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BREAKING NEWS: CMS Publishes CY 2018 MACRA QPP Final Rule

November 2, 2017
by Mark Hagland, Rajiv Leventhal, Heather Landi, and David Raths
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On Nov. 2, CMS published its 2018 QPP final rule under MACRA, with important modifications for physicians

Late in the afternoon on Thursday, Nov. 2, the federal Centers for Medicare & Medicaid Services (CMS) published its calendar-year 2018 Quality Payment Program (QPP) final rule, under the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law.

As published in the Federal Register, CMS’s senior officials wrote, in the introduction to the 1,653-page published final rule, “Clinicians have told us that they do not separate their patient care into domains, and that the Quality Payment Program needs to reflect typical clinical workflows in order to achieve its goal of better patient care. Advanced APMs [alternative payment models], the focus of one pathway of the Quality Payment Program, contribute to better care and smarter spending by allowing physicians and other clinicians to deliver coordinated, customized, high-value care to their patients in a streamlined and cost-effective manner. Within MIPS [the Merit-based Incentive Payment System], the second pathway of the Quality Payment Program, we believe that integration into typical clinical workflows can best be accomplished by making connections across the four statutory pillars of the MIPS incentive structure. Those four pillars are: (1) quality; (2) clinical practice improvement activities (referred to as “improvement activities”); (3) meaningful use of CEHRT (referred to as “advancing care information”); and (4) resource use (referred to as “cost”). Although there are two separate pathways within the Quality Payment Program, Advanced APMs and MIPS both contribute toward the goal of seamless integration of the Quality Payment Program into clinical practice workflows,” CMS’s senior officials wrote.

And, CMS senior officials added, “This CY 2018 final rule with comment period continues to build and improve upon our transition year policies, as well as, address elements of MACRA that were not included in the first year of the program, including virtual groups, beginning with the CY 2019 performance period facility-based measurement, and improvement scoring. This final rule with comment period implements policies for ‘Quality Payment Program Year 2,’ some of which will continue into subsequent years of the Quality Payment Program.

“During my visits with clinicians across the country, I’ve heard many concerns about the impact burdensome regulations have on their ability to care for patients,” said Seema Verma, Administrator of CMS, said, in releasing the final rule. “These rules move the agency in a new direction and begin to ease that burden by strengthening the patient-doctor relationship, empowering patients to realize the value of their care over volume of tests, and encouraging innovation and competition within the American healthcare system.”

Among the key points, as of a first reading of the final rule by Healthcare Informatics editors:

> CMS has retained a full-year reporting period for cost and quality. As CMS senior officials wrote on Thursday, “We are also finalizing that for purposes of the 2021 MIPS payment year, the performance period for the quality and cost performance categories is CY 2019 (January 1, 2019 through December 31, 2019). We note that we had previously finalized that for the purposes of the 2020 MIPS payment year the performance period for the quality and cost performance categories is CY 2018 (January 1, 2018 through December 31, 2018). We did not make proposals to modify this time frame in the CY 2018 Quality Payment Program proposed rule and are therefore unable to modify this performance period,

> In terms of the 2017 MIPS period final score, the performance category weights are: quality, 60 percent; cost, 0 percent; improvement activities, 15 percent; and Advancing Care Information, 25 percent. For the 2018 MIPS performance year final score, the weights will be: quality, 50 percent; cost, 10 percent; improvement activities, 15 percent; and Advancing Care Information, 25 percent.

>  The final rule raises the MIPS performance threshold to 15 points in year 2 (from 3 points in the transition year).

>  In terms of quality measures, the final rule states that quality, as a component of value-based payment, will be finalized at 50 percent of the total MIPS score in the 2020 payment year, and at 30 percent in 2021 and beyond.

>  Meanwhile, cost will be finalized at 10 percent in the 2020 payment year, and 30 percent in 2021 and beyond.

> “Advancing Care Information,” set at 25 percent of the MIPS final score in the transition year, will remain set at that level in year 2 of participation in the program.

>  “In this final rule with comment period, we are finalizing updates to the Improvement Activities Inventory,” CMS senior officials wrote in the rule. “Specifically, as discussed in the appendices (Tables F and G) of this final rule with comment period, we are finalizing 21 new improvement activities (some with modification) and changes to 27 previously adopted improvement activities(some with modification and including 1 removal) for the Quality Payment Program Year 2 and future years (2018 MIPS performance period and future years)Improvement Activities Inventory.”

