Hospital and provider groups cheer new CMS flexibility on telehealth, capacity and ACO losses

A coronavirus blood test with money
Hospital groups applauded a series of regulatory fixes the Centers for Medicare & Medicaid Services rolled out Thursday. (Getty/photovs)

Hospital groups largely cheered a raft of regulatory changes made by the Trump administration to expand telehealth and waive penalties for expanding capacity to fight the COVID-19 pandemic.

The Centers for Medicare & Medicaid Services (CMS) issued the changes Thursday, which include making it easier for hospitals to establish drive-thru and parking lot testing facilities and helping accountable care organizations (ACOs) mitigate major losses sparked by COVID-19.

The National Association of Accountable Care Organizations (NAACOS) was pleased that CMS will adjust its financial methodology to account for the impact of COVID-19 costs.

This will ensure that ACOs are “treated equitably regardless of the extent to which their patient populations are affected by the pandemic,” CMS said.

RELATED: Half of physicians now using telehealth as COVID-19 changes practice operations

ACOs agree to take on a certain amount of financial risk and must repay Medicare for any losses they generate but get a share of any savings. However, the COVID-19 pandemic has caused costs to soar, and revenues at ACOs have plummeted due to the cancellation of elective procedures.

But NAACOS wasn’t as pleased with CMS’ decision to forego the annual application cycle for 2021. Any ACO with participation set to end this year will have the option to extend their agreement for another year.

“ACOs that are required to increase their financial risk over the course of their current agreement period in the program will have the option to maintain their current risk level for next year, instead of being advanced automatically to the next risk level,” the agency said.

NAACOs wants CMS to have a partial 2021 performance year as the healthcare industry stabilizes.

“NAACOS remains concerned about the uncertainty of the length of the public health emergency and believes COVID-related costs should be removed from the entire performance year,” the group said.

The group also wanted an extension for the dropout deadline for the Medicare Shared Savings Program, which is at the end of May.

RELATED: Blue Cross MN CEO: Why COVID-19 may be making the case for value-based care

It should be extended until much later in the year when “there is more certainty about the pandemic,” NAACOs said.

A survey from the group released last month found that 56% of ACOs were likely to leave the program to avoid paying back any COVID-19 financial losses.

Other provider groups were happy with several changes released by CMS, chief among them to reimburse physicians for audio-only telehealth visits.

Hospital groups were pleased the agency allowed teaching hospitals to expand their bed capacity without facing reduced Medicare payments. The groups were also pleased that CMS will allow certain provider-based hospital outpatient clinics to relocate off-campus and not face a decline in payments.

Currently, most provider-based hospital outpatient departments that relocate off-campus are paid at a lower rate.

“These critical regulatory changes will remove barriers to care and improve access for patients by allowing teaching hospitals to increase surge capacity without being penalized, relocate outpatient clinics to better serve their communities, and more efficiently deploy the nation's health care workforce by clearing a path for medical residents to support community hospitals with workforce needs,” said David Skorton, president and CEO of the Association of American Medical Colleges.

The American Hospital Association added that it was pleased the agency expanded telehealth services and is working on additional waiver suggestions so “hospitals and health systems on the front lines can provide the right care in the right location.”

Suggested Articles

Major health groups raised alarm following the announcement by President Donald Trump that the U.S. is terminating its relationship with WHO.

The COVID-19 pandemic is proving to be a “great equalizer” for behavioral health. And that's a trend an expert at Teladoc expects so see continue.

A greater number of health systems may fall short of agreements tied to their borrowing compared to prior years, according to a new report.