Two events that will impact our practices occurred in November: 1) an election and 2) the Centers for Medicare & Medicaid Services final rule. The election returned us to a split government with Democrats controlling the U.S. House and Republicans controlling the Senate (without a filibuster-proof majority). This means that ACA repeal and dramatic alterations to Medicaid will be off the table. Pressures on ACA’s margins will remain in both the legislative and judicial arms of government. Federal and state governments will continue to try to stabilize the individual markets by using reinsurance and premium support. The number of states expanding Medicaid eligibility will continue to grow (now at 37). There will be further pressure on drug pricing, likely targeted to Part B and 340b drugs. This will affect academic centers and hospital margins substantially.
CMS issued its final rule for the Physician Fee Schedule. AGA and the other GI societies have published a detailed member alert that can be found here. Key points involve simplified documentation for evaluation and management visits, site-neutrality reimbursement for clinic visits, identification of colonoscopy and EGD codes for CMS review, and changes in calculating practice expense, among others. MACRA rules are evolving with further pressure on practices and health systems to evolve into alternative payment models. Commercial insurers are finally near a tipping point in pressing for two-sided risk contracts. Practices should be alert for local and regional pressures around price transparency and narrow networks. Health systems (including academic centers) must plan for margin reductions due to changes in pharmacy reimbursement, network price tiering, a continued shift toward government payers, and other pressures that could drive large systems into the red.
For the first time since 1996, discretionary programs including NIH, CDC, AHRQ, and VA research all have been included in a budget (as opposed to a Continuing Resolution) that was passed by Congress and signed into law. This gives us some stability and predictability; however, the looming (and increasing) budget deficit will prompt Congress to increase fiscal pressure on domestic programs such as Social Security, Medicare, and Medicaid. Stay tuned and stay involved.
John I. Allen, MD, MBA, AGAF
Editor in Chief