From a regulatory perspective, 2016 was certainly a busy year in seniors housing and care. From new bundled payment models to revised participation requirements, the Centers for Medicare and Medicaid (CMS) rolled out new guidance and rules at a rapid pace. With a new administration and a new leader at the helm of Health and Human Services (HHS, the agency under which CMS operates), 2017 could turn out as interesting as 2016. Here are the regulatory areas I’ll be keeping my eye on in the next year.

Arbitration Agreements

CMS published its final rule on requirements of participation for nursing homes in September 2016. While many components of the rule were welcomed by operators, some opposed CMS’ prohibition of arbitration agreements. Nursing home contracts often include pre-dispute arbitration agreements intended to settle disputes out of court, as explained in this blog post from October.

The American Health Care Association (AHCA) successfully argued that this prohibition should not be implemented until its pending lawsuit against the agency over the measure is resolved. AHCA maintains that CMS lacks the authority to direct what nursing home operators put in contracts with residents, including arbitration agreements. Assisted living and other provider groups are also paying close attention to the resolution of this issue because if the Supreme Court sides with CMS, a precedent could be established that affects other seniors housing provider types.

President-elect Trump’s appointment of Rep. Tom Price as HHS Secretary could itself resolve this issue. Price, a notably pro-business Republican with professional experience as an orthopedic surgeon, may instead choose not to pursue the legal case with AHCA, and the measure could be perpetually shelved. One thing to note, however, is that support for Price’s appointment has been inconsistent. For example, a faction of the American Medical Association (AMA) left the group after the AMA released a statement in support of Price’s nomination. Democrats in the Senate may target him as a cabinet member to block, according to Bloomberg, CNN, Reuters, Kaiser Health News, and others.

The Centers for Medicare and Medicaid Innovation

The fate of the Centers for Medicare and Medicaid Innovation (CMMI) is also in flux this year. This organization was created through the Affordable Care Act (ACA) to develop and test new health care delivery and payment models, such as Bundled Payments for Care Improvement (BPCI) and Comprehensive Care for Joint Replacement (CJR). If the Republicans successfully repeal the ACA, CMMI could fall by the wayside.

Price has voiced concerns he has with CMMI, including his disapproval of making CJR a required bundled payment program. It is not clear what will happen to CMMI, but in all likelihood, CMMI will go through major changes in 2017, although the existing work to reform payment models may survive in some form. For example, CJR could change from a mandatory program to a voluntary one.

MACRA

While the future of the ACA and CMMI is uncertain, the Medicare Access and CHIP Reauthorization Act (MACRA) is here to stay. This legislation passed the House and Senate with overwhelming bipartisan support, unlike the ACA. And while CMMI is the engine driving innovation in payment reform pilots, MACRA is where CMS gains the statutory authority to require providers to adopt these value-based payment models.

Under MACRA, physicians will have the choice of reporting extensive performance data back to CMS or participating in an advanced alternative payment model. The latter option, which is designed to be more lucrative for and attractive to physicians, is where seniors housing comes into play, as many of the models include coordination with post-acute providers. Eventually MACRA aims to push the majority of physicians into these advanced alternative payment models, which could lead to more opportunities for partnerships between post-acute providers and physician groups.

CMS may announce newly approved alternative payment models under MACRA as early as January 2017 and will spend the rest of the year examining proposals for additional models to be implemented in January 2018. Skilled nursing providers will have to wait until 2018 for CJR and BPCI to be formally approved, but these two bundled payment models will likely be considered advanced alternative payment models in January 2018, if they are tweaked to align with the exact requirements found in MACRA. In the event that CJR and BPCI are added to the list of eligible advanced alternative payment models under MACRA, more physicians could be attracted to participate in the models and open up even greater partnership opportunities with post-acute providers.

What regulatory changes are you expecting to have the biggest impact on seniors housing and care in 2017? Do you think the new administration will reverse the trend toward value-based payments or stay on course? Check back with me throughout the year to see how health care policy in 2017 unfolds.

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