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.
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.
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.