Trump administration targets consolidation, cost disparity across sites — 5 takeaways


CMS Administrator Seema Verma said the Trump administration is doubling down on site-neutral payments and reversing previous administrations' policies, claiming they accelerated healthcare consolidation, which in turn stifled competition, hurt independent providers, and hiked up costs.

Five takeaways from the June 6 notice:

1. The high costs of compliance with certain policies — including EHR requirements and MACRA regulations — drove independent physicians to become hospital employees, Ms. Verma said. She cited an AMA survey that found 47 percent of clinicians had ownership in their practice in 2016, down from 53 percent in 2012.

"Independent physicians are increasingly selling their practices to hospital systems, and new physicians often start their careers as employees of larger systems," Ms. Verma wrote.

2. CMS has pushed for price transparency by requiring hospitals to publish a list of their standard charges online, and by making more surgical procedures eligible for Medicare reimbursement in ASCs, Ms. Verma said.

3. CMS adopted a site-neutral payment policy for clinic visits, aiming to eliminate the cost differential between hospital-owned offices and independent ones. Ms. Verma estimated that the policy would reduce beneficiary copayments by $380 million.

4. Ms. Verma explained changes to CMS' payment policies for 340B prescription drugs. The agency adjusted payments for 340B drugs to more closely match the actual price of the drug, and lowered payments for those administered in hospital outpatient departments to de-incentivize consolidation.

5. CMS made changes to Medicare's main program for ACOs to encourage participation by physician practice-led ACOs, Ms. Verma said. Previously, providers could form ACOs and access waivers even if they failed to lower costs. Now, ACOs assume greater financial risk.

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