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Health Catalyst — Executive Briefing: Navigating Financial Risk, Workforce Strain & System Shifts (Medicaid (May 2025)
67 slides from Health Catalyst's conference presentation, May 21, 2025
Slide 1: Executive Briefing: Navigating Financial Risk, Workforce Strain & System Shifts
Executive Briefing: Navigating Financial Risk, Workforce Strain & System Shifts John Janas, M.D. and Jacqueline Matthews, RN, MS © Health Catalyst. Confidential and Proprietary.
Slide 2: Health Catalyst Experts
Health Catalyst Experts Dr. John Janas Jacqueline Matthews, RN, MS Medical Director SVP, Solutions Consulting © Health Catalyst. Confidential and Proprietary.
Slide 3: Agenda
Agenda Navigating the Evolving Healthcare Delivery Landscape Identifying Risks and Opportunities in Episode-Based Alternative Payment Models Focus on CMS MIPS, APP Plus, and the TEAM (Transforming Episode Accountability Model) initiatives Strategic Approaches to Enhance Operational Stability
Slide 4: Healthcare Reform Overview
Healthcare Reform Overview Medicare began negotiations in 2023 for Over 21 million 10 high-cost drugs, with Americans are Rural hospitals price changes expected enrolled in ACA continue to close — by 2026 under the marketplace plans U.S. health over 140 rural Inflation Reduction Act. as of early 202
Slide 5: Medicaid Proposed Changes
Significant Medicaid cuts are currently under consideration in Congress as part of a broader Republican-led budget and tax proposal. Medicaid Proposed Changes The House Energy and Commerce Committee has introduced legislation aiming to reduce federal spending by $880 billion over the next decade, wi
Slide 6: National Enrollment in Medicaid & CHIP
National Enrollment in Medicaid & CHIP February 2020 to December 2024 By the Numbers Medicaid and CHIP Accounted for 8% of Net Federal Outlays in FFY 2024 36.5 million children (48%) Medicaid represents almost $1 out of 40.1 million adults (52%) every $5 spent on healthcare. Medicaid is jointly fina
Slide 7: Medicaid Proposed Changes (2025)
Medicaid Proposed Changes (2025) Work Requirements The proposal mandates that able-bodied adults meet work, education, or service hour requirements to qualify for Medicaid Eligibility Verification Beneficiaries would undergo biannual eligibility checks, and stricter citizenship verification would be
Slide 8: Medicaid Overhaul
Medicaid Overhaul Potential Impacts The Congressional Budget Office (CBO) estimates up to 10 million Americans could loss Medicaid coverage © Health Catalyst. Confidential and Proprietary.
Slide 9: Medicare Reforms
The CMS Medicare 2025 changes affect hospitals in several keyways, particularly through Medicare Advantage Medicare Reforms (MA) reforms, changes in payment policy, and service delivery expectations. These adjustments could raise hospital payments by approximately 5 to 7 billion nationwide © Health
Slide 10: Medicare Reforms
Medicare Reforms Operating and Capital Payment Increase: A finalized 2.9% increase in operating payment rates for general acute care. This adjustment is projected to raise hospital payments by approximately $2.9 billion nationwide. Uncompensated Care Payments: Disproportionate Share Hospitals (DSH)
Slide 11: Medicare Reforms
Medicare Reforms Quality Reporting and EHR Requirements: Hospitals must continue to meet the Hospital Inpatient Quality Reporting (IQR) Program and meaningful electronic health record (EHR) use criteria to qualify for the full payment updates. Bundled Payment Models: CMS is progressing toward its go
Slide 12: Potential Financial Impact
Potential Financial Impact Category Financial Impact (Approximate) Inpatient Payment Increase +$2.9 billion Uncompensated Care Payments +$560 million New Technology Add-On Payments +$94 million Outpatient Payment Increase +$2.2 billion Physician Payment Decrease -2.9% © Health Catalyst. Confidential
Slide 13: How Tariffs Impact Healthcare Costs and Access
How Tariffs Impact Healthcare Costs and Access Medical Equipment Pharmaceuticals Supply Chains costs for drug production Increased raw material Tariffs disrupt global Import tariffs raise equipment costs supply chain Hospitals pay more for Higher prescription Delays in critical essential tools price
Slide 14: Potential Outcomes
Potential Outcomes Medicaid Cuts Care avoidance reducing patient volumes Medicare Cuts Price cuts and funding changes reducing revenue ACA changes Increasing expenses for uncompensated care Increased costs- medical supplies, construction and Tariffs drug expenses Federal Grants Reduced funding for r
Slide 15: Times Are Changing
Times Are Changing © Health Catalyst. Confidential and Proprietary.
