MHA Today | January 25, 2019

January 25, 2019
MHA Today: News for Healthcare Leaders

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January 25, 2019

MHA Today is provided as a service to members of the Missouri Hospital Association. Additional information is available online at MHAnet.


Herb Kuhn, MHA President & CEO In 1965 when Medicare was launched, if you had asked what role nurse practitioners or physician assistants would play in the delivery of care, it would have been nearly impossible to get a straight answer. Originally, Medicare policy covered physician services and those “incident to” the service a physician would provide. Since NP and PA programs were created during that era, with the first graduating class coming a few years later, how these providers would fit into the payment and care delivery setting wasn’t clear. As a result, they were largely bootstrapped as “incident to” physician services.

Today, NPs and PAs have a large and growing role in the delivery of care, especially primary care. As part of its annual review of Medicare payment programs, the Medicare Payment Advisory Commission recently discussed a recommendation to eliminate the “incident to” billing requirements for these providers.

Currently, there are two systems for Medicare payment for NPs and PAs — direct billing for their services or as “incident to” physician professional services. However, if the NP or PA bills directly, they are paid 85 percent of the physician fee schedule for the service.

As MedPAC explored this issue, it became clear that “incident to” billing was probably never intended to cover NP and PA services, given, according to MedPAC, the practitioner categories didn’t exist when Medicare was launched. This led to speculation that the “incident to” billing provision probably was targeted at nonlicensed providers. Medicare was largely a passive payer when it was first created — simply paying bills when people got sick. Evidence suggests that the current “incident to” options for NPs and PAs reflect that policy.

Even with this lack of clarity, NP and PA clinical programs grew over time, including significant growth throughout the past decade. Between 2010 and 2016, Medicare fee-for-service payments grew by 158 percent for NPs and 118 percent for PAs. In-office visits for NPs and PAs grew by 149 percent during the same time period, compared to a drop of 13 percent for primary care physicians. This suggests that NPs and PAs are billing for primary care services that once were the domain of physicians.

The growth of Accountable Care Organizations — where NPs are a preferred provider, rather than a participant — may be putting spur to this growth. After all, NPs and PAs can deliver primary care at a lower cost if they are paid at 85 percent of the physician rate.

Medicare data show that about half of NPs work in primary care, compared to 27 percent of PAs. The numbers for both categories are declining. However, defining what is driving that change is difficult because Medicare does not differentiate NPs and PAs by specialty.

State licensure laws, also known as the scope of practice, complicate matters as well. As MedPAC staff shared, just under half of the states permit these clinicians to practice without significant constraints or limitations. Sixteen states impose a moderate level of oversight, and 12 states have constraints that are more significant. Missouri wasn’t identified in the discussion, but most observers would put Missouri in that final category.

MedPAC staff saw several advantages of lifting the “incident to” billing requirement. First, the Medicare program would save money since payments for all of these services would be at 85 percent of the physician fee schedule. Additionally, if CMS captured specific data on who actually delivered the service, they could create a real and valid comparison between physician, NP and PA services. Finally, they believe it could help improve fee schedule payment rates since the current 85 percent threshold is completely arbitrary.

So what’s the impact of this recommendation on states like Missouri? Given the great variation in state scope of practice laws, MedPAC doesn’t see this having an impact on state laws. They believe that in some ways, the “incident to” provision is more restrictive than most state licensure requirements. Further, they don’t see this change as altering the current trajectory of registered nurses moving into the NP world. There currently is a natural progression of nurses becoming NPs — and that has been mostly positive for the health care system. This advancement, however, is creating more pressure on the shortages that currently exist in the nursing profession. But it’s a logical transition since NP training and education have historically been focused on independent practice. Historically, PAs have largely been part of a physician team.

