With the rise in chronic medical conditions in the United States, the health care services provided by community-based specialty practices are more important than ever. Yet, the continued success of this segment of the health care delivery system is being challenged by a number of industry-wide forces that threaten their clinical and financial viability.

McKesson Specialty Health works with community-based medical practices in a number of specialties - rheumatology, gastroenterology, neurology, urology, ophthalmology, oncology, among others - to improve their patient care and business outcomes.

Based on its work serving specialty practices over the past year, experts from McKesson Specialty Health have identified the top three trends that will impact the performance of specialty practices in the year ahead.

1. Transition to Value-Based Reimbursement Models

Value-based reimbursement models like Medicare’s accountable care organization (ACO) program, Bundled Payments for Care Improvement (BPCI) initiative, Chronic Care Management (CCM) Services program, Oncology Care Model (OCM) and Merit-based Incentive Payment System (MIPS) all directly impact how specialty practices care for their patients. Each strive to drive more value from health care services by rewarding specialty practices for meeting or exceeding specific quality-improvement and cost-reduction targets and penalize those who don’t. With the number of value-based reimbursement models for specialty practices expected to grow unabated along with the size of their respective financial rewards and penalties, learning how to adapt is critical to business success. The most effective way to transition in 2017 and beyond will be building the technological infrastructure to collect, analyze and report performance data to Medicare and other payers and then adjusting practice patterns and behaviors to meet or exceed each program’s performance targets. That also means becoming adept at using advanced data analytics at the point of care to optimize the clinical and business value of the health care services provided by specialty practices to patients. Related: Five Steps to Prepare Oncology and Specialty Practices for MIPS

Top Three Specialty Practice Trends for 20172. Rising Costs for Specialty Drugs and Reimbursement Pressure

With a growing percentage of reimbursement fixed or put at-risk by value-based reimbursement models, specialty practices must reduce operating expenses to minimize financial exposure. With the cost of specialty drugs representing a big share of the operating budgets of most specialty practices, reducing drug spend is a logical target for cost control efforts in 2017. For example, IMS Health reported earlier this year that specialty drug spending rose 21.5 percent in 2015, more than double the 8.5 percent increase in overall drug spending last year. At the same time, payers are actively redesigning their health benefit plans to reduce their spend on specialty drugs prescribed or delivered by specialty practices. A report from United Benefit Advisors, an employee benefits consulting firm, said an increasing number of employers are adding a fourth tier to their drug benefit plans for specialty drugs that include higher co-payments for employees. For specialty practices, the combined pressure of higher drug costs and tighter reimbursement means aggressively negotiating contracts with drug manufacturers. It also means joining or participating in group purchasing organizations or other affiliated buying groups to secure the best prices for specialty drugs, supplies and equipment. Lastly, it means getting pre-authorization from payers for drug therapies and medical equipment and supplies to ensure reimbursement and avoid wasting expensive products.

3. Effective Regulatory and Legislative Advocacy for Specialty Practices

State and federal health care policies directly impact how specialty practices provide patient care and how they’re reimbursed for that care. The passage of the Patient Protection and Affordable Care Act in 2010 initiated the growth of value-based reimbursement programs that will continue in 2017 with the launch of MIPS and its Medicare Quality Payment Program partner Advanced Alternative Payment Models (APMs). The rules implementing MIPS and APMs are final, but updates, refinements, clarifications and guidance from Medicare will be ongoing and a focus this year, particularly as the new president’s administration begins to implement its own health care policies. It will be more important than ever for specialty practices and their physicians to be informed and engaged with the regulatory and legislative health care policy changes that could impact community-based specialty care. Specialty practices should not just learn about these issues, but be positioned to influence those changes. Specialty practices can become more active in their local, state and national medical associations in 2017 and work with the public policy teams at their major health care vendor, supplier and distributor business partners.

The transition to value-based care is here, with the need for specialty practices to control their drug spend becoming more critical, along with their need to know about and influence health care policy changes directly affecting how they provide and are reimbursed for patient care. These three trends should be top of mind for community-based specialty practices as they head into 2017.

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McKesson editorial staff is committed to sharing innovative approaches and insights so our customers can get the most out of their business solutions and identify areas for operational improvement and revenue growth.

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