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Key CMS Shifts, Site Neutrality Momentum, and ACA Subsidy Uncertainty with Laura Dyrda
00:11:38
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- [00:00]
A
This is Scott Becker with the Becker Healthcare Podcast. Thrilled today to be joined by extraordinary leader Laura Deirda. Laura talks to us regularly about the key stories she's watching in health care and the key trend she's watching. Laura, let me tee it up and turn it to you. What are some of the key stories that you're watching currently?
- [00:19]
B
Thank you so much, Scott. I really appreciate it and it's always a pleasure to be here. Now, a few things that we're watching come from cms, which released its outpatient department ambulatory surgery center policy, including a three year phase out of the inpatient only list and a substantial expansion of the ASC covered procedures list. Beginning next year, 285 procedures, many of them being musculoskeletal, will shift off the inpatient only list while 547 codes will be then added to the ASC list with Medicare retaining the ability to pay for procedures in the hospital outpatient department on a selective basis when clinically appropriate. This has been just such an interesting shift. I know during the first Trump administration we had seen some of this shift of procedures off of the inpatient only list of potential phase out. And then the patent administration brought it back. And so now it's just interesting to see again this new Trump administration focusing in on that inpatient only list and working really closely to move those procedures off and phase out the list. That doesn't mean those procedures will be paid in the ASC setting until they're added to the ASC cover procedures list. But it's something that hospitals and systems as well as surgery centers have been thinking about and preparing for. So it'll be interesting to see how more and more of these affects the field going forward. I know some health systems had really read the tea leaves and have already started making moves. So more cases are in the outpatient setting and in ASCs. Some have partnered with physicians on ASCs. And then other health systems like Ascension are making big, big moves in the ASC space. Ascension acquired Amsearch earlier this year, which is an ASC operator with more than 250 facilities in 34 states focused on GI ophthalmology and orthopedics. So the acquisition about, you know, those 250 centers to Ascension's existing 58 ASCs. And Ascension's president Eduardo Conrado said that he sees continued growth in the ASC market in the future. So that's been really interesting. And alongside of that change, CMS also, you know, advanced some of its site neutral payments, moving to aligned REIMBURSEMENT for certain outpatient services delivered in the hospital outpatient departments and off campus facilities to prevent higher co pays based solely on the site of care. And Chris Clomp, who's the CMS deputy administrator and director for the center for Medicare, said the rule aims specifically to prevent services from unnecessarily being performed in the hospitals when they can be safely performed in less invasive settings. So again, it's just been interesting to see all of these different changes. I know CMS overall aims to really have savings projects, about $11 billion in savings over the next decade by moving more procedures into the ASC setting. So it'll be interesting to see how that plays out and how it impacts hospitals and health systems overall and how.
- [03:18]
A
What's the feedback from health systems? Are they concerned about more cases moving out of health systems in higher paying settings? Does this have an impact on their budgets and their revenues?
- [03:29]
B
The short answer is yes, there is a lot of concern and it will have an impact on hospital revenues and budgets. We have heard a diverse array of responses when asked this question over the last several months from the proposed rule to now. And basically what we're hearing from, especially CEOs and CFOs in other health systems is that they were hoping it wouldn't come to this, but they have been preparing in thinking through budget scenarios and what they'll have to do as more procedures, beginning with Medicare procedures, are directed to the ASC and then potentially commercial payers as well. I think, you know, with lower reimbursements coming from these procedures in the ASC setting, I think hospitals and systems are taking an approach where they can, you know, reshuffle things. I think the talk track that we've heard from many of these leaders is that it's the right thing to do for patient care. And so they want to make sure that they are treating patients in the, you know, right setting for them to get the best quality of care. But in the interim, they're going to need to double down on, you know, figuring out how they can leverage technology, what new revenue streams are going to make sense for their organizations. And you know, I think there is some anxiety out there for how, you know, this financially could impact organizations, whether they're going to need to change it and refine some of their strategy around, you know, what, how they think about real estate and bricks and mortars and what's in the hospital, what's at home, what's at the surgery center and what they can actually support in the future. But I think it all dovetails into a broader discussion on what will healthcare look like in the future? How do you get health care and how do you redesign systems that are more efficient and effective than they ever have been in the past?
- [05:14]
A
Thank you. And then, Laura, that's really helpful and actually really interesting what's happening. I mean, it's amazing that Ascension got so far ahead of this. And we'll see if that gamble works, their acquisition of amsurg. Take us through. Are there any other stories that you're watching closely?