Slide 16: The Times They Are A Changing
THE TIMES THEY ARE A CHANGING… UNPLEASANT TRUTHS • AGING POPULATION • HEALTHCARE PROVIDER & STAFFING SHORTAGES • “BURNOUT” • BUDGET DEFICITS: FEDERAL > STATE > LOCAL > "HEALTHCARE" • FFS Reimbursement Rates DECREASING • MIPS EMPHASIS ON COST & QUALITY INCREASING • PAYMENT ADJUSTMENTS INCREASING • RI
Slide 17: Fee For Service vs. Value Based Care
Fee For Service (FFS) vs. Value Based Care (VBC) Volume Incentives vs. Cost & Quality Incentives (Risk Contracts – Population Management) FFS vs VBC “Traditional” FFS VBC requires controlling total reimbursement incentivizes costs of care while documenting Volume of Care improved quality of care and
Slide 18: Find Your Balance
FIND YOUR BALANCE FFS only VBC only FFS + VBC © Health Catalyst. Confidential and Proprietary.
Slide 19: Audience Poll 1
Audience Poll 1 Is your group’s financial incentives linked to FFS, VBC, or both? A Fee For Service ONLY B Value-Based Care ONLY C FFS & VBC D Unsure © Health Catalyst. Confidential and Proprietary.
Slide 20: Payment Adjustments MIPS 2025/2027
PAYMENT ADJUSTMENTS MIPS 2025/2027 Projected 2025 MIPS Participation and 2027 Payment Adjustments (ROI Opportunity) CMS estimates there will be 686,645 MIPS eligible clinicians in the 2025 performance period, the median final score will be 86.42, and 78 percent of MIPS eligible clinicians will recei
Slide 21: CMS Projections
CMS Projections 2027 Payment Year ; 2025 Performance CMS projects the median positive payment adjustment in the 2027 payment year based on 2025 performance will be 1.31 percent CMS median penalty will be -1.48 percent. CMS expects median penalty will be -6.42 percent for solo practitioners and -5.88
Slide 22: MIPS Performance Categories and Participation Models
Quality (30%) + Improvement Activities (15%) + Cost (30%) + Promoting Interoperability (25%) Merit-based Incentive Payment System (Traditional MIPS) MIPS Value Pathways (MVP) Advanced Alternative Payment Models (Advanced APMs) Medicare Shared Savings Program (MSSP) Accountable Care Organizat
Slide 23: Audience Poll 2
Audience Poll 2 What is your org’s MIPS Participation Model? A Merit-based Incentive Payment System (Traditional MIPS) B MIPS Value Pathways (MVP) C Advanced Alternative Payment Models (Advanced APMs) D Medicare Shared Savings Program (MSSP) Accountable Care Organization (ACO) © Health Catalyst. Con
Slide 24: 2022-2025 Overall Star Rating Distribution
2022-2025 Overall Star Rating Distribution MA-PD Contracts (Source CMS) Average STAR Rating decreased from 4.37 to 3.02 © Health Catalyst. Confidential and Proprietary.
Slide 25: Preventive Care Access is a Priority
Preventive Care Access is a Priority Need for increased efforts to promote and facilitate access to preventive services Only 5.3% of adults aged 35 and older received all recommended high-priority preventive services in 2020. Baseline data showed a fall from 8.5% in 2015. Objective AHS-08, Healthy P
Slide 26: Preventive Care Best Practices Are Not Fully in Place
Preventive Care Best Practices Are Not Fully in Place Diagnosis 59% of adults received a 52% of Medicare beneficiaries 16% of adults with hypertension Appropriate Management Testing/Monitoring colorectal cancer screening with diabetes mellitus had had it under control (2017-20) (2021) urinary albumi
Slide 27: Factors Contributing to Low Preventive Care Services
Factors Contributing to Low Preventive Care Services Primary care office infrastructure setup Aging population, and rising rates of currently to be very reactive to patient chronic disease, means demand for needs, not proactively managing care. primary and secondary preventive care Very difficult to
Slide 28: Access/Availability: AAFP Report by Specialty
Access/Availability: AAFP Report by Specialty Source: https://www.aafp.org/pubs/fpm/blogs/inpractice/entry/wait-times.html © Health Catalyst. Confidential and Proprietary.
