What Should You do About Medicare for All?
CONTRACTED REIMBURSEMENT STRATEGY
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Some consultants like to up the drama of the industry by telling scary tales about change and Medicare for All.
While Medicare for All is a hot policy topic among presidential candidates, it isn’t a “thing” yet. There’s nothing you can do about it, or to prepare for it at the moment. You can listen and pay attention to debates about pros and cons but until there’s a policymaker elected and laws or regulations drafted and ready for a vote, there’s nothing else to do – for now.
Instead, prepare for a few other changes that are actionable or about to become so. For example:
- HHS is rewriting the rules for the Stark Law, or physician self-referral, and will issue a proposed rule later this year. That will set up 2020 as the year to debate the proposed changes and a broader discussion about the role of Stark in managed care. It is happening because in a value-based, collaborative setting that has evolved in managed care, Stark is outdated.
- Price transparency. Whether the AHA lawsuit prevails or not, the market wants meaningful price transparency; not a peek at your chargemaster. Bundled, reliable, transparent price for services will be the market’s battle cry. To do this, you must know your costs and how to create bundles. I prepared the software for all of you, but it seems to be sitting on the counter getting cold. Come to the table. Supper’s ready. I am offering free beta testing accounts for a year. Get in touch with me at 800 727 4160 to sample how it works in your organization and give me some feedback. And be careful about with whom you partner. You may publish a price and some of these web listing directory and shoppable sites may adulterate your published prices with their own increments that make your services one price on one website and another price on your own website. A confused customer does not buy. Will your prices be driven down as a result of the shoppable price competition? Of course it will. That’s freshman level. Get over it and deal with it. You want a better price? Build a better “product” with better “value” as defined by the buyer. Don’t build in valueless features that consumers don’t want or don’t appreciate.
- Expect episodic payments for an episode of care to proliferate. Know your costs to deliver the care and define the beginning and ending of the episode in clear, unambiguous terms. Then set your price. When setting the price differential between cash pay and carrying the accounts receivables on the books for however long it takes to chase and get paid, consider that cost to collect is about 28% of revenue and that roughly 14% of all claims are wrongly denied or delayed and monetize that into the pricing logic you’ll design and implement.
- Reference-based pricing. There’s no really valid reason to say yes to RBP offers. They are dangerous and I believe they are a fad that will be short lived. On the other hand if the price offered is fair, just accept the number but not the reference basis. The risk lies in the reference basis. If they pay a percentage or multiple of Medicare, and Medicare rates stagnate or go down, you are in a tough spot. And remember to carefully consider the matters of balance billings. If you are non-participating, also remember that an RBP pricing agreement is a one-sided contract. You are granting a discount without any benefit of steerage or other contractually understood protections. Negotiation is give and get…not give and give. If you enable that, you make your bed.
- Revisit and update contracted reimbursement strategies. Is it time to review what’s in the portfolio and cancel some contracts? Contract directly with employers and TPAs? Are the old rules, terms and conditions still relevant? Let me put it to you this way: If my publisher has asked me to write The Managed Care Contracting Handbook, 3rd edition, do they know something you don’t know? I am revising many of the old standards with which we’ve become comfortable. Why? Because times have changed and the rules and conditions of the marketplace have too. Old contracts create risk of nonpayment, irrelevance, denied claims that must be reworked at no additional ROI, and outdated methods that are unsupported by claims adjudication software and payment rules.
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