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Aytan Dahukey is a partner in the Corporate Practice Group in the firm’s Century City Office.

San Francisco (Tuesday, January 9, 2018): Day 2 of the 2018 JP Morgan Healthcare Conference provided concrete examples of the trends that have been discussed in recent years – the impact of shifting healthcare delivery modalities on hospitals, the opportunity for retail medicine, the need for more effective management of chronic conditions and the increasing relevance of the Chinese markets. While some attendees complained about a lack of blockbuster announcements, today’s presentations were intriguing as an example of how the consulting and conference recommendations of the 2010 – 2014 period now are being played out in the real world of healthcare today. As the CEO of Advocate Health Care said, with tongue in cheek and quoting Game of Thrones, “Winter is coming….” and healthcare delivery will become even more difficult. There also was cause for optimism as well, as we saw multiple vibrant strategies for growth, including a continuing shift to value-based and risk-based reimbursement structures.
Continue Reading Notes on Day 2 of the JP Morgan Healthcare Conference

San Francisco (Monday, January 8, 2018): Outside it was raining heavily today in San Francisco, but inside the 2018 JP Morgan Healthcare Conference the weather was distinctly sunny. Nary a hint of gloom or pessimism was heard today from the hospitals and health plans presenting at the conference, even after the joys of last year’s “repeal and replace,” tax “relief” and the multiple redirections from CMS. Instead, we saw optimism, continuing implementation of prior strategic plans and, generally, continuing consensus of the need for greater scale; more analytics, digital engagement, big data and artificial intelligence; more population health management; and value-based/risk-based arrangements. Here’s some highlights from today’s proceedings:
Continue Reading Day 1 Notes from the 2018 JP Morgan Healthcare Conference in San Francisco

In a proposed rule published Tuesday, August 15, 2017, the Centers for Medicare & Medicaid Services (CMS) announced its intention to roll back a handful of payment models introduced under the Obama Administration. If implemented, the rule would cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) Incentive Payment Model, each currently set to begin next year. The rule would also cut the number of mandatory participation locations in the Comprehensive Care for Joint Replacement (CJR) Model from 67 to 34.
Continue Reading CMS Aims to Nix Obama-Era Payment Models

Dr. Mario Molina, CEO of Molina Healthcare, discusses the implications of potential cuts to cost sharing reduction payments under the Affordable Care Act by the Trump Administration.  Cost sharing reduction payments are viewed by many as essential in the provision of healthcare to low income individuals as they help to reduce co-pays and deductibles that may otherwise be out of reach for many.  Dr. Molina distills the issue into lay terms and provides some insight into the future of the government’s involvement in the healthcare markets under the new administration.
Continue Reading CEO of Molina Healthcare Discusses Implications of Cuts to Affordable Care Act

Addressing the Social Determinants of Health:  Is the healthcare industry pushing a rock up a hill?  We collectively are trying to provide healthcare with improved quality and reduced cost, but the structure of the nation’s healthcare system remains heavily siloed with the social determinants of health often falling wholly or partly outside the mandate and reach of the healthcare delivery system. Bernard Tyson of Kaiser on Monday noted studies that health is determined approximately 30% by family history and genetics, with the majority of the healthcare impact coming approximately 40% from personal behavior, 20% from environmental factors and 10% from healthcare services.  So, the playing field, if the above numbers are correct, is tilted much more toward nurture, rather than nature.  While we are aware of some hospitals starting to provide housing or other limited services to address the needs of their community and therefore also to address healthcare cost containment, those examples are the exception to date, rather than the rule.
Continue Reading Food for Thought (and Health): Day 2 Notes from the JP Morgan Healthcare Conference