Slide 29: Audience Poll 3
Audience Poll 3 What presents a greater challenge for your group: Access or Growth? A ACCESS: The ability to get timely appointments B GROWTH: The need to recruit new patients C BOTH: Access and Growth D NEITHER © Health Catalyst. Confidential and Proprietary.
Slide 30: Value-Based Care and/or Population Health Management Solution Requirements
Value-Based Care and/or Population Health Management Solution Requirements DATA AGGREGATION & STORAGE PRACTICE MANAGEMENT/FINANCIAL SYSTEMS Structured & Unstructured Data Billing and Coding HIE/EHR Data Aggregation/Integration Analytics Staffing and Workflow Management HEALTH ANALYTICS PAT
Slide 31: Do The Right Thing!
DO THE RIGHT THING! (Not Always Easy) Evidence-Based Best Practices + Quality RIGHT THING + Efficiency (Automation) Orgs need the necessary tools… FFS • Infrastructure (Network) VBC • Leadership • Evidence-based Best Practices • Quality Improvement • Workflow Efficiencies © Health Catalyst. Confiden
Slide 32: FFS or VBC Tech Enabled
FFS or VBC TECH ENABLED Use Case Example CMS TEAMs PREVENTIVE CARE QUALITY IMPROVEMENT: - LUNG CANCER SCREENING © Health Catalyst. Confidential and Proprietary.
Slide 33: CMS TEAMs (Transforming Episode Accountability Model)
CMS TEAMs (Transforming Episode Accountability Model) Episode-Based Alternative Payment Models Source: https://www.federalregister.gov/documents/2024/08/28/2024-17021/medicare-and-medicaid-programs-and-the-childrens-health-insurance-program-hospital-inpatient © Health Catalyst. Confidential and Prop
Slide 34: CMS TEAMs (Transforming Episode Accountability Model)
CMS TEAMs (Transforming Episode Accountability Model) Episode-Based Alternative Payment Models Voluntary: started January 1, 2025 through December 31, 2025 MANDATORY (select): January 1, 2026 through December 31, 2030 • Mandatory bundled payment initiative for ~750+ Hospitals Core Based Statisti
Slide 35: Audience Poll 4
Audience Poll 4 Is your Group a CMS TEAM site? (Transforming Episode Accountability Model) A YES: Voluntary in 2025 B YES: Voluntary in 2025 and Mandatory in 2026 C Not currently, BUT MANDATORY starting January 1, 2026 D NO © Health Catalyst. Confidential and Proprietary.
Slide 36: What is an Episode and What Costs Are Included
What is an EPISODE and What Costs Are Included Surgical Encounter PLUS all related Medicare-covered services within 30 days after discharge: Source: https://www.cms.gov/priorities/innovation/files/team-ovw-webinar-slides.pdf © Health Catalyst. Confidential and Proprietary.
Slide 37: Excluded From Episodes
EXCLUDED FROM EPISODES Source: https://www.cms.gov/priorities/innovation/files/team-ovw-webinar-slides.pdf © Health Catalyst. Confidential and Proprietary.
Slide 38: TEAMS: What Surgical Episodes Are Included?
TEAMS: WHAT SURGICAL EPISODES ARE INCLUDED? Source: https://www.cms.gov/priorities/innovation/files/team-ovw-webinar-slides.pdf © Health Catalyst. Confidential and Proprietary.
Slide 39: Aligned Elements of the Specialty Strategy and Beneficiary Care Experience
Aligned Elements of the Specialty Strategy and Beneficiary Care Experience Participants will be required to refer patients to Primary Care Services to support patient continuity of care and positive long-term health outcomes. Source: https://www.cms.gov/blog/cms-innovation-centers-strategy-support-p
Slide 40: Increased Demand for Primary Care
INCREASED DEMAND FOR PRIMARY CARE Source: https://www.cms.gov/priorities/innovation/files/team-ovw-webinar-slides.pdf © Health Catalyst. Confidential and Proprietary.
Slide 41: Episode Target Prices & Reconciliation Bonuses/Penalties
Episode Target Prices & Reconciliation Bonuses/Penalties Calculated using historical regional spending patterns THEN DISCOUNTED 1.5-3% NOTE: Hospitals must outperform regional historical averages to receive their bonus and avoid penalties High-quality scores (good outcomes and patient satisfac
Slide 42: How Can You Control Episode Costs?
