2020 superimposed over an image of a hospital bed (Credit: Thinkstock)

The turn of the new year signals a time of preparation and reorientation for many brokers. With the craziness of open enrollment now behind us, it’s our instinct to gaze ahead to the unique challenges that the new year will bring.

Specifically, there are several regulatory requirements and changes likely to present new opportunities and challenges for health care industry stakeholders in the year ahead.

(Related: Health Care Record Hell Is Still a Problem: GAO)

Below are three key regulatory developments, their expected impact on health insurers, and how brokers can accelerate their readiness for 2020.

1. Value-Based Payments

The Centers for Medicare and Medicaid Services (CMS) continues to promote participation in value-based payment arrangements via alternative payment models (APM) with Medicare, Medicaid, and commercial payers, including Medicare Advantage organizations.

Moreover, momentum appears to be building. In late October, the Health Care Payment Learning and Action Network (LAN), a public-private partnership launched by the U.S. Department of Health and Human Services (HHS) to drive alignment in payment approaches across the public and private sectors, announced new timeline goals for linking health care payments to the value of care provided, rather than the amount of care provided.

The new goals for adoption of shared accountability alternative payment models include increasing the percentage of payments tied to quality and value to 50% for Medicaid and commercial health care expenses, and to 100% for Medicare Advantage and traditional Medicare expenses — all by 2025.

LAN’s new goals come as the organization sees progress in shifting to value-based health care payments. In examining data from 62 health plans and seven states — representing 227 million Americans — LAN found that in 2018, 35.8% of U.S. health care payments were made through shared accountability alternative payments, up from 34% in 2017.

Payers should expect to see a continued focus on expanding value-based payments, and, in turn, should seek to expand their ability to offer and administer flexible provider payment options, such as bonuses for performance and outcomes.

From the broker perspective, this increases the importance of familiarizing yourself with the nature of value-based payments, to conduct accurate cost analyses for clients.

Medicare Advantage plans, in particular, are looking for greater flexibility to leverage full-risk or global risk models. Plans use those models to pay provider groups a set amount for the plan population, transferring greater control over patient care and responsibility for patient outcomes to providers.

Full-risk models shift risk and reduce administrative costs, benefits that can be passed along to members in the form of lower premiums. However, to create models that are fiscally viable and drive improved outcomes, plans require modern and flexible core systems, as well as deep insight into performance and claims — capabilities that continue to elude many health care payers today. The informed broker should watch closely how providers adjust to account for these changing payment structures.

2. HIPAA

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) created the modern framework for personal health information privacy and data security.

In 2018, the HHS Office for Civil Rights (OCR) posted a record year in HIPAA enforcement activity. The office garnered $28.7 million, or 22% more than it collected in its previous record year — 2016. The office also finalized the single largest individual settlement in history — $16 million from a major health plan — reminding payers and brokers alike that the risks of non-compliance are great.

OCR made it clear that patient access to data was a growing focus when it announced that one of the main areas of HIPAA enforcement in 2019 would be HIPAA right of access failures, including untimely responses to access requests and overcharging for copies of medical records.

Industry observers believe that HIPAA may be in for a significant update in 2020.

Earlier in 2019, HHS closed comments around proposed changes to data sharing and care coordination rules — both of which would directly impact payers. Changes would include rule revisions to help data flow through covered entities, when needed, to support value-based and coordinated care. The industry awaits word on the final changes, but insurance agents and brokers should keep watch over the changing ways in which health care payers and providers are handling patient data.

Health care payers continue to face HIPAA compliance risk, especially as requirements around data sharing evolve and expand. The drive to give patients greater access to their data will challenge payers, along with providers, as they struggle with the burden of siloed legacy systems that cannot deliver the transparency and agility needed to meet changing mandates. The demand for modern data sharing is accelerating faster than many payers are evolving, and it would be wise to keep a close eye on which companies are keeping up and which are falling behind, potentially putting clients’ personal information at risk.

3. Interoperability

The Office of the National Coordinator of Health IT (ONC) continues its long quest for interoperability and expanding patient access to health information — a familiar theme in 2019 and for the year ahead.

The ONC released its proposed information blocking rule in February, outlining seven exceptions to the prohibition against information blocking and providing standardized criteria for application programming interface (API) development.

The ONC also issued a proposed interoperability rule that may require insurers participating in CMS-run programs to soon have the capability to give 125 million patients electronic access to their personal health information at no cost to the patients. Organizations that do not comply with the new regulations, which apply to nearly every organization handling patient medical records — could face substantial penalties.

It appears that the payer community is largely not prepared for these changes. Accenture surveyed 76 CIOs, CTOs, and VPs of IT at U.S. health care providers and health care payers with more than $1 billion in annual revenue. Only 26% of health care payers said they are “very familiar” with the rules; and only 26% said they are “very prepared” for them. Private payers will be required to adapt to the proposed changes in CMS-run programs. As such, they may also be spurred to carefully consider extending these interoperability standards more broadly across their commercial plans — something for brokers to note.

While the proposed rules establish some standards around the data elements that need to be exchanged, however, there isn’t a clear roadmap as to how payers must make APIs available. This can create challenges across the industry because, even though payers have the flexibility to set their own path, they still need to accept and consume this data from other payers and providers. With clear standards, this could prove very challenging. It also means that the dissemination of information regarding these changes will be stilted, requiring close monitoring by informed stakeholders to comprehend the state of industry interoperability.

The Next Steps

Health care payers will be using this recovery period in the new year to ensure that they are best prepared to capitalize on the technological opportunities that may arise from these regulatory changes.

As payers work to introduce new payment models, adjust their business rules and adhere to stringent compliance standards, brokers must stay abreast of new developments and adapt to the changing nature of health care. With the right mindset and vigilant monitoring, everyone can ensure a smooth start to 2020.

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Matthew Swendsen

Matthew Swendsen is a principal solution marketer at Oracle Health Insurance.