After unsuccessfully trying to overhaul Obamacare and Medicaid, the Trump administration is now trying to put its stamp on Medicare.
The Centers for Medicare and Medicaid Services has issued a slew of proposed rules in recent weeks. They would change how doctors and hospitals are paid for treating senior citizens and give insurers in the Medicare Advantage program more control over the medications doctors can prescribe.
The agency says its proposals would give patients more control over their health care, reduce doctors’ paperwork, cut Medicare’s cost to taxpayers and help insurers lower drug prices. Health policy experts say some of the changes could ease seniors’ costs, but could also make it harder for them to see their doctor of choice or get medicines their physician recommends.
Here’s what the administration wants to do:
Change how doctors are paid for office visits
This controversial proposal would radically overhaul how the agency compensates physicians for the most common medical service – a doctor’s appointment.
Currently, Medicare has five levels of payments, ranging from a quick visit with a nurse to an in-depth evaluation of patients with cancer, heart failure or other serious illnesses.
The agency is proposing to reimburse doctors the same amount regardless of the person’s condition and the length of the visit. Some physicians would see their payments go up, but others – particularly specialists who treat complex medical issues – could get less.
The change aims to let providers spend more time with their patients and less on documentation, said Seema Verma, administrator for the Centers for Medicare and Medicaid Services. It would also allow doctors to reduce their office costs, potentially offsetting their reduced compensation from Medicare.
But it could also prompt doctors to cut back on the number of Medicare patients they see or limit the time they spend with seniors, requiring them to come back for additional evaluations, experts say.
“This would create incentives for many more short visits,” said Robert Berenson, an institute fellow at the Urban Institute who was in charge of Medicare payment policy at the agency during the Clinton administration.
Limit payments to hospitals for outpatient visits
Medicare currently pays more for a visit at a hospital off-site outpatient clinic than at a doctor’s office. That’s because the hospital can charge a so-called facility fee at these locations, which also can be a physician’s office that’s owned by the medical center.
The agency is proposing what it calls “site-neutral” reimbursements, meaning it would pay the same amount no matter where the patient is seen. It builds on the Bipartisan Budget Act of 2015, which limited payments to newly established off-site clinics.
“Medicare pays for things differently based on the site of care, paying more or less for the same service, but different locations,” Verma said in a speech last month. “Now sometimes it makes sense, as some facilities provide a higher level of service. But other times, it creates misaligned incentives – decisions about whether a patient receives a service in a hospital or in a doctor’s office is influenced by how Medicare pays.”
The move could save Medicare $760 million in 2019, and it would lower patients’ co-pays to an average of $9, down from $23, each time they visit an off-site clinic, according to the agency.
It would also reduce the incentives for hospitals to buy up physician practices, a trend that has accelerated in recent years and has led to less competition and higher prices, said Paul Ginsburg, director of the USC-Brookings Schaeffer Initiative for Health Policy. Ginsburg applauded the move, but thinks the agency could go even further in limiting hospital facility fees.
Hospital groups, however, say the proposal could impede patients’ access to care.
“While the agency inappropriately characterizes these clinic visits as “check-ups,” the reality is that hospitals serve some of the sickest, most medically complex patients in our clinics, evaluating them for everything from metastatic breast cancer to heart failure,” said Tom Nickels, executive vice president at the American Hospital Association, in a statement.
Give Medicare Advantage plans more control over medications
As part of its promise to lower drug prices, the agency will give Medicare Advantage plans more power over the medications physicians administer in their offices. These drugs, which are often for more complex conditions such as cancer, are paid for by Medicare’s Part B program, as opposed to the Part D drug coverage.
In employer-based coverage, insurers have more leeway over which medications they approve, sometimes requiring that patients try a less expensive drug first. The agency will now provide Medicare Advantage plans with this tool, known as “step therapy,” which it says will let these carriers negotiate prices and lower costs.
“By allowing Medicare Advantage plans to negotiate for physician-administered drugs like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use,” said Health Secretary Alex Azar.
This change could lower prices in some circumstances, but it likely won’t be widely used or lead to a lot of savings, said Juliette Cubanski, associate director for the Kaiser Family Foundation’s Program on Medicare Policy. That’s because many of these physician-administered drugs don’t have cheaper alternatives.
Also, it means patients would have to wait before they could receive the medication that their doctor feels is best for them.
“This is putting the [insurance] plan between you and your provider,” she said.
Curb Accountable Care Organizations
The agency wants to make significant changes to the main Medicare Accountable Care Organization program, which has 10.5 million participants.
Established by the Affordable Care Act, these organizations are groups of doctors, hospitals and other providers who voluntarily work together to better coordinate patients’ care and reduce health care costs by avoiding duplication of services and medical errors. Known as ACOs, they share in the savings they achieve for Medicare, but only a few are on the hook for any losses they generate.
The agency wants more of these organizations to share the risk if their spending per patient exceeds their targets. Currently, ACOs in the Medicare Shared Savings Program have up to six years before they must take on risk. The agency wants to reduce that to two years.
Many policy experts and even some officials in the Obama administration agree that ACOs should have more exposure to losses. But some fear that these changes could harm the effort of shifting health care from fee-for-service, in which providers are paid for each visit or procedure they do, to a more value-based system, where they are paid based on quality and health outcomes.
“It could be a real setback for value-based or alternative payments,” Ginsburg said.
The proposed changes would shake up the ACO industry. The agency projects that just over 100 – or roughly one-fifth – would drop out of the program. But the industry group for ACOs say that number would be much higher.