Latest / Becker’s Healthcare Podcast / Laura Dyrda on CMS Payment Changes, ACA Premium Increases, and Medicare Advantage Trends

Transcript

Laura Dyrda on CMS Payment Changes, ACA Premium Increases, and Medicare Advantage Trends · Becker’s Healthcare Podcast

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  - The strategic agenda facing hospital and health system
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  - at the Hyatt Regency in Chicago,
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  - Register on our events page at beckershospitalreview.com
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  - This is Scott Becker with the Becker's Healthcare
• 1:01
  - podcast.
• 1:02
  - We're joined today by Laura Dirda. Laura is
• 1:04
  - the editor in chief at Becker's Healthcare.
• 1:06
  - She joins us regularly to talk to us
• 1:08
  - about issues that she's watching in health care
• 1:10
  - and and what's top of mind.
• 1:12
  - Laura, let me turn it to you and
• 1:13
  - ask you what are a couple of the
• 1:14
  - issues that you're watching. And at some point,
• 1:17
  - for people that don't listen regularly, you might
• 1:19
  - not know this, but Laura is a huge
• 1:21
  - Chicago White Sox fan. And the Chicago White
• 1:23
  - Sox have had the biggest turnaround in Major
• 1:25
  - League Baseball. They three one hundred lost seasons
• 1:27
  - in a row. This year, they're winning the
• 1:29
  - division. So at the very end of the
• 1:31
  - call, I'll ask Laura also for assessment about
• 1:34
  - the White Sox and where they're going this
• 1:35
  - year. Laura, let me teed up and start
• 1:37
  - with health care. What are you watching closely
• 1:40
  - currently?
• 1:41
  - Absolutely. Well, thank you so much, Scott. And,
• 1:43
  - yes, there are many stories we're watching very
• 1:45
  - closely both on the health care as well
• 1:47
  - as White Sox side. But, you know, one
• 1:49
  - of the things that, we have been reporting
• 1:52
  - on and will continue to do is some
• 1:54
  - updates on CMS payment schedules.
• 1:57
  - In the last couple days, CMS has finalized
• 1:59
  - its fiscal twenty twenty seven inpatient payment rule,
• 2:02
  - and there's a lot for hospitals and health
• 2:04
  - systems to unpack. I think first, when you
• 2:06
  - look at the money, hospitals are getting a
• 2:07
  - 2.3%
• 2:08
  - pay increase, which is just under what CMS
• 2:11
  - proposed back in April. And the total inpatient
• 2:14
  - payment rises is about 2,100,000,000
• 2:16
  - along with new technology add on payments jumping
• 2:19
  - to around $779,000,000.
• 2:21
  - So not quite as much as hospitals were
• 2:23
  - expecting to look at the increase, but, also,
• 2:25
  - you know, a lot of other factors are
• 2:28
  - playing into how hospitals and health systems are
• 2:30
  - thinking about pay for next year. And one
• 2:32
  - of those things in in perhaps the bigger
• 2:35
  - story coming out of new payment rules is
• 2:37
  - the mandatory bundled payments.
• 2:39
  - CMS finalized its CJRx, which is the first
• 2:42
  - mandatory nationwide
• 2:43
  - episode based payment model covering hip, knee, and
• 2:46
  - ankle replacements.
• 2:48
  - And now we'll start on 01/01/2028.
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  - That is pushing it back a quarter from
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  - its original start date.
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  - Most of the inpatient
• 2:55
  - payment system hospitals will be on the hook
• 2:58
  - for spending across the surgery, hospitalization,
• 3:01
  - the first ninety days of recovery
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  - within those bundles, and that's something that at
• 3:06
  - hospitals,
• 3:07
  - some have been doing for a while as
• 3:08
  - they participate in these programs, but most haven't
• 3:11
  - really consistently
• 3:12
  - seen a huge, huge value from doing that
• 3:14
  - or or been doing that for all patients.
• 3:16
  - So,
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  - it'll be a big change for hospitals we're
• 3:19
  - looking at, especially, orthopedic procedures that are more
• 3:22
  - high revenue, high dollar procedures.
• 3:25
  - The has already pushing back on this saying
• 3:27
  - the low volume threshold doesn't really give hospitals
• 3:30
  - enough cases to actually manage outcomes
• 3:33
  - way that they might need to. So,
• 3:36
  - there's something that is really important for hospitals
• 3:39
  - across the board to be thinking about and
• 3:40
  - looking at. And then
• 3:42
  - another element that is thrown in there too
• 3:45
  - is,
• 3:46
  - special payments for rural and small hospitals will
• 3:49
  - expire 12/31/2026,
• 3:51
  - the last congress acts. And so,
• 3:54
  - for these small hospitals and rural hospitals that
• 3:56
  - have been depending on, some of these funding
• 3:59
  - sources,
• 4:00
  - you know, they're really, really advocating strongly for
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  - those to continue
• 4:05
  - as many are facing additional financial challenges and
• 4:08
  - constraints as they're trying to serve their communities.
