The recent 2024 ImagineSoftware Client Conference warmly welcomed Patrick Velliky, Vice President of Government Affairs with Envision Healthcare, to deliver
Political Landscape and Its Impact on Healthcare
Mr. Velliky began with a thorough analysis of the 2024 political environment and its potential ramifications for the healthcare industry. He emphasized that in presidential elections, the overall popular vote often matters less than the outcomes in key swing states. He identified Arizona, Pennsylvania, Georgia, Michigan, and Wisconsin as pivotal states that will likely decide the next president. In 2020, President Biden won these states, but Velliky pointed out that some of these victories were by very narrow margins.
- Georgia: Georgia, for instance, was won by Biden with a margin of just 12,000 votes. Velliky expressed skepticism about Biden's ability to retain Georgia, predicting that former President Trump might reclaim it due to the unique local circumstances and the narrow victory margin in the previous election.
- Pennsylvania: Turning to the state Velliky hails from, Pennsylvania, he noted a historical dislike for Hillary Clinton, which played a significant role in Trump’s 2016 victory there. Despite Biden’s roots in Scranton, Pennsylvania, Velliky suggested that while Biden might secure Pennsylvania again, the overall path to 270 electoral votes appears more challenging for Biden compared to Trump.
- Other Key States: Velliky also discussed Arizona, where Trump was polling ahead due to border issues and other local factors. He proposed that Trump’s path to victory might involve reclaiming Arizona and Georgia, and then winning either Wisconsin or Michigan. In contrast, Biden’s route to the necessary 270 electoral votes seems more complex, requiring victories in multiple battleground states.
Key Healthcare Issues
Velliky next shifted focus to critical issues facing the healthcare industry, particularly those that will impact healthcare providers both for the remainder of the current year and the next administration.
1. No Surprises Act (NSA): The No Surprises Act was a major focus of Velliky's presentation. He explained that the Act was designed to protect patients from unexpected out-of-network bills, ensure fair reimbursement for out-of-network services, and incentivize the establishment of in-network agreements. However, while the Act has succeeded in reducing balance bills for patients, emerging issues with payer non-compliance have introduced new challenges.
- Patient Protection: Velliky noted that the NSA has generally succeeded in protecting patients from balance billing. Patients are no longer caught in the middle of negotiations between providers and payers, which was one of the primary goals of the Act.
- Payer Non-Compliance: However, he highlighted that many problems have shifted to the payer side. Velliky provided examples where payers denied coverage for services clearly covered by the NSA or altered patient responsibility after Independent Dispute Resolution (IDR) awards. He shared a case involving a neonatal claim that was wrongfully denied, emphasizing that such payer behavior directly violates the NSA.
- IDR Process: The Independent Dispute Resolution (IDR) process, intended to settle disputes between providers and payers, has seen a high provider win rate. Despite this, payers have found ways to blunt its impact, delaying payments and diminishing the process’s intended incentives. Velliky stressed the need for more stringent regulations to ensure proper usage of Remark Codes and enforce compliance.
2. Dispute Resolution Process: Velliky delved deeper into the IDR process, revealing that while providers often win disputes, payers have strategies to mitigate these losses. He explained that payers sometimes delay payments, undermining the motivation to establish fair, sustainable rates. To address this, Velliky voiced his advocacy for regulations requiring proper usage of Remark Codes and stricter enforcement to hold payers accountable.
3. Medicare Fee Schedule and MIPS: The state of the Medicare fee schedule was another significant topic. Velliky discussed how reimbursement rates have been significantly cut in real terms over the past two decades, making it increasingly difficult for providers to operate. He explained the historical context of the Sustainable Growth Rate (SGR) and how its replacement, the Medicare Access and CHIP Reauthorization Act (MACRA), along with the Merit-based Incentive Payment System (MIPS), have so far failed to effectively incentivize quality.
- Historical Context: Velliky recounted how the SGR mechanism led to annual threats of drastic cuts to reimbursement rates, which Congress repeatedly averted. When MACRA replaced SGR in 2015, it aimed to transition towards quality-based payment, but numerous factors, including the COVID-19 pandemic, have hindered its effectiveness.
- Current Challenges: MIPS has been criticized for not incentivizing genuine improvements in quality. Measures reported under MIPS are often topped out, meaning providers are competing for marginal gains that don’t reflect significant improvements. Velliky urged for reforms that introduce inflation adjustments and sustainable payment models while acknowledging the political and financial hurdles involved.
4. Vertical Integration and Market Consolidation: Velliky highlighted the increasing consolidation within the insurance market, noting that the top ten insurers now hold nearly 70% of the market share in commercial markets and 90% in Medicare Advantage. He warned of the potential negative impacts of this consolidation, including higher costs for patients and reduced provider reimbursements. Velliky cited recent investigative reports and studies underscoring these concerns, emphasizing the need for regulatory oversight to ensure fair practices and data security.
Future Outlook Despite the challenges, Velliky expressed optimism about the potential for improvements in the IDR process and the broader regulatory environment. He called for greater involvement from providers in regulatory bodies to drive standardization and accountability. He also stressed the importance of continued advocacy and collaboration to address these complex issues and achieve sustainable solutions for the industry.
- Regulatory Reforms: Velliky mentioned that upcoming regulations could streamline the IDR process and enforce proper usage of remark codes, which would help address many of the current issues. He encouraged providers to be proactive in engaging with these regulatory processes to ensure their interests are represented.
- Provider Involvement: He highlighted the importance of providers participating in organizations like X12, a non-profit, ANSI-accredited, cross-industry development organization standardizing US electronic transactions, including in healthcare. Greater provider involvement as members can help ensure that standards are developed in a way that addresses provider needs and challenges, promoting a fairer and more efficient healthcare system.
Audience Q&A
The session concluded with a Q&A segment, where Velliky addressed various concerns from conference attendees. Key topics included strategies for dealing with payer non-compliance, the evolving landscape of healthcare regulations, and specific issues related to the No Surprises Act and the IDR process.
- Addressing Non-Compliance: Velliky advised attendees on how to identify and address instances of payer non-compliance with the No Surprises Act. He shared strategies for using SQL queries to track and flag improper denials and emphasized the importance of documenting and reporting these issues to regulatory bodies.
- Evolving Regulations: Attendees raised questions about upcoming regulatory changes and their potential impact. Velliky explained that while the exact timing of new regulations is uncertain, they are expected to bring improvements in the enforcement of payer compliance and standardization of transaction codes.
- Industry Collaboration: Several questions focused on the need for industry collaboration to tackle systemic issues. Velliky stressed the importance of continued advocacy, participation in regulatory processes, and sharing best practices among providers to drive meaningful change.
Wrap-up & Reflection
Patrick Velliky’s presentation at the ImagineSoftware Client Conference provided a thorough analysis of the current industry challenges and potential pathways forward. His insights into the political landscape, healthcare legislation, and market dynamics offered valuable perspectives for attendees, underscoring the need for ongoing vigilance, advocacy, and innovation in the healthcare sector.
By addressing key issues like the No Surprises Act, the IDR process, the Medicare fee schedule, and market consolidation, Velliky highlighted both the challenges and opportunities facing healthcare providers. His emphasis on regulatory reforms, provider involvement, and industry collaboration offers a roadmap for navigating these complexities and striving for a more sustainable and equitable healthcare system.
All information contained herein is intended as general introductory information, is provided for informational purposes only, and is not legal advice. It should not be construed as legal advice and should not be relied upon as such, nor does it necessarily reflect the ideas or opinions of ImagineSoftware, Technology Partners, LLC or any of its affiliates or subsidiaries.