CMS Expands Bundled Payments for 2015
The Centers for Medicare and Medicaid Services (CMS) is moving forward with plans to add more laboratory services into ambulatory payment classification (APC) codes for hospital outpatient care. CMS began including some clinical laboratory tests in these bundles in 2014, but in 2015, the agency will add codes for certain surgical pathology procedures, as well as immunohistochemistry, fluorescence in situ hybridization, and flow cytometry. CMS is showing that, despite outcries from professional organizations, it is determined to remain on a course that will pull more and more services out of fee schedules and into single, capitated payments.
When CMS bundles laboratory codes, it essentially amounts to a reimbursement cut for the laboratory, as well as more complex accounting and administrative burdens for hospitals. Medicare’s complex APC system works very differently than a traditional fee schedule. APCs are small bundles of related services that group outpatient reimbursement based on the service provided to the patient. They package closely related items such as venipuncture, medical/surgical supplies and equipment, and some pharmaceuticals.
The change not only affects labs, but patients as well, according to AACC comments on CMS proposals. Bundling laboratory tests within APCs means laboratory tests are included as part of the APC deductibles and cost-sharing arrangements, increasing the financial burden on consumers, particularly the elderly and the young, the association noted.
New CMS Proposal Aims to Improve ACOs
The Centers for Medicare and Medicaid Services (CMS) released a proposal to strengthen the Shared Savings Program for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and by using performance-based risk arrangements that are meant to attract wary providers.
Many ACOs have not been able to meet benchmarks, and some hospital groups have spurned the program, citing financial risk. In response, CMS now is proposing more flexibility for ACOs seeking to renew their participation in the program by making the transition easier to the so-called two-sided model. Under this model, the ACO risks financial losses if it does not meet benchmarks, but also can win a significantly higher share of savings if goals are met.
Another proposal could make those benchmarks more realistic. For example, CMS could make benchmarks more independent of the ACO’s past performance and more dependent on the ACO’s success in being cost-efficient relative to its local market. The agency also wants to find ways to reduce paperwork around claims data for ACOs. A 60-day comment period on the proposed rule ends February 3.
Report: Health Insurance Marketplace Remains Highly Concentrated
An elite group of large healthcare insurers dominate the market in most states, setting the stage for reduced competition under the Affordable Care Act marketplace, according to a Government Accountability Office (GAO) report. The report looked at data from 2010–2013, and is meant to lay the groundwork for future updates after full implementation of the Affordable Care Act.
Although at least two insurers participated in each state’s individual, small group, and large group health insurance markets in 2013, enrollment was concentrated among the three largest insurers in most states, the report found. In each of the three market segments, the three largest insurers had at least 80% of the total enrollment in at least 37 states; in more than half of these states, a single insurer had more than half of the total enrollees; and in 5 of these states, the largest insurer had at least 90% of all enrollees in at least one market segment. In 14 states, market segments were considerably less concentrated.
The report found that certain states were outliers. In Alabama, for example, Blue Cross and Blue Shield in 2013 controlled 97% of the small-group health insurance market, 92% of the large-group market, and 90% of the individual health plan market. In contrast, the top three insurers in 2013 controlled 100% of markets in rural and small states, including Mississippi, Montana, South Dakota, Vermont, and Wyoming.