As a new decade begins, healthcare executives will continue to grapple with challenges of the past as well as new issues that emerge. We asked healthcare leaders to cite their top challenges, as well as coping strategies. It was no surprise, particularly with 2020 being a presidential election year, that dealing with an ever-changing landscape of government regulations topped the list. Here’s a closer look at what they said.
Challenge 1: Complying with new government requirements and mandates
Efforts to repeal the Affordable Care Act seem unlikely in the near term. “Nonetheless, healthcare executives always need to proactively stay on top of regulatory developments so they can position their organizations for the opportunities and challenges that may emerge as a result of changes,” says Kim Bell, senior vice president of health services, NFP, an insurance broker and consulting firm in Austin, Texas.
New mandates, both at the state and federal level, add a layer of complexity to running a business. Healthcare remains one of the most highly regulated industries, since approximately half of all of the industry’s spending comes from government sources (e.g., Medicare, Medicaid, Veterans Affairs, and government employee benefits), says Ashraf Shehata, MBA, MHA, national sector leader for healthcare and life sciences, KPMG LLP, an audit, tax, and advisory firm. “They update their rules with great regularity, so it’s important for healthcare organizations to stay current with the latest regulatory developments,” he says.
In particular, CMS’ push toward price transparency has resulted in many questions from payers and providers. “In 2020, we will see the price transparency mandate continue to play out and likely encounter more uncertainties,” says Tara Bradley, chief operating officer, Vitalware, a mid-cycle revenue software as a service solutions provider, in Yakima, Washington. “Specifically, hospitals have been tasked with the complicated duty of posting their chargemasters online. This process is not only difficult, but the information presented in a chargemaster is confusing and does little to further transparency or education.”
In addition, HHS recently released proposed changes to the antikickback statute and Stark Law. “Although we don’t know which portions of the proposed changes will be implemented in final rule-making, there will be changes that will more than likely come in 2020,” says Kelli Carpenter Fleming, Esq., a partner in the healthcare group at Burr & Forman LLP, a law firm located in Birmingham, Alabama.
Dealing with this challenge
Regarding the Stark Law changes, healthcare providers should review the proposed changes and start thinking about what relationships, if any, will be impacted by them. “Getting up to speed on the changes and ensuring that existing relationships are compliant should be a priority in 2020,” Fleming says.
Bradley’s advice for dealing with the uncertainty of CMS’ mandates is to always stay one step ahead. “Instead of waiting for CMS directives, hospitals should feel empowered to initiate processes and programs to educate patients and make pricing less complicated,” Bradley says. “Hospitals will need to improve their ability to understand their own pricing data, how they can operationalize that insight, and then continuously measure the effects of their actions and adjust accordingly.”
The push for pricing transparency will require hospitals to review pricing quarterly or even monthly. Hospitals can also hire billing specialists, who can better handle the influx of customer questions related to pricing and serve as middlemen between the hospital and insurance company to help patients better understand their out-of-pocket costs, Bradley says.
To comply with government regulations in general, a well-resourced, internal audit function can address many issues. “If an organization is well funded and has the resources to investigate and address potential risks, it can protect relationships with stakeholders, including patients, regulators, and contractual counterparties,” Shehata says.
Challenge 2: Shifting to value-based payment models
The shift from fee-for-service reimbursement to value-based payment models will continue in 2020, including the trend for healthcare providers and third-party vendors operating in the healthcare space to assume some of the financial risk along with the health insurer. “While these relationships are appealing, there is the risk that they will be unprofitable if not structured properly,” says Layna Cook Rush, JD, shareholder, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, a law firm with offices in the Southeastern United States and Washington, D.C.
Along these lines, Matt Gagalis, head of payer market development, CarePort Health, a care coordination software company, says that as value-based care continues to take hold and the number of stakeholders responsible for improving patient outcomes increases, the fragmentation within the healthcare industry has become increasingly apparent. There will be a critical need for alignment and coordination across the continuum.