Farzad Mostashari Profile picture
Jul 26, 2018 13 tweets 5 min read Twitter logo Read on Twitter
It's strange that everyone on health policy twitter is not going apes over the Hospital Outpatient Prospective Payment System (#OPPS) rule released today

It contains one hugely significant proposal that hospitals will fight bitterly...but could actually help them in the long run
Background- there are two different CMS payment systems for historic/operational reasons, one for professional services, and the other for hospital outpatient depts.

Up until now, there had never been an effort to make sure that equivalent services would have same payment rate.
In fact, the same procedure paid for in hospital OPD setting ended up being reimbursed at a much higher rate than the exact same procedure at a doctor’s office.

Here’s how @MartinSGaynor and Paul Ginsburg and I described it in our “Making Markets Work” White Paper
It was natural that, responding to these incentives, hospitals began buying up physician practices and rebadging them as “hospital outpatient departments”

Private cardiologists could not compete with this arbitraged employment arrangement, and Medicare’s payments skyrocketed
what’s worse is that Medicare beneficiaries began to get surprise bills for separate hospital fees when they thought had already paid their copay for their doctor’s visit.

there are 100’s of local news stories about this like this one


Policy experts including the @medicarepayment advised government to eliminate these facility fees and enact “site-neutral payments” saving hundreds of millions of dollars, and slowing down hospital consolidation.


Congress in 2015 as part of the Bipartisan Budget Act stopped any *new* sites from being converted from private practices to “hospital outpatient departments", but grandfathered the old ones, and left open the door to lots of games.

@rshawnm @aafpprez
I have to give credit to the current Administration for taking seriously the growing threat to markets of hospital consolidation.

The 2018 president’s budget proposed eliminating grandfathered, “mid-build", emergency departments & cancer hospital exceptions to site-neutral pay
…which brings us to today.

The annual hospital OPPS payment rule proposes to cap the OPPS payment at the Physician Fee Schedule (PFS)-equivalent rate for the office visit (G0463) and seeks to expand to additional items and services and freezes services in grandfathered sites
They will be sued

The legal argument:
Section 4523 of the BBA of 1997 (established OPPS) Included specific authority under section 1833(t)(2)(F) of the Act that requires the Secretary to develop a method for controlling unnecessary increases in the volume of covered OPD services
This will be a hit of about $900M (1.2%) to the approximately $75B that hospitals receive under the OPPS (they get a lot more for inpatient care, but OPPS has been fast growing), but most hospitals will make about the same as last year because of the market basket update
Conventional wisdom is that hospitals are too powerful and the administration will back off under pressure (expect wall to wall ads in DCA)

But I think this depends on
a) Will there be other groups (esp independent practices) supporting this change?
b) Does @SeemaCMS give a fig?
@SeemaCMS The truth is that this proposal could help hospitals be more competitive in value-based contracts/ alternative payment models, and they should embrace the changes.

If rural hospitals or AMCs need subsidies, then we should do it directly, not through distorting payment policies

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More from @Farzad_MD

Aug 30, 2018
1/ 2017 #MSSP #ACO Results!
ACOs have scaled rapidly across the country!

In aggregate, the 472 ACOs were accountable for nearly 9 million Medicare beneficiaries and $95 Billion- that's a quarter of all fee for service, and almost half of the entire Medicare Advantage market.
2/ If you add up all the actual costs versus benchmarks, these 472 ACOs were collectively $1.1B under their benchmarks (more on whether that's the right counterfactual later).

Medicare shared $780 million in payments with the ACOs, netting the taxpayer $313M
But wait!

There's lots of evidence that the benchmark under-estimates the savings produced. @JMichaelMcW et al have shown convincingly that a true "difference in difference" approach would show substantially higher net impact.

The green eyeshades folks at CMS OACT said add 60%
Read 26 tweets
Apr 25, 2018
1/ A little bit of history here…

When I was national coordinator for health IT, we did an RFI with CMS for “Advancing Interoperability and Health Information Exchange"

2/ If you’re a student of this stuff, it’s pretty topical- including a section on patient-centered information exchange on promoting #BlueButton - including through Medicare Advantage, … which is now on the verge of becoming a reality
3/ Another idea I was pretty excited about was using inpatient/post-acute Conditions of Participation as a vehicle for getting information sharing - on the argument that it really is a basic health and safety requirement
Read 11 tweets
Mar 6, 2018
1/ There was a very important speech today by @SecAzar today at the @FedAmerHospital that I'm going to annotate for you.

Anyone who’s been waiting for a clear declaration of this Administrations beliefs and intentions re #ValueBasedCare - here it is

2/ @SGottliebFDA is killing it at @US_FDA
and everyone loves @NIHDirector precision medicine stuff
who's to say @SeemaCMS can't make delivery reform happen faster?

---->"This is no time to be timid"
(translation, some people aren't going to like this, and we don't really care)
3/ Our spending on Medicare and Medicaid has tripled since I was last at the Humphreys Building, and while I understand that sounds fantastic to all you hospital folks, I assure you, we're not happy about it.
Read 20 tweets
Oct 19, 2017
Here are the 2016 #MSSP #ACO results you’ve been waiting for. Results are very different for physician-only

Sometimes the rainbows and unicorns are right in front of you
@amitabhchandra2 @Michael_Chernew @C_Garthwaite @JMichaelMcW
…And these #ACO savings are in the context of super-low per capita Medicare national inflation of about 1% per year @porszag
Read 5 tweets

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