How Can You Control Episode Costs? REDUCE Hospital Complications and Readmission Rates: Evidence-based Surgical Best Practices (ERAS®-like) Protocols: preoperative nutrition, comorbidity monitoring and management, infection prevention (SSIs), early mobility, DVT prophylaxis, adequate pain manage
Slide 43: How Can You Control Episode Costs?
How Can You Control Episode Costs? MINIMIZE Unnecessary or Redundant Services (PAT): Coordinate preoperatively and make available at time of surgery any necessary labs, diagnostics, imaging, or specialty consults Prevent post-discharge emergency room visits through seamless transitions of care
Slide 44: How Can You Control Episode Costs?
How Can You Control Episode Costs? MAXIMIZE DATA & ANALYTICS Facilitate clean and comprehensive data acquisition of clinical and financial elements Use analytics to proactively identify areas for improvement in clinical, quality, and financial metrics Continuously gather, monitor, and analyz
Slide 45: Value-Based Care and/or Population Health Management Solution Requirements
Value-Based Care and/or Population Health Management Solution Requirements DATA AGGREGATION & STORAGE PRACTICE MANAGEMENT/FINANCIAL SYSTEMS Structured & Unstructured Data Billing and Coding HIE/EHR Data Aggregation/Integration Analytics Staffing and Workflow Management HEALTH ANALYTICS PAT
Slide 46: Total Knee Arthroplasty Patient-Reported Outcome-Based Performance Measure
Patient completes HOOS JR and additional required components in Total Knee Arthroplasty form and then “Submits” Patient-Reported Outcome-Based HOOS JR & PROMIS-10 Performance Measure automatically scored (THA/TKA PRO-PM) Results automatically sent as structured data to EHR © Health Catalyst. C
Slide 47: Pre & Post-Operative Surgical Best Practices
Pre & Post-Operative Surgical Best Practices REDUCE Complications and Readmission Rates: © Health Catalyst. Confidential and Proprietary.
Slide 48: Pre & Postoperative Surgical Best Practices
Pre & Postoperative Surgical Best Practices REDUCE Readmission Rates! © Health Catalyst. Confidential and Proprietary.
Slide 49: Pre & Postoperative Surgical Best Practices
Pre & Postoperative Surgical Best Practices REDUCE Readmission Rates! © Health Catalyst. Confidential and Proprietary.
Slide 50: Pre & Postoperative Surgical Best Practices
Pre & Postoperative Surgical Best Practices REDUCE Readmission Rates! © Health Catalyst. Confidential and Proprietary.
Slide 51: IU Health POWERR Program Published Results
IU Health POWERR® Program Published Results Outcomes: • SSI, CAUTI, CDI and PSI were Pre-intervention Intervention Outcome Measure p-value significantly reduced (n= 9202) (n=6538) • Total compliance Surgical site infection (SSI) 52 22 0.044 to bundle elements lowered risk of HAI by 50% Catheter-asso
Slide 52: Secure Cloud-Based Patient Communication Tool
AI Secure-cloud-based patient communication tool that facilitates two-way active patient communication based on clinical pathways Cloverleaf IUH clinical pathways HL-7 Notification Staff and providers Existing IUH Infrastructure and Verification access Twistle dashboard. Monitor compliance and troub
Slide 53: Enhanced Compliance and Communication
Enhanced Compliance and Communication • Patient communication is key to management • A major consumer of FTE time and energy • Miscommunication often leads to unnecessary visits, increased cost of care, dissatisfaction, and adverse events Advocate Lutheran General Hospital’s Surgical Services 5/21/2
Slide 54: Federal Anti-Kickback Statute Safe Harbor: Beneficiary Incentives
Federal Anti-Kickback Statute Safe Harbor: Beneficiary Incentives Source: https://www.cms.gov/priorities/innovation/files/team-ovw-webinar-slides.pdf © Health Catalyst. Confidential and Proprietary.
Slide 55: FFS or VBC Tech Enabled
FFS or VBC TECH ENABLED Use Case Example CMS TEAMs PREVENTIVE CARE QUALITY IMPROVEMENT: - LUNG CANCER SCREENING © Health Catalyst. Confidential and Proprietary.