>  The final rule allows the use of 2014 edition and/or 2015-certified electronic health record technology (CEHRT) in year 2 for the Advancing Care Information performance category, and gives a bonus for using only 2015 CEHRT.

>  The final rule awards up to five bonus points on a physician’s MIPS final score for the treatment of complex patients.

>  The low-volume threshold for MIPS exemption remains 200 Medicare patients, and the Medicare reimbursement threshold is $90,000 in Part B billings.

>  CMS is implementing provisions around allowing for the submission of data by virtual groups, with a number of provisions for how such virtual groups can participate in the MIPS program.

> CMS officials wrote that “We are not finalizing our proposal to provide clinicians the ability to opt-in to MIPS if they meet or exceed one, but not all, of the low-volume threshold determinations, including as defined by dollar amount, beneficiary count or, if established, items and services.” In other words, low-volume physicians will not be eligible to access potential value-based payment increases under Medicare over the next several years.

> CMS officials said that they are responding to concerns that small practice size could lead to problems in terms of accuracy of data involved. As the final rule puts it: “Several commenters supported using historical claims data to make a small practice size determination. One commenter also noted support for the definition of a small practice using the number of NPIs associated with a TIN.” As a result, they said, “We are finalizing that we will utilize a 12-month assessment period, which consists of an analysis of claims data that spans from the last 4 months of a calendar year 2 years prior to the performance period followed by the first 8 months of the next calendar year and includes a 30-day claims run out for the small practice size determination.”

>  Further, CMS officials noted that they are “adding  a significant  hardship  exception  from  the advancing  care information  performance  category  for  MIPS-eligible  clinicians  in  small  practices; providing  3 points  even  if  small  practices submit  quality  measures  below  data completeness standards; and providing  bonus  points  that  are added to the final  scores of MIPS eligible clinicians  who  are in  small  practices.”

>  Also, referencing recent natural disasters, the final rule automatically weights automatically weights the Quality, Advancing Care Information, and Improvement Activities performance categories at 0 percent of the final score for clinicians impacted by hurricanes Irma, Harvey and Maria and other natural disasters.

>  The final rule adds 5 bonus points to the final scores of small practices.

CHIME finds aspects around the cost element and the reporting period to be problematic

Healthcare Informatics caught up with Mari Savickis, vice president of federal affairs for CHIME (the Ann Arbor, Mich.-based College of Healthcare Information Management Executives), live at the CHIME Fall CIO Forum in San Antonio, Texas, for some feedback on the final rule. Says Savickis, “The ability to keep using 2014 CEHRT is a big deal for our members. That syncs up with what CMS finalized for hospitals and it gives clinicians more time [to implement 2015 CEHRT]. It also means that when you look at the ACI category, that’s the part that revolves around 2014 CEHRT. So that means that the transition measures under MIPS (modified Stage 2 ‘like’ measures) are still intact for another year. This is what we advocated for and supported.”

However, at quick glance, there are some aspects of the final rule that Savickis says CHIME does not support. For example, it does not like that CMS moved the cost category in MIPS up from a 0 percent weight in the proposal to a 10 percent weight in this final version. “It’s a significant concern; and they are also calling for the cost category to be weighed at 30 percent in 2019. That’s a tough pill to swallow,” she says, wondering if CMS was thinking that this would be a way for clinicians to “rip off the Band-Aid.”

What’s more, Savickis says that CHIME does not support a full-year reporting period for the cost and quality performance categories, as its members were hoping that these reporting periods would be 90 days instead of a whole calendar year. “Yes, there are some clinicians out there who can report for a full year, but making it mandatory is not supported. It should be voluntary,” Savickis attests.

Premier Inc. express concerns over a payment shift for provider-based hospital departments

Meanwhile, in a statement released by the Charlotte-based Premier Inc. on Thursday evening and attributed to Blair Childs, Premier’s senior vice president of public affairs, Childs offered a mixed view of the final rule. “Premier and its members commend the Centers for Medicare & Medicaid Services (CMS) for allowing individual or small group practice clinicians to join virtual groups as a new channel to participate in the Quality Payment Program’s Merit-based Incentive Payment System (MIPS),” Childs began. “We are also encouraged that CMS indicated its intention to develop a demonstration project to examine how Medicare Advantage (MA) alternative payment models qualify for the threshold test and obtain the five percent MACRA bonus prior to 2021. Nearly one-third of Medicare beneficiaries are enrolled in an MA plan. Many MA plans have engaged providers in innovative value-based contracts that are benefiting patients and should count toward qualifying eligible professionals for the bonus in 2019. This policy would level the playing field for clinicians in areas with high MA penetration.”

