Analysis: Initial thoughts on the President’s recent Medicare executive order

• The President released a new executive order Oct. 3 aimed at reforming/refining the Medicare program.
• Legislation is required to move the needle on most of what’s recommended in the executive order.
• Many of the actions in the executive order that would directly result in changes to the Medicare program appear to require legislative action.

The President released a new executive order Oct. 3 aimed at reforming/refining the Medicare program. Several key points from the executive order that caught my attention are:

1. Instructs that the Medicare program shall adopt and implement those market-based recommendations in the administration’s report on “Reforming America’s Healthcare System Through Choice and Competition.” (Note: Most of what’s recommended and would move the needle require changes in legislation.)
2. Reaffirms  the administration’s support for alternative payment models.
3. Improves access (in Medicare Advantage plans) through network adequacy by enhanced access to health outcomes made possible through telehealth services or other innovative technologies (among other things).
4. Encourages innovative Medicare Advantage benefit structures and plan designs through changes in regulations and guidance. The new rules and guidance would reduce barriers to obtaining Medicare Medical Savings Accounts (MSAs) and that promote innovations in supplemental benefits and telehealth services. (Note: Given that most Medicare beneficiaries have a supplemental plan, I’m struggling to see how Medicare MSAs will move the needle unless they can be used for non-covered services that have been demonstrated to reduce the total cost of care or help with cost sharing for pharmaceuticals.)
5. Includes a payment model that adjusts supplemental Medicare Advantage benefits to allow Medicare beneficiaries to share more directly in the savings from the program, including through cash or monetary rebates, thus creating more incentives to seek high-value care. (Note: This one does make a lot of sense to me, and it’s something that HFMA has asked Medicare to incorporate into the fee-for-service alternative payment models for years. Given the beneficiary is a key stakeholder, it’s hard to see bending the cost curve without their explicit engagement that results in different choices by the patient.)
6. Proposes to enable providers to spend more time with patients in several ways including reducing regulatory burden, supervision requirements and scope of practice limitations. The executive order also proposes regulation that would ensure appropriate reimbursement by Medicare for time spent with patients by both primary and specialist health providers practicing in all types of health professions. (Note: Given the meager updates to the Medicare fee schedule physician conversion factor, this has aligned nascent efforts on the Hill to increase physician payments. However, it’s unclear to me without legislation how they can accomplish this. At first blush, what this suggests is that the administration will either create new add-on codes (or increase payment for existing add-on codes) for incremental time related to care coordination and care management or take a harder look at mis-valued services and relocate payment from overvalued services to primary care services. Reallocating payment will be more challenging politically given that medical societies on the winning end will be supportive while those on the losing end will decry that reduced payment will result in reduced access.
7. Instructs the Secretary to further site neutral payment policies. (Note: Unless the administration prevails on an anticipated appeal of the Sept. 17 U.S. District Court for the District of Columbia ruling against CMS’s “site neutral” payment policy that was included in the CY19 Outpatient Prospective Payment System (OPPS) rule, it’s hard to see how the administration can do much here without Congress passing additional legislation.)

Takeaway

I’m skeptical that most of what’s in the executive order will get implemented. Much of it would require changes in legislation that I can’t see Congress undertaking in the current environment.

Although the administration may try, as they and other administrations have done when faced with Congressional inaction on their policy priorities, to creatively reinterpret existing statute, given the dollars at play, those changes will likely draw legal challenges.