MedPAC found no discernable difference in quality between states with strict scope of practice laws versus those with less restrictive requirements. But a possible downside could be the loss of team-based care. By separating this billing, does Medicare fragment this concept? Further, by eliminating the “incident to” option, would this lead to fewer resources in an already underfunded primary care field? Ultimately, MedPAC unanimously adopted the recommendation. And, their discussion over this one rather arcane provision demonstrates the complexity and often arbitrary design of our health care system.

Policy problems that clearly were not imagined in 1965 have the capacity to cascade in many different directions and lead to both intended and unintended consequences. Nonetheless, what happens matters for Missouri and similar states — 99 of Missouri’s 101 rural counties are designated health professional shortage areas. NPs and PAs will be essential to filling this need in rural Missouri and advancing health through care coordination throughout the state and the health care system.

Drop me a note to let me know your thoughts.

Herb Kuhn, MHA President & CEO

Herb B. Kuhn
MHA President and CEO

In This Issue
MACPAC Issues Hospital Payment Recommendations
White House Roundtable Addresses Transparency, Coverage And Surprise Billing

state and federal health policy developments

MACPAC Issues Hospital Payment Recommendations

Staff Contact: Daniel Landon

At its Jan. 24-25 meeting, the Medicaid and CHIP Payment and Access Commission recommended that Congress change the pending federal reductions in states’ Medicaid Disproportionate Share Hospital allotments. Current law calls for a $4 billion reduction for federal fiscal year 2020, which begins Oct. 1, 2019, and $8 billion annually in fiscal years 2021 through 2025. MACPAC favors a gentler phase-in ― starting with a $2 billion reduction in FY 2020 ― with budget neutrality maintained by extending the reductions to FYs 2026 through 2029.

MACPAC also made two other Medicaid DSH recommendations to Congress. First, DSH allotment reductions should occur first in states with unspent allotments, which would eliminate potential rather than actual payments. Second, the Medicaid DSH allotment methodology should reflect each state’s number of low-income, nonelderly residents. A final recommendation called for better tracking by the Centers for Medicare & Medicaid Services of supplemental payments to hospitals.

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White House Roundtable Addresses Transparency, Coverage And Surprise Billing

Staff Contact: Daniel Landon

President Trump and several federal cabinet members participated in a White House Roundtable on Fair and Honest Pricing in Health Care. A transcript of their remarks captures thoughts and intentions regarding health care policy. For example, after demanding a hospital’s price quote for his own medical treatment and comparing it with a website on his cell phone, Secretary of Health and Human Services Alex Azar said, “Armed with that information, I took the plastic wristband off and walked out of the facility and didn’t get the test done.” The president and his cabinet members emphasized the importance of price transparency, association health plans and eliminating “surprise billing” by out-of-network providers.

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Did You Miss An Issue Of MHA Today?

January 21, 2019
Sen. Blunt Introduces Legislation To Fund Health Programs
HIDI HealthStats – Predicting Opioid Risk in Hospital Patients
CMS Announces IQR Education Session

January 22, 2019
MHA Releases Analysis Of The Medicare VBP Program And Quality Trends Reports
TJC Announces eCQM Expert To Expert Webinar

January 23, 2019
MHA Advocates On Poison Control Funding
Senate Appropriations Committee Studies Parson’s Budget Proposal
Legislative Committee Discusses TCD Funding
MHD To Delay Outpatient Hospital Pharmacy Reimbursement Cuts
AHA Offers Webinar On Violence Intervention
U.S. Senator Roy Blunt Visits Northwest Medical Center
Cox Barton County Hospital Names New President

January 24, 2019
U.S. Senators Question Organ Transplant Policy
MLN Connects Provider eNews Available
Missouri Department Of Insurance Receives Benefit Enrollment Center Grant
CMS Selects Random Sample For IQR Program Validation
SSM Health Saint Louis University Hospital Names Interim President

Consider This ...

Americans should keep their intake of added sugars to less than 10 percent of their total daily calories as part of a healthy diet. In 2005–2010, the average percentage of total daily calories from added sugars was 13 percent for both men and women aged 20 and older.

Source: Centers for Disease Control and Prevention