What the Trump administration told finance leaders

Several high-level healthcare officials from the Trump administration, including the CMS administrator, addressed various components of health policy at the HFMA Annual Conference last week.

Their comments provided some insights on how the administration thinks about policy, industry trends and innovations.

‘Definitely not terminal’

Mehmet Oz, MD, administrator of CMS, said the “breakthrough ideas” of the Medicare trustees report looked at two drivers of the Medicare trust fund’s looming insolvency: decreasing fertility and poor productivity. For the second consecutive year, the report projects a 2033 depletion of Medicare funding in the Hospital Insurance (HI) Trust Fund.

“It’s not all rosy, but there are some opportunities,” Oz told attendees. “But as a clinician, I’ll tell you, if you have an opportunity to fix a problem, it gives you more hope than if you think the issue is terminal. We’re definitely not terminal.”

Initiatives Oz emphasized included:

• Pushing hospitals to share data with payers to fully digitize prior authorization
• Bringing providers and drugmakers together to address 340B issues
• Cutting costly federal healthcare regulations
• Fighting $100 billion in annual fraud across federal healthcare programs
• Merging the potential of AI with that of value-based payment in initiatives such as the ACCESS [Advancing Chronic Care with Effective, Scalable Solutions] Model
• Pushing medical schools to provide nutrition training to student physicians
• Using AI to dig into HHS data; modernizing CMS data with a cloud-based system
• Trying to improve the population’s health to increase overall productivity

“Providers don’t trust the insurance companies,” Oz said. “They don’t give them data on purpose, because they think it’s going to be used against them. We’re working aggressively with the hospital associations, other provider groups — many of you in this room can be helpful. If we can protect providers, and the data flow rapidly to the insurance company so no one has to talk, the payments can become instantaneous.”

‘Affordability czar’

Casey Mulligan, chief economist and regulatory officer at HHS, who noted he has been deemed the “affordability czar,” said health policy needed to focus on supply-side economics. Instead of the policy focus of previous administrations on health insurance coverage, needed policy focus includes:

• Improving health while lowering costs
• Increasing patient choice, better transparency and better data
• Removing innovation barriers

HHS Secretary Robert F. Kennedy Jr., to whom Mulligan reports, emphasizes “that too much policy attention has gone to arguing about coverage cards, while addiction, obesity, mental illness and other chronic conditions have reached historic levels,” Mulligan said.

Mulligan also defended provisions of the One Big Beautiful Bill Act (OBBBA), which limited both Medicaid provider taxes and state-directed payments (SDPs).

OBBBA “put the brakes on that; it’s a big deal,” Mulligan said.

He said provider taxes “create a marginal cost” for all patients, which raise prices. And SDPs increasing Medicaid payments to average commercial rates, shifts providers toward Medicaid and away from commercial and Medicare patients. The OBBBA Medicaid provisions limiting those Medicaid financing tools will reduce pressure on provider prices and lower commercial and Medicare spending by “hundreds of billion of dollars.”

“Families and workers should not pay higher premiums because of fiscal games between the states and Washington,” Mulligan said.

Productivity improvement

Stephanie Carlton, deputy administrator of CMS, said the healthcare sector needs to improve productivity, which has lagged other sectors of the economy.

She noted that drags on productivity partly stem from the numerous federal regulations on the sector, which she said the administration aims to reduce. Oz noted an executive order to cut 10 regulations for every new one issued.

Carlton said the healthcare sector may have an opportunity to greatly improve productivity with the expanded use of AI.

She also noted that OBBBA was written to give providers lead time to adjust to its changes. Fitch Ratings has noted that 75% of OBBBA’s healthcare cuts go into effect in the last five years of the law’s 10-year phase-in.

One of the most effective ways to reduce healthcare costs, she said, are efforts to get healthcare price and quality data to patients’ “fingertips.” That echoed Oz’s comments on efforts to provide downloadable digital records to all Medicare patients that they could take with them to each provider.

Pay for outcomes

Jacob Shiff, chief AI and technology officer with Center for Medicare and Medicaid Innovation at CMS, touted the potential for groundbreaking the ACCESS Model, which launches in July, to target outcomes.

ACCESS is intended to expand the availability of technology-enabled care of chronic conditions and reimburses for clinical outcomes rather than specific activities or calculated savings.

“The dominant incentives in our healthcare environment are to maximize billable activity, volume and intensity,” Shiff said. “And that’s where we’re seeing most technology being deployed. It’s nowhere near fulfilling the potential of these technologies to show up for patients, to show up for taxpayers.”

Prospective participants showing strong interest thus far include digital health companies, virtual provider groups and some traditional providers, Shiff said.

If an organization bills an ACCESS code for a given beneficiary, that same organization is prohibited from billing any fee-for-service code for the beneficiary. ACCESS is meant to be “an alternative to, not an add-on [to], fee for service,” Shiff said.

For the time they spend keeping tabs on their patients, clinicians can bill Medicare via a co-management code for care coordination, without formally enrolling in ACCESS. While participating companies may collect small monthly copayments from beneficiaries, no cost sharing can be linked to the co-management payment.

(Editor’s note: Article includes reporting by HFMA Senior Editor Nick Hut.)