Those were the positive elements of the final rule, for Premier. “However,” the statement went on to say, “Premier and its members are disappointed with CMS’s decision to slash payment rates for non-excepted, off-campus, provider-based departments of hospitals by an additional 10 percentage points, from 50 to 40 percent. Basing this decision on an evaluation of a single code is unjustified and fails to reflect the higher costs that these sites incur relative to freestanding physician offices or account for outpatient packaging policies.”

As a result, Childs said, “This decision will reverse momentum on providing care across the continuum. At this transitional moment where the industry is moving from fee-for-service to value-based payment, this decision undermines the movement to provide care outside the walls of the hospital potentially leading to increased Medicare spending.”

Healthcare Informatics will update readers as additional developments occur in this story.

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NAACOS, AMA, Others Urge CMS to Reconsider MSSP Proposed Changes

September 21, 2018
by Rajiv Leventhal, Managing Editor
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The National Association of ACOs (NAACOS) and eight other healthcare stakeholder groups have sent a letter to the Centers for Medicare & Medicaid Services (CMS), expressing concerns about the federal agency’s proposed changes to the Medicare Shared Savings Program (MSSP).

In August, CMS proposed sweeping changes to the MSSP, by far the largest federal ACO model, with 561 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs (accountable care organizations) ought to move more quickly into two-sided risk payment models so that Medicare isn’t on the hook for money if the ACO outspends its financial benchmarks.

Specifically, CMS is proposing to shorten the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years. This proposal, coupled with CMS’ recommendations to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs—will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

NAACOS, comprised of more than 360 ACOs across the U.S., is one association that has been actively pushing back on the CMS proposal. The group believes that ACOs need, and deserve, more time in one-sided risk models since it takes years to develop the necessary infrastructure to be successful. What’s more, NAACOS is of the belief that one-sided risk ACOs actually save far more money than CMS gives them credit for.

NAACOS and others—including the American Medical Association (AMA), Medical Group Management Association (MGMA), and Premier—said in a press release accompanying the letter to CMS that the proposed Pathways to Success program would create several positive changes and includes a number of improvements the value-based community has previously recommended.

However, the groups also explained their concerns about CMS’ proposals to reduce the time new ACOs have in shared savings-only models from six to two years and to decrease the shared savings rate from 50 percent to 25 percent. The letter urges CMS to instead allow more time for ACOs in a shared-savings only model and to apply a shared savings rate of at least the current 50 percent to ensure a viable business model.

The groups wrote, “The MSSP remains a voluntary program, and it’s essential to have the right balance of risk and reward to continue program growth and success. Program changes that deter new entrants would shut off a pipeline of beginner ACOs that should be encouraged to embark on the journey to value, which is a long-standing bipartisan goal of the Administration and Congress and important aspect of the Quality Payment Program.”

It remains to be seen how CMS will respond to the pushback from NAACOS and others of late, though up to this point CMS has taken a firm stance that upside risk-only ACOs have not been effective. Thus, the federal agency seems to be fine with these ACOs leaving the MSSP if they are unwilling to take on more risk.

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Check and Checkmate: Is the Debate Around the MSSP ACO Program About to Get Super-Heated?

September 12, 2018
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Will NAACOS’s just-published study turn the tables on senior CMS officials? Or will it be ignored?

Something really quite extraordinary happened this week: NAACOS, the Washington, D.C.-based National Association of Accountable Care Organizations, published, in the august journal Health Affairs, a study based on research that NAACOS leaders had commissioned from Dobson DaVanzo & Associates, a healthcare economics consulting firm. And, as Healthcare Informatics Managing Editor Rajiv Leventhal noted in his report, “Medicare’s largest ACO (accountable care organization) initiative—the Medicare Shared Savings Program (MSSP)—generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by the Centers for Medicare and Medicaid Services (CMS),” according to the NAACOS/Dobson DaVanzo & Associates study.

