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What We’re Watching: April 9, 2019


CMS has finalized the CY20 Medicare Advantage (MA) rules and released the final MA and Part D flexibility rule for PY2020. The most significant element is an expansion of telehealth benefits, allowing telehealth to be more broadly utilized. This will benefit MA by enabling insurers to establish a wider provider network, lower beneficiary costs and increase enrollment.

Other key implications include:

  • An average rate increase across plans of 2.53%, an increase over the proposed 1.59%
  • A 3-year phase-in of a new risk adjustment model, incorporating new conditions and allowing the total number of conditions used in the risk score to increase
  • An increase in the use of encounter data (from 25 – 50% of the calculation to determine payment rates)
  • Increasing benefit design flexibility by allowing plans to offer non-primarily health-related benefits, including additional supplemental benefits to chronically ill enrollees
  • Additional flexibility and recommendations to enable better management of people abusing opioids as well as drug utilization review controls
  • Select Star Ratings Measure removals due to low statistical reliability

What we’re saying: The rule continues the support of policies that benefit the growth of MA plans. The administration is determined to shift risk off public payers to private entities (e.g., providers or payers). MA plans continue to take market share from traditional Medicare fee-for-service, and with the aging baby-boomer population expanding Medicare, insurers are fighting to grow their MA plans. Listen to Premier's webinar reviewing the MA regulatory changes for 2020, including the MA & Part D final rate announcement, call letter and rule.


We are anticipating the release of the proposed Medicare inpatient rule soon, among other rules and announcements from CMS.

What we’re saying: A few things we’re expecting include a final rule requiring manufacturers to reveal drug list price in direct-to-consumer ads; a reasonable hospital inpatient rate update in the vicinity of MedPAC’s recommended ≈2% update; proposals on “surprise billing,” given CMS’s RFI on that subject in the FY19 inpatient proposed rule; further scaling back of quality measures; proposed payment regulations for ambulatory care facilities; and new CMMI advanced alternative payment models.


Last week Premier launched a campaign focused on improving maternal healthcare. The Bundle of JoyTMcampaign aims to ensure mothers and babies are always at the center of care and supported by the latest evidence, the best doctors and the most successful practices.

What we’re saying: The campaign launched on the wings of the Preventing Maternal Deaths Act, which requires hospitals to report maternal deaths to state agencies, starting in 2019. The focus on maternal health is an industry imperative, but it comes with challenges because of a lack of standardized care. Premier has detailed data on 1.2 million annual births to help providers analyze care delivery down to the physician and compare outcomes and practices with others. Marrying this information with Premier’s vast network of health systems, physicians and industry partners, as well as proven best practices, the campaign aims to develop, test and scale new standards in maternal care delivery.


What We’re Watching is a weekly blog focused on the current events Premier is following and their relevance to the work of Premier and its members.

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