goals.

AMGA added that nursing home reforms are needed to support value-based purchasing implementation. The organization called on CMS to waive the Three-Day Rule that requires Medicare beneficiaries to have an inpatient hospital stay of no fewer than three consecutive days to qualify for Medicare coverage of skilled nursing facility care.

“The rule actually hinders timely and appropriate care, impedes care coordination, heightens the risk of iatrogenic harm from extended hospital stays, and is a burden on beneficiaries and their family caregivers,” AMGA wrote.

While waiving the rule could result in overutilization, value-based purchasing models should incentivize providers to limit skilled nursing facility use. Therefore, CMS should waive the Three-Day Rule for providers participating in alternative payment models.

Providers in value-based purchasing models should also receive a waiver for the preferred provider list for post-acute care, the industry group continued.

Premier also detailed several regulations that challenge an ACO’s ability to implement value-based purchasing and population health management.

The industry group recommended that CMS provide Medicare Shared Savings Program (MSSP) organizations with the option to choose prospective beneficiary assignment, allow all Medicare ACOs to apply for a skilled nursing facility Three-Day Rule waiver, grant waivers for other post-acute care payments rules that limit ACOs from referring their patients to the most appropriate treatment option.

Preserve tax-exempt status for hospital-based ACOs

Policymakers should release guidance that protects tax-exempt hospitals that participate in accountable care organizations (ACOs) sponsored by private payers, the AHA advised.

The IRS revoked an unnamed commercial ACO’s tax-exempt status in 2016 after the federal agency found that the ACO’s efforts were not considered charitable enough to qualify for non-profit status. The ACO’s primary function was to execute contracts and negotiate deals with commercial payers, rather than further the public good by coordinating care and providing patient services, the IRS argued.

In response, the AHA contended that the IRS ruling would penalize non-profit hospitals adopting “a modern approach to clinically integrated health care that holds the greatest promise for improving outcomes and reducing costs.”

By releasing IRS guidance, non-profit hospitals would be able to preserve their tax-exempt status while engaging in value-based purchasing models, such as ACOs, without violating charitable activities requirements.


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