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  - And even the the large,
• 4:13
  - regional and and academic centers are hoping that
• 4:17
  - these continue as, you know, if hospitals close
• 4:20
  - those,
• 4:21
  - hospitals and systems in in the,
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  - regional larger hubs will have to figure out
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  - how they're gonna accommodate to provide care for
• 4:29
  - those patients,
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  - within the rural communities and small hospitals. So
• 4:33
  - those institutions play a really important role in
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  - the broader health care ecosystem that it'll be
• 4:37
  - important for them to continue to stay funded
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  - in a meaningful way and,
• 4:42
  - looking at how they can, continue their operations
• 4:45
  - and provide services for their communities.
• 4:47
  - And then finally, when we're looking at quality
• 4:49
  - measures, CMS said it will hold Medicare Advantage
• 4:52
  - data into the mortality and readmission measures and
• 4:55
  - adding some new substance readmission measures that will
• 4:58
  - start affecting,
• 4:59
  - payment in the 2030 fiscal year.
• 5:02
  - And and so hospitals and systems,
• 5:04
  - as they're
• 5:05
  - making sure they understand what those quality metrics
• 5:08
  - are, we'll have to deliver on them and
• 5:10
  - and just be very, very sharp with especially
• 5:12
  - the new sepsis readmissions measures so that their
• 5:14
  - payment isn't impacted,
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  - in in a few years.
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  - Thank you very, very much. And what are
• 5:21
  - hospitals saying about the increase, the 2.3%
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  - increase,
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  - happy, unhappy? What does that look like?
• 5:28
  - Yeah. Yeah. Yeah. I mean, I I think,
• 5:30
  - you know, by and large, hospitals and health
• 5:32
  - systems for sure want,
• 5:34
  - you know, are in kind of a a
• 5:37
  - financially strapped situation in many ways. So,
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  - you know, I think they wish that the
• 5:42
  - increase was more and think that the value
• 5:44
  - that they provide,
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  - should be
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  - rewarded as such. I think many of the
• 5:48
  - payments have been
• 5:50
  - flat or or, you know, not really keeping
• 5:53
  - up with what inflation has been, what it
• 5:55
  - it's taking to spend on the workforce and
• 5:58
  - supplies and everything else, the technology that is
• 6:01
  - required to provide,
• 6:03
  - high quality health care today. And so,
• 6:06
  - putting them into a bit more of a
• 6:07
  - a pinch than they would like to see
• 6:09
  - with these Medicare payments. And, of course, in
• 6:12
  - many ways, the, commercial insurers are
• 6:16
  - basing their payments off of what Medicare is
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  - doing. And so more often than not, we
• 6:21
  - see people really wanting and advocating for those
• 6:24
  - deeper increases
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  - in more recognition of what they're doing in
• 6:28
  - order to provide care for their communities and
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  - assuming responsibility
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  - for the patients at large.
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  - Thank you. No. Fasting to watch. I know
• 6:38
  - we're still in a spot where 60% of
• 6:39
  - hospitals are in the black, 40% are in
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  - the red.
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  - So still plenty around there approximately.
• 6:45
  - So so plenty of challenges being faced by
• 6:47
  - health systems and reimbursement.
• 6:50
  - Anything else you're watching,
• 6:51
  - that we didn't cover yet?
• 6:53
  - Yeah. Yeah. Well, along these same lines, I
• 6:56
  - think the other big report that came out
• 6:58
  - on August 3 was looking at,
• 7:01
  - ACA marketplace insurers.
• 7:03
  - Those insurers are proposing a a median rate
• 7:06
  - increase of 15%
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  - for 2027,
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  - and that's the second straight year of double
• 7:12
  - digit hikes, according to a Peterson Kaiser Family
• 7:15
  - Foundation health system tracker report.
• 7:18
  - Some of those key drivers on the medical
• 7:19
  - side are that insurers,
• 7:21
  - point to about a 10%
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  - median medical trend
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  - increase for, 2027,
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  - citing in the inflation, labor shortages,
• 7:31
  - claim severity, then also thinking about GLP one
• 7:34
  - drugs and and demand usage there, provide our
• 7:37
  - consolidation as well as disputes around the no
• 7:39
  - surprises act between
• 7:41
  - patients and, or, excuse me, between health care
• 7:44
  - providers and insurers.
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  - But the policy
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  - is
• 7:48
  - actually doing a lot of work here too.
