Replacing the individual mandate with tighter limits on open enrollment may prove more effective, said one ACA marketplace leader.

Nov. 17–Physician payment reform could become the leading driver towards value-based health care in the incoming Trump administration, various healthcare executives said this week.

Amid profound changes expected for the Affordable Care Act (ACA), Medicaid, and Medicare under the new administration and a Republican-led Congress, physician payment reform could emerge as the primary way to move away from fee for service, officials from various organizations said at the American Medical Group Association's Institute for Quality Leadership, held in San Francisco this week.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) “had bipartisan support and I think that will become a main driver” for payment reform, said Lance Lang, MD, chief medical officer of Covered California, the state’s ACA insurance marketplace. “I don't think there is any doubt about it.”

Set to go into effect in 2017, MACRA requires eligible physicians to choose one of two tracks that put them on the path towards a pay-for-value system and includes quality and health information technology requirements.

Dr. Robert Pearl, CEO of the Permanente Medical Group, the physician arm of Kaiser Permanente, said in a keynote address that MACRA “is the solution today. It's the solution to the last bastion of fee-for-service.”

ACA Repeal Bills

AMGA will be lobbying the new administration to make some changes to the MACRA rules, said Chet Speed, vice president of public policy for the association. The final MACRA rule was released Oct. 14.

“The financial thresholds of the advanced alternate payment models (APMs) we find unworkable,” Speed said.

APMs are one of two tracks physicians can pursue under MACRA. The other is the Merit-Based Incentive System (MIPS).

Congress likely will pursue a two-bill strategy to repeal the ACA, Speed said. The first bill could consist of a partial repeal and be released in late January or early February. This piece may come in the form of a reconciliation bill, which requires a simple Senate majority to pass, and would end the insurance marketplace subsidies and the individual and employer mandates, Speed said.

The second bill would come in the fall of 2017 and would further repeal aspects of the ACA and could include changes to entitlement programs, such as Medicaid and Medicare, Speed said.

Transforming Medicaid into a block-grant program and moving Medicare toward a “premium support” model are priorities for Speaker of the House Paul Ryan (R-Wisc.).

“Basically, they would say to the states, do what is best to meet the needs of your patients,” Speed said of a possible Medicaid block grant program. He said such a program could include a per-capita cap.

However, Donald Fisher, president and CEO of AMGA, noted that Vice President-elect Mike Pence accepted Medicaid expansion under the ACA as governor of Indiana. The program, called Healthy Indiana Plan 2.0, requires beneficiaries to pay premiums and provides them with health savings accounts. Beneficiaries who don't pay premiums can be locked out of the program for six months.  

“You might see his (Pence's) influence there,” Fisher said about an ACA replacement plan.

Marketplaces as Quality Lever

Lang of Covered California implied that the marketplaces could provide a cost- and quality-control lever if they are allowed to continue by the new administration. Starting in 2019, the California marketplace will require plans to exclude low-performing hospitals from their provider networks, or they must provide a justification to be included, Lang said. Measures examined could include the C-section rate for low-risk deliveries, which can vary from 12 percent and 70 percent of births at hospitals in California, he said.

“We're saying ‘It's time to get with it, guys,’” Lang said. “The variation is intolerable."

The marketplace also plans to put pressure on the 100 or so hospitals not in the Partnership for Patients to join the national quality improvement campaign.

California's ACA marketplace, which has been one of the largest and most successful in the country, includes about 1.4 million enrollees and has served a total of 2.5 million enrollees since 2014. The marketplace offers up to seven plan choices to consumers and has had 7 percent average annual premium increases over the past three years. Average premiums for 2017 will increase by 13 percent. All participating health plans are profitable, Lang said.

According to Lang, the greater success of California's marketplace compared to those in other states has stemmed from three factors: California's Medicaid expansion (one–in-three Californians are covered by Medicaid); its approach as an active purchaser of health plans, which rejects “weaker” competitors; and California’s ban on grandfathered health insurance plans. Those decisions brought healthier people into the marketplace and improved competition among plans.

Covered California plans have not changed any of their business operations, for now, Lang said.

“We're still here. We are not doing strategy sessions; we are enrolling people,” Lang told the audience. “We are good for this year (2017). We are planning for 2018 as well."

Limited Enrollment Period?

Early signals that President-elect Donald Trump would like to keep the more popular ACA components, like the ban on excluding people from coverage based on pre-existing conditions, appeared to give some hope that the individual market could endure.

Further limiting the open enrollment period could be one of the ways to keep the marketplaces running, Lang said. 

“One change proposed is to limit open enrollment,” Lang said. "That might be more powerful than the individual mandate, in terms of getting people to sign up."

But the consumer premium subsidies are critical, he said.

“We are talking about a group of folks just above the poverty level and cannot afford insurance otherwise,” he said. “There is no way we will be able to meet that population without that subsidy.”


Rebecca Vesely is a freelance writer based in San Francisco. You can follow her on Twitter at @rebvesely.

Publication Date: Thursday, November 17, 2016