A large amount of wind, much discussion about the U.S healthcare, and the public getting soaked again – if you were thinking about Washington, DC and the new Congress, you’re 3,000 miles away from the action. This is the week of the annual JP Morgan Healthcare conference in San Francisco, with many thousands of healthcare operators and investors flooding Union Square again only to be greeted by one of the worst storms and floods in the recent history of the Bay Area.  Can’t help thinking about the coincidence of nature providing us with a metaphor for the possible upcoming repeal of the Affordable Care Act.
Continue Reading Looking Forward/Looking Backward – Day 1 Notes from the JPMorgan Healthcare Conference

The Centers for Medicare and Medicaid (CMS) announced on March 10, 2015 that it is adding a new Accountable Care Organization (ACO) model to its cadre of innovative models.[1] Titled the “Next Generation ACO Model,” CMS’ new ACO model allows provider groups to assume higher levels of financial risk and reward than currently available under its Pioneer Model and Shared Savings Program model. CMS noted that the goal of the Next Generation ACO Model (Next Generation) is to “test whether strong financial incentives for ACOs can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.”[2]
Continue Reading Medicare ACO v. 3.0—More Risk, More Money?

Some of the largest healthcare providers and insurers in the country have joined to form the Healthcare Transformation Task Force in an effort to change healthcare industry payment models.  The announcement of the task force and its efforts come shortly after the Department of Health and Human Services announced plans to overhaul Medicare’s fee-for-service program and transfer non-managed care spending to contracts that incentivize quality performance and cost control.  A unified vision of shifting to incentive based contracts has brought together health systems, Ascension, Trinity Health, Partners HealthCare, and Advocate Health Care, insurance titans Aetna and Health Care Service Corp., and Caesars Entertainment and the Pacific Business Group on Health to form the Healthcare Transformation Task Force.  The goal of the task force is to transform 75% of their business contracts to incentive based contracts focused on improving healthcare quality and lowering healthcare costs.
Continue Reading Task Force of Healthcare Providers and Insurers are Shifting to Incentive Based Contracts

The Centers for Medicare and Medicaid Services (CMS) recently released second year results on its Pioneer Accountable Care Organization (ACO) program. [1] [2]  The Pioneer ACO program is CMS’ ambitious foray into the ACO space and a predecessor to the broader Medicare Shared Savings Program (MSSP) that has resulted in the formation of hundreds of new ACOs nationwide.  CMS originally selected 32 provider organizations with a proven ability to coordinate care for their patients with the goal of transitioning the providers in those organizations from a fee-for-service payment model, to a shared savings model and finally to a population based payment model.  The Pioneer ACO program kicked off in 2012 and was intended to (1) improve quality and health outcomes for patients served by each Pioneer ACO, (2) achieve cost savings for the Medicare program and (3) reward providers who were able to achieve the dual goals of cost savings and improved quality.  Furthermore, Pioneer ACOs are eligible for higher levels of shared savings and subject to greater downside risk than MSSP ACOs. So, how have the Pioneer ACOs performed during their first two years?
Continue Reading Pioneer ACOs: Slowed Health Spending, Improved Quality and More Drop Outs?

The Centers for Medicare & Medicaid Services (“CMS”) finalized a rule on August 29th which should give providers some breathing room in complying with meaningful use requirements for the Electronic Health Record (“EHR”) Incentive Program (the “Final Rule”).  The EHR Incentive Program was developed by CMS to motivate health care providers to use and implement EHR systems.  Under the EHR Incentive Program, hospitals and healthcare professionals can qualify for incentive payments from CMS for “meaningful use” of certified EHR technology (“CEHRT”).  However, both the definition of “meaningful use” and the technologies which qualify as CEHRT are moving targets under the EHR Incentive Program and vary by “Stage.”  The EHR Incentive Program consists of Stages 1, 2 and 3 which represent set time periods during which providers must implement CEHRT to receive payments.  Each Stage has progressively more robust meaningful use objectives and clinical quality measures.  As a result, providers must continually update their EHR technology and quality assurance programs to receive payments under each Stage.
Continue Reading Final Meaningful Use Rule: CMS Loosens its Grip