And here’s what’s extraordinary about that: this is the first time in my memory that I’ve seen a national association of provider organizations commission independent research that directly contradicted federal government findings and statistics. Could this be the start of a major conflict over the direction of the MSSP program? The potential for actual conflict here is quite real. But first, let’s look at what NAACOS and Dobson DaVanzo found. As Leventhal noted, “The study, which used similar scientific methods as a 2018 peer-reviewed paper by Harvard researchers published in The New England Journal of Medicine, found that MSSP ACOs reduced Medicare spending by $541.7 million during the 2013 to 2015 timeframe, after accounting for shared-savings payments earned by ACOs.”

The MSSP is the largest value-based payment model in the U.S., growing to 561 ACOs with more than 350,000 providers caring for 10.5 million Medicare beneficiaries in 2018. Under current MSSP rules, new ACOs are eligible to share savings with Medicare for up to six years if they meet quality and spending goals but are not at financial risk for any losses. As such, CMS has been reiterating in recent months that these “upside risk-only” ACOs are costing the government money.

What’s more, as Leventhal noted, “To this point, in a recent proposed rule that has so far been met with varying degrees of scrutiny, CMS is proposing to shorten that glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years. This proposal, coupled with CMS’ recommendations to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs—will certainly deter new entrants to the MSSP ACO program. Importantly, CMS has essentially said they don’t mind if upside-only ACOs that are costing the government money leave the program if they aren’t willing to take on more financial risk. CMS Administration Seema Verma said in a press call following the proposed rule’s release that ‘[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended.’ Nonetheless, MSSP ACO participants seemingly performed quite well in 2017, despite CMS’ claims that they have been largely ineffective. In sum, the 472 ACOs that were in this model last year achieved $314 million in net savings to Medicare in 2017 after accounting for bonuses paid from the government, and $1.1 billion overall.”

For the NAACOS leaders, the key element here is that, as the authors of the Health Affairs article pointed out, “Despite the positive 2017 results, gauging MSSP performance based on calculations using administratively derived spending targets (benchmarks) is simply not an accurate way to measure overall program savings. In fact, the published academic research on MSSP performance points to much higher savings than are suggested by the benchmarks.”

Explained further by the researchers, for its analysis of Medicare ACOs, “CMS calculates an initial risk-adjusted spending benchmark for each ACO based on its historical spending for a group of attributed Medicare beneficiaries; it then trends this benchmark forward to the current program year based on the national average growth in Medicare spending per beneficiary.” The article’s authors further point out that if an ACO’s spending is less than the benchmark, and has a savings rate of at least 2 percent—and the ACO meets MSSP quality thresholds—it earns a shared savings payment that is typically 50 percent of the calculated savings. CMS then calculates total MSSP savings as the sum of total savings for ACOs with spending below the benchmark, plus the sum of spending above the benchmark for ACOs that exceeded it. Using this method, CMS estimated MSSP savings of $954 million between 2013 and 2015. During this period, ACOs that saved money earned $1.3 billion in shared savings payments. CMS concluded that on a net basis, the program increased Medicare spending by $344 million between 2013 and 2015, according to the NAACOS analysis and Health Affairs commentary.

At this juncture, there is an obvious issue here, because CMS’s calculation method implicitly makes it difficult for ACOs to show progress, since savings are benchmarked against administratively derived targets, rather than actual savings. Who came up with that method, anyway???

And the implications of using such a method are clear. As the press release that NAACOS issued upon the publication of the Health Affairs article noted, “Despite the growing ACO track record of improving quality and saving Medicare money, CMS, in an August 17 proposed rule, moved to shorten the time new ACOs can remain in the shared-savings-only model from the current six years to two years. Data show ACOs need more than two years to begin showing the benefits of forming an ACO. That proposal, coupled with CMS’s move to cut shared savings in half — from 50 percent to 25 percent for shared-savings-only ACOs — would deter new Medicare ACOs from forming.”

What’s more, the press release quoted Stephen Nuckolls, CEO of Coastal Carolina Quality Care in New Bern, N.C., which includes 63 providers caring for 11,000 Medicare beneficiaries, as stating that “It takes time and money to transform entrenched care delivery practices in local communities and build the critical mass to successfully integrate care, manage risk, and improve quality while reducing spending growth. Unfortunately, the proposed changes will hold up the move to value-based care by significantly undermining the business case to voluntarily form new Medicare ACOs.” 

