CLN Article

Federal Insider

Meaningful Use: Going Away, But Here to Stay?

The federal government’s meaningful use program that drove physicians and hospitals to convert from paper to electronic healthcare records (EHR) will soon become a thing of the past—but only insofar as new quality-focused payment models subsume and replace it, according to recent comments from regulator at the Centers for Medicare and Medicaid Services (CMS).

Seven years after Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 established the EHR incentive program, more than 97% of hospitals and three quarters of physician offices are “wired,” according to CMS Acting Administrator Andy Slavitt. Now, however, after healthcare providers have complained of being bogged down under increasingly complex regulations, CMS is promising a fresh approach, but one that will take time and leave most existing meaningful use requirements in place.

CMS’s plan is to rely on the quality-based physician payment reforms contained in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), also known as the “doc fix” bill, to reward providers not just for having and using EHRs but also for patient outcomes. Slavitt conceded that current meaningful use regulations have “created real concerns about placing too much of a burden on physicians and pulling their time away from caring for patients.”

CMS will issue regulations implementing MACRA later in 2016. All healthcare providers will be looking at these regulations closely to see just how CMS will evaluate not only EHRs, but also other quality indicators tied to patient outcomes that could determine physicians reimbursement—and priorities—for years to come.

Growing Deficit Could Drive Congress to Consider Cost Cutting

The Congressional Budget Office (CBO) released a report predicting that the federal budget deficit for 2016 will increase after 6 years in decline to $544 billion, $105 billion more than 2015, an ominous sign for future government healthcare spending and other big ticket federal outlays. At 2.9% of gross domestic product, the 2016 deficit will mark the first time that the deficit has risen in relation to the size of the economy since peaking at 9.8% in 2009.

CBO noted that the “increase is largely attributable to legislation enacted since August—in particular, the retroactive extension of a number of provisions that reduce corporate and individual income taxes,” referring to Congress’s December 2015 spending deal. In addition, recent laws to fund healthcare, such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), have not included tradeoffs to balance extra spending.

The government’s healthcare spending accounts for more than 60% of the projected growth in mandatory spending. 

Providers Take on New ACO Model

The Centers for Medicare and Medicaid Services announced that of the 121 new Accountable Care Organizations (ACO) participating in the 2016 program year, 21 health systems and other provider groups have agreed to the agency’s turbocharged Next Generation ACO model. Many analysts see this Next Generation model as the fast track to capitated payment and the end of the fee-for-service paradigm.

In some ways, the boundaries of Next Generation ACOs will blur compared to Medicare Advantage plans. Medicare Advantage plans are private insurers that take fixed monthly payments from Medicare and provide all necessary care to beneficiaries. The 21 Next Generation ACOs likewise will have the option, after 1 year in the program, of taking a monthly per-beneficiary payment and the full responsibility for these patients’ care. However, beneficiaries under ACOs may still choose to receive care from non-ACO providers, unlike under Medicare Advantage.

Overall, CMS drew 121 new participants across its ACO programs, with at least one in each of 49 states and the District of Columbia. In 2016, CMS estimates that 434 ACOs will serve nearly 8 million beneficiaries. CMS emphasized that these initiatives advance the administration’s goals to move, by 2016, 30% of traditional Medicare fee-for-service payments into alternative payment models that pay providers based on quality measures, and 50% by 2018.