2014 Year-in-Preview: Six trends that will impact healthcare finance

With 2014 upon us, here are FierceHealthFinance's predictions of six trends that will impact healthcare finance in the coming year:

1. Medicaid expansion

Despite the fact that about half of states adamantly insist that they will not expand Medicaid eligibility under the Affordable Care Act, this actually remains an unsettled issue. Two factors come into play. The first is that states such as New Hampshire, Maine and Pennsylvania remain on the fence, with their legislatures and governors still undecided about expansion. Expect some hard and fast decisions during the year. The other factor is peer pressure--expect the American Hospital Association and its brethren on the state level to use the declining uncompensated care figures in states that expand Medicaid to persuade lawmakers in those holdout states to change their minds. Litigation in Ohio and Arizona will also likely decide if those states' plans to go ahead with expansion will be upheld. Republican governors in both states made end-runs around their legislatures to enact expansion. If the courts rule in favor of expansion, governors elsewhere may take matters into their own hands.

2. Shifts in the charity care paradigm

With millions of previously uninsured Americans enrolled in Medicaid and commercial plans after the rollout of the Affordable Care Act, expect to see some hospitals reduce the amount of charity care and uncompensated care provided, primarily in the ACA-friendly West and East. But since glitches in HealthCare.gov hampered enrollment in the federal exchange and the one operated by Oregon, don't expect the numbers to be dramatic. And as the out-of-pocket costs for some of the plans offered on the exchange are still fairly steep, don't be surprised to see some charity care writeoffs attributed to insured patients.

3. Price transparency

The Healthcare Financial Management Association has pushed price transparency efforts, citing increased pressure from consumers. Expect to see a few hospitals announce some modest changes and the HFMA to perhaps launch some transparency tools. But since leverage on pricing remains so firmly in the hands of hospital leadership, they're not going to give it all away just yet--if ever.

4. More accountable care organizations

There will be more initiatives and more bundling. In the wake of recent pullouts of participants in the Pioneer ACOs, anticipate some more imaginative shared savings/cost-sharing formulas that govern their structures.

5. More financial audits

Recovery audit contractors' scrutiny of hospital billings continued to build in 2013, strongly suggesting the trend will continue in 2014. What makes this more likely: The Centers for Medicare & Medicaid Services concurs with a recent report by the Office of the Inspector General suggesting that RACs scrutinize high-billing doctors.

6. No SGR fix

Congress has been granting pay hikes to physicians while bypassing the sustainable growth rate formula and declaring it unworkable for a decade now. Since that method appears to work and most of the proposals for SGR replacement begin with freezing physician payments for the rest of the decade--something doctors don't like--don't expect lawmakers to make big changes here.