I take Mr. Nuckolls’s charge very seriously. I interviewed him recently, and as he noted in our interview, when asked the secret of his ACO’s success so far in the six-plus years in which Coastal Carolina Quality Care has participated in the MSSP program, “[I]t takes time for some of these strategies, such as population health, to pay off. Another thing that’s going on is that our care management program, I give credit for keeping our costs low and getting things in place. And in addition,” he told me, “we really made a lot of strides in our first contract cycle, specific to our market. All of our annual wellness visits and preventive care, we made our marks there and that positioned us well in our second contract cycle. And it just takes time, when you focus on the quality of care, for… when a greater percentage of your patients have their blood pressure under control, you’ll have fewer adverse events. And when you work to lower a1cs, that will avert events over time. And annual wellness visits, vaccinations, screening services—it costs money for screenings; and once you get things set up, that’s then in place. And care management services—when you go into your second contract cycle, you have some of those costs worked into your contract cycle the second time; so it takes time to achieve shared savings, and to get the staff to focus on the sickest population.”

What’s more, what Nuckolls told me in our interview reflects what virtually every ACO leader I and my colleagues at Healthcare Informatics have heard from ACO senior executives—that it takes several years to lay the foundations for ACO success.

What’s more, Nuckolls told me, the results revealed in this data review-based study and article are important, as they speak to “the policy point—organizations are truly saving the government money, even if it doesn’t immediately show on paper. The evidence doesn’t support the idea that ACOs should be kicked out because they have a bad benchmark. The true savings to the Medicare Trust Fund will then be less. And that’s what they need to focus on, achieving true savings to the government.”

So, the obvious question now is, what will happen next? Will CMS Administrator Seema Verma lash out against NAACOS, denouncing this “rival” analysis of MSSP ACO savings? Will she ignore it? Or will she reach out to NAACOS’s leaders, and attempt to find common ground, as the “Pathways For Success” program potentially threatens the expansion of the voluntary MSSP program? It feels as though a lot is hanging in the balance right now, because if the national association representing ACOs has just come out with what is implicitly a denunciation of CMS’s method for calculating ACO progress and success, that is a fairly major “j’accuse” that Administrator Verma and her fellow senior CMS and HHS officials would do well to consider carefully. So the next move on this chessboard is Ms. Verma’s. And who knows what that move might look like?


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Seema Verma’s Big Picture: Tough Love, ACO Acceleration, Interoperability, and Consumer Empowerment?

August 29, 2018
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Will CMS Administrator Seema Verma’s strategy of pushing hard on providers around ACO development and interoperability help to accelerate the shift to value-based healthcare—or will it backfire?

Whatever may come, CMS Administrator Seema Verma is standing steadfast in her “tough-love” stances towards providers when it comes to ACO development. As Healthcare Informatics Associate Editor Heather Landi wrote on Monday, “During a webinar sponsored by the Accountable Care Learning Collaborative Monday morning, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma reiterated the agency’s focus on pushing healthcare providers in accountable care organizations (ACOs) to take on two-sided risk while also addressing CMS’s commitment to try to remove barriers to value-based care.”

Further, Landi wrote, “During the 30-minute webinar sponsored by ACLC, a Salt Lake City-based accountable care collaborative, Verma discussed the sweeping changes that CMS is proposing for the Medicare Shared Savings Program (MSSP), noting that ‘it is time to take the next step.’ On August 9, CMS proposed a rule that included major changes to the existing MSSP ACO program, with the goal to push ACO organizations into two-sided risk models by shortening the duration of one-sided risk model contracts. Referred to as “Pathways to Success,” CMS’ proposal looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track and the ENHANCED track. Verma’s comments on Monday morning emphasized CMS’s firm stance on pushing healthcare providers to take on more risk, as well as CMS’s strategy of giving providers more flexibility—such as waivers around telehealth—as a reward to transitioning to value-based care.”

What’s more, Administrator Verma came to the webinar with data. As Landi reported yesterday, “For the 2016 performance year, the Next Gen ACO Model generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries, according to CMS. Overall, that represents a net reduction of 1.1 percent in Medicare spending within that program, Verma said. The Next Gen ACO model began in January 2016 with an initial cohort of 18 participants. It should be noted that 15 out of the 18 NGACOs had prior Medicare ACO experience.

Verma was not shy about what she thought those metrics meant. “What this really shows is that these Next Gen ACOs are taking the highest levels of risk and they’ve managed to maintain quality while still lowering cost,” Verma said during the webinar. “Much of the savings achieved by the Next Gen ACOs were largely due to reductions in hospital spending and spending in skilled nursing facilities, and that’s very consistent with what we’ve seen with how other two-sided ACOs have achieved savings. We’re excited about this; we think it’s a very strong start.”

