Best Practices

Strategies for ACA's Subtle Fallout

By Bruce Maller

Several recent announcements got me thinking …

Earlier this year, United Healthcare announced plans to overhaul how it pays doctors and hospitals. United said it would “ramp up value-based contracts over the next several years so that 50%–70% of the carrier's commercial insured members could be affected by 2015, up from 1%-2% this year.”

This announcement takes on even greater significance given the fact that United insures more than 10% of the total US population. Other managed-care companies, such as WellPoint and Aetna, have announced similar plans. My take is that they are signaling providers to prepare for the phase-out of fee-for-service reimbursement.

A few months ago, WellPoint announced plans to buy Medicaid-focused Amerigroup Corp. The Wall Street Journal reported the rationale is Medicaid is seen as a growth area as more states turn to the private sector to manage health care for this expanding population. A key focus of WellPoint's acquisition are the “dual eligible” patients who qualify for both Medicaid and Medicare. In part, this transaction appears to be in reaction to the 2014 expansion of Medicaid under the Affordable Care Act (ACA).

These moves show a pattern worth discussing. The good news for ophthalmologists is, I suspect, most markets will see more subtle, not substantive, changes in the next several years.

Big Wild Cards

For ophthalmologists, the big wild cards in the short term include Medicare Part B payments and the impact of reduced government subsidies to the third-party managed-care companies that provide Medicare Part C — the Medicare Advantage plans. Although reducing the number of Part C payments may slow growth in the senior managed-care sector, accountable-care organizations (ACOs) are likely to provide a vehicle that could very well increase the rate at which Medicare steers beneficiaries away from traditional Medicare Part B.

It is too early to make any predictions. However, based on the number of ACOs forming and the buzz on the street, I suspect we will see a return to the day of the eyecare carve-out contracts, where providers assume some financial risk to manage large populations of covered lives.

Strategies for Coping

In this landscape, I see these potential strategies for ophthalmologists.

• Position your practice to control your distribution and service channels. This will permit the practice to offer the highest level of care at the best rate, enabling the practice to proactively negotiate different reimbursement schemes that meet the needs of health plans and other contracting organizations.

• Lessen dependence on third-party contracts by expanding your offering of elective and cash-pay procedures.

• Consider integration strategies that leverage fixed overhead (staff and facilities). In the coming years, many more solo or small group practices will “give in” to the cumulative weight of regulatory and pricing pressures and seek out collaborative opportunities. Many will choose to exit sooner while lowering expectations of practice value. Great opportunities will exist for those with a scalable platform for growth.

• Adopt a more “inclusive” attitude. Over the past 25 years or so, many eyecare providers have “left the nest” of mainstream medicine by developing outpatient surgical facilities. Additionally, referrals for eye disease can bypass traditional channels as patients often self-refer to an ophthalmologist or optometrists triage them for medical and surgical care.

A Resourceful Pedigree

Ophthalmologists are, by nature, a resourceful group. In this instance, I don't believe it will be any different. When we look back 20 years from now, I am confident ophthalmology will retain its market position as an independent, innovative, forward-thinking specialty focused on new and better drugs, devices, and procedures that will provide high-quality care and cost-effective solutions for patients.

On the other hand, I do not think you should ignore these forces and expect your practice will be forever immune. Regardless of the outcome of the presidential election and the future for the ACA, the market has moved. Changes are in play that will have a profound effect on health care in the coming years. OM

Bruce Maller is president and CEO of BSM Consulting, an internationally recognized healthcare consulting firm headquartered in Incline Village, Nev., and Scottsdale, Ariz. Content and resources discussed in this article are available at the BSM Café at www.BSMCafe.com.