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  - Insurance companies flagged that
• 7:53
  - expiration of the enhanced premium tax credits is
• 7:56
  - one factor that is,
• 7:58
  - boosting rates because it,
• 8:01
  - it is shrinking the risk pool and and,
• 8:03
  - healthier people are still the ones most likely
• 8:05
  - to drop coverage when subsidies shrink. And so
• 8:08
  - that's leaving insurers with sicker and and costlier
• 8:11
  - pool of patients.
• 8:12
  - And then after the subsidy premium payments already
• 8:15
  - rose 58% on average this year, and so
• 8:18
  - looking at more next year, will be particularly
• 8:21
  - challenging for a lot of those patients that
• 8:23
  - really need that health insurance.
• 8:25
  - And then regulatory changes in along with HR
• 8:28
  - one,
• 8:29
  - that will go into effect next year are
• 8:31
  - cited as factors as well within some of
• 8:33
  - these challenges.
• 8:34
  - And then proposed changes for 2027, the range
• 8:38
  - from about a 1% decrease to around 54%
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  - increase,
• 8:42
  - with most insurers landing between a 10 to
• 8:44
  - 25%
• 8:45
  - increase. And that's really important for,
• 8:48
  - all in health care to understand. Obviously,
• 8:51
  - as the insurance becomes more expensive on the
• 8:53
  - marketplace, it is possible that,
• 8:56
  - there'll be fewer people that decide to purchase
• 8:59
  - it, and go that route. There may be
• 9:01
  - more uninsured patients, more uncompensated
• 9:03
  - care, and hospitals and systems are preparing for
• 9:05
  - that reality, not only for those who may
• 9:08
  - not be eligible for Medicaid next year,
• 9:11
  - but also for these folks too who may
• 9:13
  - decide not to repurchase or or purchase through
• 9:16
  - the ACA marketplace because,
• 9:18
  - the insurance increases are are too high. So,
• 9:21
  - it's definitely gonna be an interesting landscape towards
• 9:24
  - the end of the year as we look
• 9:25
  - at insurance coverage, and,
• 9:28
  - executive teams have the work cut out for
• 9:30
  - them to make sure there's access to care
• 9:31
  - and and understand what they're gonna need in
• 9:33
  - order to be ready for additional,
• 9:36
  - uncompensated
• 9:37
  - care and uninsured patients.
• 9:39
  - Thank you. And you do see sort of
• 9:41
  - some
• 9:43
  - slight reduction in total number of people in
• 9:45
  - Medicare Advantage
• 9:47
  - or or the percentage.
• 9:49
  - Is that accurate?
• 9:51
  - Yeah. I
• 9:52
  - that that's been what, you know, we we've
• 9:54
  - seen from the reporting, when you're looking at
• 9:57
  - Medicare Advantage. I think, obviously,
• 9:59
  - it differs based on, which aspects of Medicare
• 10:02
  - Advantage you're looking at. But, you know, I
• 10:04
  - think it is obviously heavily marketed to patients
• 10:07
  - and something that,
• 10:10
  - you know, on the starkness of it seems
• 10:12
  - like it provides a lot of benefits. But
• 10:14
  - as many health care providers know on the
• 10:15
  - back end, it can be just such a
• 10:17
  - challenge
• 10:18
  - to administer and,
• 10:20
  - may not always provide the benefits that,
• 10:23
  - these Medicare Advantage Plans,
• 10:26
  - in the same way that say they do.
• 10:27
  - I think we've heard,
• 10:29
  - just about a good number of denials coming
• 10:31
  - through some of these plans. And so, you
• 10:33
  - know, as,
• 10:34
  - patients and and,
• 10:37
  - beneficiaries and members
• 10:38
  - have that experience, they may decide to do
• 10:40
  - something different, or we may see, continued increases
• 10:43
  - in the Medicare Advantage Plans just because of
• 10:46
  - how
• 10:47
  - much they've been able to kind of integrate
• 10:49
  - themselves within,
• 10:51
  - the Medicare beneficiary population.
• 10:54
  - No. Thank you so much. And it does
• 10:56
  - seem like you you are seeing some more
• 10:58
  - insurers exit some Medicare Advantage markets
• 11:01
  - and also some health systems exit their contracts
• 11:03
  - with Medicare Advantage payers, but fasting to watch
• 11:05
  - a sort of tipsy topsy, you know, up
• 11:07
  - and down of the Medicare Advantage market and
• 11:09
  - where that's going. Wow.
• 11:11
  - But, Laura, as always, I I wanna thank
• 11:13
  - you so much for joining us today on
• 11:14
  - the Beckers HealthCare podcast. I always learn something.
• 11:17
  - Thank you for joining us. You do a
• 11:18
  - fantastic job. Thank you very, very much. Absolutely.
• 11:21
  - Thank you, Scott. It's always a pleasure.