Healthcare – A Look Ahead at 2013

Rod Benson prepared this blog.  He serves as Counsel for the Washington, D.C. law firm Buchanan Ingersoll & Rooney.  Rod previously served as the Director of Acquisition and Grants for the Centers for Medicare and Medicaid Services.


As companies consider business opportunities with the Federal Government, they are increasingly pursuing healthcare-related contracts.  Budgets throughout the Federal Government are tightening.  The threat of sequestration may result in significant budget cuts for the Department of Defense (DOD).  However, budgets for agencies like the Centers for Medicare and Medicaid Services (CMS) continue to grow based upon expanded responsibilities.  As a result, in the past few years, many traditionally DOD contractors have ventured into healthcare.

The coming year should offer increased contracting opportunities in healthcare.  Most significantly, the Affordable Care Act (ACA) requires that Health Insurance Exchanges be operational in each State by January 1, 2014.   Enrollment in exchanges must begin on October 1, 2013.  Only 17 States and the District of Columbia currently are on track to have exchanges in place by October 1, 2013.  CMS’s Centers for Consumer Information and Insurance Oversight (CCIIO) is working to establish a Federally-facilitated exchange that will give individuals in those States that do not establish exchanges access to affordable health insurance.  ACA also provides for a significant expansion in State-administered Medicaid programs, although many States are expected to eschew Medicaid expansion.

ACA established the Center for Medicare and Medicaid Innovation (CMMI) within CMS to test innovative payment and service delivery models.  Medicare reimbursement to providers of services is generally made on a fee-for-service basis.  Many do not believe that this reimbursement model is sustainable.  The Hospital Insurance Trust Fund, which is the source of payment to hospitals and other institutional providers, is slated to be insolvent by 2024.  CMMI’s mission is to identify payment models that will lower costs while at the same time ensuring the quality of services provided to individuals.  It will also identify innovations that will improve the quality and reduce the costs of care provided under the Medicaid and Children’s Health Insurance Program.  Information technology systems will need to be developed to manage data and support new payment models.

CMS is also exploring new tools for detecting and preventing fraud and abuse.  CMS’s Center for Program Integrity has been assessing the use of predictive modeling and other measures to prevent criminals from enrolling as Medicare providers and to analyze billing patterns and other information to identify billing aberrancies that are indicative of fraudulent activity.  Use of predictive modeling to prevent fraud and abuse in health care programs can be expected to grow in the coming year.

The Medicare and Medicaid Electronic Health Record (EHR)  Incentive Programs provides incentive payments to eligible professionals and eligible hospitals that make meaningful use of certified EHR technology. Establishing EHRs for Medicare and Medicaid is expected to improve the delivery and quality of health care services.  The Military Health System and Veterans Affairs are also working to implement EHR for the active military, veterans and their dependents.  Many companies are developing devices and applications that will utilize data and information in EHR’s to assist individuals in managing their health and healthcare.

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