The Centers for Medicare & Medicaid Services (CMS) released final changes to its Medicare Advantage and Part D Prescription Drug programs for 2016. Notable is a 1.25 percent revenue change, which CMS says does not account for an additional 2 percent expected increase in revenue from more coding activity.

According to CMS, from 2010 to 2015, each year has posted record enrollment, while premiums have fallen 6 percent over the same period. CMS noted in a separate public memorandum that while enrollment is growing and premiums are declining, the quality of care is improving. In 2015, 60 percent of Medicare Advantage members will be enrolled in a 4 or 5 star plan, compared to an estimated 17 percent back in 2009, CMS reported.

“The updated growth rates reflect the Office of the Actuaries’ best estimate of Medicare spending and are not the product of discretionary CMS policy,” CMS said. “The underlying per capita FFS costs continue to demonstrate a historically slow health care growth rate and that growth rate remains below the per capita gross domestic product growth rate. Initial information from Medicare actuaries suggests that contributing factors behind the change from the preliminary growth rate include higher than expected spending on inpatient hospitalizations and some intermediary services such as therapy, rural health clinics and federally qualified health centers.”  

Separately, on Friday the agency said it is seeking to give providers more flexibility to meet federal targets for the meaningful use of electronic health records, as reported by Modern Healthcare. Included among the changes is a proposal to standardize the 2015 reporting period for the EHR incentive program to 90 consecutive days of meeting the criteria for meaningful use, versus the 1-year period today. The agency also said it is working to reduce the burden and duplication of reporting requirements.

Meaningful use calls for providers to use certified EHRs in a way that can be measured, such as e-prescribing, the ability to exchange health information to improve the quality of care, and the use of EHRs to measure quality metrics. 

Our Take: Few analysts saw this increase. In its previous draft announcement Medicare said it expected to pay, on average, about 1 percent less in 2015.

But we aren’t surprised that CMS continues to walk back its EHR incentive program—with some (vocal) physicians in a panic about not having the required level of implementation in place on time. Reality is setting in on the agency and rather than have the program gutted by lawmakers it’s easing up on providers.

To put matters in perspective, after the second year of reporting, Pioneer ACOs—which include the most advanced of all health systems and physician groups—on average had 77 percent of physicians eligible for bonuses under the incentive program. That’s commendable. But MSSPs, which account for far more Medicare beneficiaries, average about 65 percent eligible for bonus, and that number only represents 221 of the 406 MSSPs. The bottom decile for MSSPs on this measure averages 22 percent. 

Technology integration is at the core of what makes an ACO or any integrated delivery system possible. Eventually they’ll get there, as will most of the rest of the providers. The goal of the incentive program was to kick-start the process of moving to electronic health records. And that goal has been achieved. 

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