- [05:29]
B
Currently?
- [05:30]
A
That's a big story. Obviously the hospital outpatient rate goes up a few percent, 2.6%. But also all this movement potentially to surgery centers and in movement to outpatient departments and payment being less. And how close does this start to move us towards what's always been talked about as site neutrality? Where does that fit into this?
- [05:54]
B
Yeah, it does move much closer to site neutrality than we have been in the past. It's definitely a hot topic of conversation amongst hospital executives, but also among surgery center executives. You know, the ASC industry has seen their lower prices as a strategic advantage in some ways in bringing cases in. And so without that, they don't see their own cases as increasing up to what the hospital have been receiving, but instead the hospital is moving down to what ASC reimbursement has been receiving. So I think there's a lot of preparation for that potential eventuality. But when you think about site neutrality, there is a strong argument to be made and especially amongst lawmakers who are looking to try to find ways that they can make health care more affordable when they're thinking about taking just really figure out where they can cut some costs. It does seem to make a lot of sense in that argument for lawmakers who are serious about it. So it seems like it takes us closer to that space. I think both hospital and surgery center leaders are trying to figure out then where they will fit and how healthcare ecosystem is going to change because of of that and what it means for them overall. Neither side of care wants to see margins go down so much that it becomes untenable for them to provide care in the outpatient setting. We've seen that a little bit. For some ASC procedures, the reimbursement got so low that those actually went back to the hospitals. So it's just such an interesting and fascinating thing to think about and look at. And I think there is likely seems like going to be additional conversations and movement in that direction. And so I know both hospital lobbies as well as surgery centers are trying to make sure they have a seat at the table to talk about what that looks like. So, you know, care can be provided in the best space possible and continue to be accessible for Americans across the board.
- [08:01]
A
Thank you, Laura. Just one more question. Any other stories that are top of mind currently that you're watching right now?
- [08:09]
B
Absolutely. So I think the other really big story that is coming up across the board for hospital health system leaders is also looking at on Capitol Hill and what's going to happen with some of these ACA subsidies. I think there's been a lot of twists and turns over the last six to 12 months on what's going to happen for the ACA subsidies when they run out at the end of this year. And the most recent being President Donald Trump delayed his expected rollout of a president proposed proposal to extend enhanced ACA subsidies, which were originally announced on November 24, according to reports from Politico CNN. The proposal, which is known as the Health Care Price Cuts act, would extend some of these subsidies for two years while adding new eligibility limits, including an income cap of around 700% of the federal poverty level and minimum premium requirements for payments for all enrollees. And then the plan also would include a health savings account feature, allowing individuals to switch to lower premium market plans to redirect those savings into tax advantaged accounts and funded with subsidy dollars. In addition, the administration is expected to ask Congress to fund the cost sharing reductions which help lower some of those deductibles and co pays for marketplace enrollees which are currently there but set to expire on December 31st. And so the president delayed his expected rollout of that. But at the same time, you know, it's a shift of the administration's evolving stance on those ACA subsidies. Previously, President Trump had proposed eliminating some of the insurer payments entirely and giving those dollars directly to individuals to purchase coverage, which was an idea floated shortly after the government shutdown ended. And those subsidy fundings were really a central point of contention there. In this interim, Congress is also considering its own path with the Senate advancing a spending package that could enable a December vote on extending those subsidies. And the enhanced subsidies, which expand the eligibility above 400% of federal poverty level and capped premiums at 8.5% of income have really fueled ACA enrollment growth from about 11.54 million in 2020 to 24.3 million people in 2025. And polling shows that more than 75% of adults support keeping those tax credits. So it's definitely popular to figure out how we can find a way that more people can have those subsidies and stay on those ACA plans.
- [10:47]
A
Thank you. And that is fascinating because on the Republican side, particularly the mid to right Republican side, there is strong dislike for the aca and I think someone viewed it as a real win to stop some of the ACA subsidies that were intended to ultimately expire anyways. In any event, fasting politics here because as President Trump tries to meet in the middle on the ACA subsidies, he's getting a lot of whiplash from his own party and is fascinating to watch the entire thing. Laura, again, thank you for joining us today on the Beckers Healthcare podcast. I always learn something. I am so thankful for your effort and everything you do. Thank you very much for joining us.
- [11:27]
B
Absolutely. Thank you, Scott. I really appreciate all you bring to the field in these conversations. It's always such a pleasure for me as well. And thank you for everything.