Slide 56: Audience Poll 5
Audience Poll 5 What is your group’s lung cancer screening rates? A >50% B >25-49% C <25% D Unknown © Health Catalyst. Confidential and Proprietary.
Slide 57: Lung Cancer Screening Opportunity (FFS &/or VBC)
Lung Cancer Screening Opportunity (FFS &/or VBC) Lung Cancer Screening (LCS) rates ~6.5% as of 2020; compared to 63% for colon and 64% for breast cancer screening in 2019. • In CA < 1% LCS rate Increased to 16% in 2024 © Health Catalyst. Confidential and Proprietary.
Slide 58: Why are LCS rates so low?
Why are LCS rates so low? 1. Provider & Patient Awareness of screening recommendations, outcomes, and options 2. Data Availability/Accuracy: Smoking status, year started, year quit, pack years history 3. Access Issues: - Medicare requires a shared decision-making (SDM) visit PRIOR to the first LDCT
Slide 59: Financial Impact of LCS: National Statistics
Financial Impact of LCS: National Statistics • G0296: SDM ~ $29.07 • 12-14% of initial screens are false • CPT code 71271, which refers to a positive (same as for mammography); "computed tomography, thorax, low drops to 6% for annual LCS; see the dose for lung cancer screening, without National Lung
Slide 60: Financial Impact of LCS: Healthcare System (FFS)
Financial Impact of LCS: Healthcare System (FFS) Using System DATA & ANALYTICS: • If all “at risk” patients received SDM for LCS and only 60% opt in for LDCT LCS, then 9,923 • # of LDCTs for Lung Cancer Screening in patients would be screened (~10-fold increase) 2024 = 1,075 (~7% of eligible patient
Slide 61: Earlier Diagnosis = Lower Treatment Costs
EARLIER DIAGNOSIS = LOWER TREATMENT COSTS Non-small cell lung cancer (NSCLC), total per-patient per-month health care costs after diagnosis significantly higher among those diagnosed at a Stage IV and lower among those diagnosed at Stage I ($7,239 Stage I, $9,484 Stage II, $11,193 Stage IIIa, $17,41
Slide 62: Financial Impact of LCS: Healthcare System (VBC)
Financial Impact of LCS: Healthcare System (VBC) Assuming 2-3/100 (initial scans) and 1-2/100 (f/u scans) identify a new lung cancer diagnosis, then this site would identify 100-300 new lung cancer diagnosis/year AND Assuming 50% of LDCT scans identify lung cancer at an earlier stage (I of II),
Slide 63: Earlier Diagnosis = Longer Survival
EARLIER DIAGNOSIS = LONGER SURVIVAL ACS 5-year survival rate for all stages of NSCLC is approximately 28%; 5-Year survival based on EARLIER (LOCALIZED) Stage 65-80% Source: https://www.lung.org/research/state-of-lung-cancer/states © Health Catalyst. Confidential and Proprietary.
Slide 64: Lung Cancer Screening: 2025 MIPS Improvement Activity
Lung Cancer Screening: 2025 MIPS Improvement Activity Implementation of Protocols and Provision of Resources to Increase Lung Cancer Screening Uptake (IA_PM_24) Improvement Activities 15% • 104 Improvement Activities for 2025 o 2 new: Implementation of Protocols and Provision of Resources to Incre
Slide 65: Do The Right Thing!
DO THE RIGHT THING! (Not Always Easy) Evidence-Based Best Practices + Quality RIGHT THING + Efficiency (Automation) Orgs need the necessary tools… FFS • Infrastructure (Network) VBC • Leadership • Evidence-based Best Practices • Quality Improvement • Workflow Efficiencies © Health Catalyst. Confiden
Slide 66: Value-Based Care and/or Population Health Management Solution Requirements
Value-Based Care and/or Population Health Management Solution Requirements DATA AGGREGATION & STORAGE PRACTICE MANAGEMENT/FINANCIAL SYSTEMS Structured & Unstructured Data Billing and Coding HIE/EHR Data Aggregation/Integration Analytics Staffing and Workflow Management HEALTH ANALYTICS PAT
Slide 67: Questions?
Questions? Our Health Catalyst Experts Dr. John Janas | Medical Director Jacqueline Matthews, RN, MS| SVP, Solutions Consulting Alora Martin | Webinar Program Manager hcwebinars@healthcatalyst.com © Health Catalyst. Confidential and Proprietary.