Good cop, bad cop?

I’m impossible not to contrast Verma’s statements about the Next Gen ACO program with how CMS characterized the proposal it released just three weeks ago, on August 9. On that date, as Managing Editor Rajiv Leventhal and Associate Editor Heather Landi reported, “The Centers for Medicare & Medicaid Services (CMS) is proposing a new direction for ACOs (accountable care organizations) in the Medicare Shared Savings Program (MSSP), with the goal to push these organizations into two-sided risk models.”

Further, they wrote, “Referred to as ‘Pathways to Success,’ CMS’ proposal, which has been expected for a few months, looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

And, Seema Verma has made numerous comments now in numerous speeches to numerous different healthcare groups, making it very clear that she is becoming impatient with the pace of change in U.S. healthcare, and is determined to do something about it—with the support of Health and Human Services Secretary Alex Azar, her boss.

Indeed, Verma’s first in a series of speeches around interrelated topics of value-based payment and care delivery, patient/consumer empowerment, interoperability, and technology advancement, came as early as the HIMSS Conference in Las Vegas, where, on March 6, she “spoke of the need to move forward to empower patients with their data and information, in remarkably personal terms, recounting an episode in which her husband had collapsed while the two of them were not together, and was rushed to an emergency department, for what turned out to be heart failure,” as I reported at the time.  In the wake of her husband’s health crisis, she experienced the difficulty of accessing her husband’s health record, as an authorized family member. And that experience, she said, particularly animated the development of the MyHealthEData initiative she was unveiling on that date.

“The reality,” Verma said, “is that once the information is freely flowing from patient to provider, the advances in coordinated, value-based care, will be greater than anything we could imagine today she said back in March. Things could have been different for my family if my husband could have authorized me to have his health records on his phone,” she said. “Or if he could have notified me that he was in distress. And better yet, maybe we could have predicted his cardiac arrest days before, if his watch could have tracked his health data, and sending that data to alert his doctor, and possibly prevent what happened. My husband is part of the 1 percent that survives his condition. We shouldn’t have to depend on chance” for that type of outcome, she emphasized.

The big picture: pushing on several levels at once?

It seems clear that Azar and Verma—certainly, with the help of Donald Rucker, M.D., National Coordinator for Health IT—are determined to acceleration the transition of U.S. healthcare providers into value-based healthcare, through a combination of different incentives, including a wide variety of carrots and sticks. And, not to mix too many metaphors here, but it also seems clear that her praise of the progress made by the Next Gen ACO program ACOs is evidently a “good cop” positioning, while she largely framed the relatively modest progress in the MSSP program in a “bad cop” sort of way, essentially telling MSSP ACO leaders that it was time to stop with upside-only risk, and move into two-sided risk as quickly as possible.

Of course, the risks in this kind of approach are significant. Not surprisingly, the National Association of ACOs (NAACOs) heaped scorn on the August 9 “Pathways to Success” proposal, with NAACOS CEO Clif Gaus saying in a statement released that evening, that “The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered healthcare industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.” According to Gaus, “The downside financial risk for patient care would be on top of the significant financial investments ACOs already make, jeopardizing years of effort and investment to improve care coordination and slow cost growth.” He continued, “CMS discusses creating stability for ACOs by moving to five-year agreements, but they are pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices.”

So it seems to me that Azar, Verma, and Rucker, and their colleagues, are in a bit of a challenging place here, because even as the progress has been measurably stronger in the Next Gen ACO program compared with that in the MSSP program, even in Next Gen, it hasn’t been spectacular. Meanwhile, Verma’s attempts to push down harder on the levers of payment and regulation in order to turbocharge ACOs, could very easily backfire, causing more ACOs to leave the MSSP program than to switch to two-sided risk.

So this is a delicate, complicated moment. Will “tough love” and “good cop, bad cop” strategies at HHS and CMS really work? Only time will tell—but this feels like an important moment in the evolution of value-based healthcare, with no clear answers as to how HHS (the Department of Health and Human Services) and CMS officials might be successful in forcing transformational change forward, at a time when the coming U.S. healthcare cost cliff is looming more closely than ever before, just up a head. As Bette Davis said, as Margo Channing, in Joseph L. Mankiewiecz’s 1950 film “All About Eve,” “Fasten your seat belts—it’s going to be a bumpy night!”






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