What to Expect from a Biden Presidency: VBP Contracting for Health Plans

By Raj Lakhanpal, MD, FACEP, CEO, SpectraMedix
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With a new president in office, the entire country is wondering how one of Biden’s major platforms—healthcare reform—will manifest. With a mixed Congress and a very likely a Republican Senate, many of the ambitious healthcare policies expected by the Biden presidency are likely to end up gridlocked.

While we can expect the healthcare industry to remain largely the same, there are a few key areas we may see develop over the next four years:

 

COVID-19

COVID-19 has proved itself resilient and will touch every facet of healthcare within the next six months, and even with the availability of vaccines, may have significant impact going into 2022. The pandemic will be an economic shadow above both the state and federal governments as the need for COVID relief rises. While the number of members on Medicaid rolls will continue to rise, states might be forced to reduce Medicaid spending due to constrained budgets. Management of social factors, economic factors, and racial disparities will all play a bigger role in keeping America healthy. COVID will be taken into consideration in many healthcare and economic policies.

 

Value-Based Payment

The transition to value-based payment is likely to accelerate with key areas of interest being reducing the total cost of care and the medical loss ratio to both reduce costs and ease financial strain across federal, state, and employer levels. As CMS turns the tide from encouraging provider participation to producing better outcomes, providers will find themselves in more downside risk arrangements, including capitation and bundled payment arrangements.

Those who will reap the most benefit from value-based payment arrangements will be payers and providers with grounded, actionable plans that consistently decrease costs, improve outcomes, and improve patient satisfaction. Both payers and providers will utilize healthcare technology that facilitates transparency, mutual collaboration, interoperability, and patient engagement to ultimately achieve the quadruple aim.

 

Medicare & Medicaid

While Biden ran on a campaign promise of lowering the Medicare eligibility age to 60, that goal is very unlikely to be realized. With 67.7 million seniors currently enrolled in Medicare, if eligibility is lowered to the age to 60 it would increase Medicare coverage by up to twenty million Americans and reduce insurance costs for employers. Regardless of eligibility age, Medicare Advantage will continue expanding and health plans will continue to emphasize RAF (Risk Adjustment Factor) score optimization with their provider networks and improve their STAR ratings to attract new members.

Under the assumption that the ACA survives its ruling in 2021, Medicaid enrollment will continue to grow. The immediate growth will largely be attributed to the effects of COVID-19, such as unemployment and coverage loss. Given the growing financial strain and continued effects of COVID-19, more states may consider or opt for Medicaid expansion. We may soon see states like Texas, which is being petitioned by in-state healthcare organizations to expand Medicaid, opt in.

 

Social Determinants of Health

While some believe that COVID-19 replaced social determinants of health (SDOH) on the healthcare stage, the reality is that it actually highlighted the importance of SDOH. Social determinants of health are attributed to at least 80% of outcomes and 68% of people have at least one social determinant. CMS will sustain its attention on rural and behavior health, as well as many of the racial health disparities revealed by COVID-19. Biden had planned on developing a racial health disparities task force. If this task force comes to fruition, we can also expect this particular social determinant to be woven into more value-based contracts.

Overlapping with SDOH, Medicaid may become better positioned and a more attractive business line. State waivers will promote closing gaps in care for underserved populations and non-medical, community-based services will be integrated into the health plan workflows and networks.

I welcome discussion on this topic, so please feel free to respond on LinkedIn or reach out to me directly at my email address: raj.lakhanpal@spectramedix.com.

 

Tags: Value Based Payments, Health Plans