Change is Constant in Healthcare: Are You Ready to Make the Most of It in 2020?

Matthew Swendsen
Principal Solution Marketer, Oracle Financial Services

Autumn is traditionally one of the busiest times of year for payers as they’re in the midst of open enrollment. It’s also the time that we all naturally look to the year ahead—specifically to the regulatory requirements and changes likely to present new opportunities and challenges to payers in the year ahead.

We take a look at three key regulatory developments, their expected impact on health insurers, and strategies insurers can adopt to accelerate their readiness.

Value-based Payments Gain Momentum

The Centers for Medicare and Medicaid Services (CMS) continues to promote participation in value-based payment arrangements via alternative payment models (APM) with Medicare, Medicaid, and commercial payers, including Medicare Advantage organizations. And, momentum appears to be building. In late October, the Health Care Payment Learning and Action Network (LAN), a public-private partnership launched by the U.S. Department of Health and Human Services to drive alignment in payment approaches across the public and private sectors, announced new timeline goals for linking healthcare payments to the value of care provided rather than the amount of care provided. The new goals for adoption of shared accountability alternative payment models follow:

Source: https://hcp-lan.org/

LAN’s new goals come as the organization sees progress in shifting to value-based healthcare payments. In examining data from 62 health plans and seven states—representing 227 million Americans—LAN found that in 2018, 35.8% of U.S. healthcare payments were made through shared accountability alternative payments, up from 34% in 2017.

What does it mean for payers?

Payers should expect to see a continued focus on expanding value-based payments, and, in turn, should seek to expand their ability to offer and administer flexible provider payment options, such as bonuses for performance and outcomes. In addition, Medicare Advantage plans, in particular, are looking for greater flexibility to leverage full-risk or global risk models in which they pay provider groups a set amount for the plan population, transferring greater control over patient care and responsibility for outcomes to providers. Full-risk models shift risk and reduce administrative costs, benefits that can be passed along to members in the form of lower premiums. However, to create models that are fiscally viable and drive improved outcomes, plans require modern and flexible core systems, as well as deep insight into performance and claims—capabilities that continue to elude many payers today.

Health Insurance Portability and Accountability Act (HIPAA) Changes on the Horizon

In 2018, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) posted a record year in HIPAA enforcement activity, garnering $28.7 million and representing a 22% increase over its previous record year—2016. It also finalized the single largest individual HIPAA settlement in history—$16 million from a major health plan—reminding payers that the risks of non-compliance are great.

OCR made it clear that patient access to data is a growing focus when it announced that one of the main areas of HIPAA enforcement in 2019 would be HIPAA right of access failures, including untimely responses to access requests and overcharging for copies of medical records.

Industry observers believe that HIPAA may be in for a significant update in 2020. Earlier this year, HHS closed comments around proposed changes to data sharing and care coordination rules—both of which would directly impact payers. Changes would include rule revisions to help data flow through covered entities, when needed, to support value-based and coordinated care. The industry awaits word on the final changes.

What does it mean for payers?

Payers continue to face HIPAA compliance risk, especially as requirements around data sharing evolve and expand. The drive to give patients greater access to their data will challenge payers, along with providers, as they struggle with the burden of siloed legacy systems that cannot deliver the transparency and agility needed to meet changing mandates.

Interoperability Set to Make Strides

The Office of the National Coordinator of Health IT (ONC) continues its long quest for interoperability and expanding patient access to health information—a familiar theme in 2019 and for the year ahead.

The ONC released its proposed information blocking rule (PDF) in February, outling seven exceptions to the prohibition against information blocking and providing standardized criteria for application programming interface (API) development. It also issued a proposed interoperability rule that requires insurers participating in CMS-run programs to have in place by January 1, 2020, the capability to give 125 million patients electronic access to their personal health information at no cost to them. Organizations that do not comply with the new regulations—which apply to nearly every organization handling patient medical records—could face substantial penalties.

It appears that the payer community is largely not prepared for these changes. Accenture surveyed 76 CIOs, CTOs, and VPs of IT at U.S. healthcare providers and healthcare payers with more than $1 billion in annual revenue. Only 26% of healthcare payers said they are “very familiar” with the rules; and only 26% said they are “very prepared” for them.

What does it mean for payers?

Private payers will be required to adapt to the proposed changes in CMS-run programs. As such, they should also be spurred to carefully consider extending these interoperability standards more broadly across their commercial plans.

While the proposed rules establish some standards around the data elements that need to be exchanged, however, there isn’t a clear roadmap as to how payers must make APIs available. This can create challenges across the industry because, even though payers have the flexibility to set their own path, they still need to accept and consume this data from other payers and providers. With clear standards, this could prove very challenging.

Next Logical Steps

Payers can take action now to ensure that that they are best prepared to meet the challenges ahead and capitalize on opportunities on the horizon. One of the first steps should be to assess core capabilities and infrastructure for the ability to:

  1. Integrate seamlessly with third-party systems
  2. Quickly introduce new payment models and transformation while continuing to ensure compliance
  3. Quickly adapt business rules without software coding
  4. Ensure agility through an extensible data model and the ability to tailor standard processing logic
  5. Deliver insight into performance and claims to support value-based pricing initiatives

To learn more about how modern payers can prepare to capitalize on new opportunities in the year ahead, visit us at the links below.

For more information, please visit:
Oracle Healthcare Payer Solutions: oracle.com/health-insurance
Oracle Financial Services: oracle.com/financial-services

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Email: financialservices_ww@oracle.com     

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