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At the Health IT Summit-Philadelphia, a Frank Discussion of the Challenges around MACRA

August 10, 2017
by Mark Hagland
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At the Health IT Summit in Philadelphia, a bracingly candid discussion of the challenges around MACRA

At the Health IT Summit in Philadelphia, sponsored by Healthcare Informatics and being held at the Warwick Hotel in central Philadelphia, a panel of industry leaders engaged in a bracingly candid discussion of the challenges that providers are facing under the requirements of the MACRA (Medicare Access and CHIP Reauthorization Act) law, including its MIPS (Merit-based Incentive Payment System) and APM (advanced payment model) components.

The panel discussion, entitled “MACRA and Bundled Payments Update—Staying Compliant and Keeping Aware of Policy Changes Affecting Your Organization,” was led by Mark Stevens of ARRAHealth Consulting, Inc. (Philadelphia). Steven was joined by Katherine Schneider, CEO of the Delaware Valley Accountable Care Organization (DVACO-Philadelphia), Anne Docimo, M.D., CMO of Jefferson Health System (Philadelphia), and Sriram (Sri) Bharadwaj, chief information security officer and director, UC Irvine Health (Irvine, Calif.).

The panelists plunged headlong into a discussion of the complexities and challenges of the MACRA law, including physician engagement, measurement issues, and overarching issues around policy and regulatory attention overload.

To begin with, Stevens asked Schneider to provide the audience with a very brief overview of where things stand with MACRA right now, including around clinician understanding of the law. “I’ve spent the last two years telling physicians that this is the biggest change in our lifetimes since Medicare, to physician practice,” Schneider noted. “And I’ve usually been met with blank stares. Remember, this law was passed two years ago, with broad bipartisan support; yet as recently as last fall, 50 percent of physicians couldn’t even tell you what it is; and only a small percentage could explain it. And, working in an ACO, particularly with small, independent practices, they cannot get their heads out of water long enough to study up on this. And there’s a lot of burnout, and people are overwhelmed.”

As a result, Schneider noted, at Delaware Valley ACO, “We have a team of practice support people to help our physicians develop patient-centered medical homes, and to do what they need to do in terms of what has been meaningful use and is now MACRA.” Going on to describe the choices facing providers, she noted that, “Potentially, there are large advantages in moving into the APM programs” under MACRA, “but there is substantial downside risk” in the regular APM track and in the advanced APM track, under the law. “If physicians take one of those alternatives, they don’t have to do the MIPS reporting. They don’t get a fee schedule adjustment at all, but a 5-percent bonus in their fee schedule every year. So potentially, there are large advantages, but taking risk is no small risk involved.” Meanwhile, on a very basic level, she noted, “Especially in terms of the independent practices, the end of meaningful use made headlines everywhere, so we had to counter the soundbite that ‘meaningful use was going away,’” even though in fact, the requirements under meaningful use simply became subsumed into requirements under MACRA/MIPS.

The reality, Schneider emphasized, is that the requirements under the MACRA program will be very demanding for physicians. “I don’t see how a small practice can achieve any of this, unless they’re tied to an ACO [accountable care organization] or some type of organization. And the vendors can help with some of it; but it is a heavy lift,” she said. “And what’s changed over time is this: MIPS is winners-pay-losers [system]. There’s a 4-percent penalty that funds a 4-percent bonus. So that’s an 8-percent spread, with a real potential impact. But in this first year, they’ve made it incredibly easy to avoid the penalty. Basically, if a practice reports anything, they will avoid the penalty. But the upside potential bonus has become much smaller. So now, suddenly, a lot of folks are looking at that 5 percent for APM participation, and saying, perhaps that might be a better deal?”

“Managing downside risk is a significant undertaking,” Dr. Docimo confirmed. “Those of you from Philadelphia might realize that the Jefferson of now is much different from the Jefferson of three years ago; we will have gone from a $1.8 billion delivery system to a $5 billion delivery system in just three years, through acquisition. And Jefferson has a clinically integrated network that’s a member of the DVACO. We have 1,300 physicians in our CIN, and about 700 are employed. There are a lot of independent physicians who have joined our network to be a part of the DVACO.” Importantly, with regard to fulfilling the requirements under the MACRA law, she said, “If you’re a practice of one, two, three, four, five physicians, the amount of time and energy you’d have to spend on this would be enormous. And so, the consequence of MACRA is that the people who did realize what was involved, looked to invest. And for those who decide they want to go at risk, they’re not going to do so as an independent practice, so it will be an interesting journey over the next five years.”

Too many reporting systems?

Looking broadly at some of the policy crosscurrents affecting providers in different states, Bharadwaj noted that “It’s interesting what’s happening here in Massachusetts versus in California. We went through PRIME,” he said, referring to the Public Hospital Redesign & Incentives Program. “Now we’re looking at the next level of DSRIP”—the Delivery System Reform Incentive Payment program. “The confusion,” he went on to say, “is that you’ve got DISRIP, MIPS, PQRS [the Physician Quality Reporting System], and the other reporting mechanisms we do, such as immunization tracking, etc. It’s a nightmare. If you ask the physician what he’s doing, he doesn’t know. And he hates the EMR. So my job primarily is to make sure that the EMR sucks less!” he said to audience chuckles.

“So we look at how to help the physicians manage this quantity of stuff happening out there. So I decided that we have to change this in Washington,” Bharadwaj said, referring to his participation in a provider advocacy group around MACRA. I can’t be the lone guy out in California trying to change this. So I threw my name into the hat to sit on the Public Policy Committee at HIMSS [the Chicago-based Healthcare Information & Management Systems Society], and got on. There was the issue of meaningful use reporting, with the requirement of a yearlong reporting period. And we said, you just cannot do this, and the reporting period changed to 90 days. So I think we as providers have to speak out,” he said, and urged other patient care organization leaders to become involved in advocacy work as the spirit moved them.

Meanwhile, Bharadwaj noted, the perspective of practicing physicians on MACRA is inevitably different from that of health system executives. “And when I look at this from the physician practice level, it’s a totally different situation. And it’s taking time for us to figure out what it all means. And everyone has this idea that if there’s a new rule out there, technology should be able to fix it. I can provide fields for them, but already the physicians are talking about ‘death by clicking.’ From a technology platform perspective, I think it’s more desirable to have something to help physicians communicate better with patients, because that’s the crux of what we’re trying to achieve—improving care and improving access to care. If the physicians are not given easy-to-use tools—already, they struggle with their EMRs. We have a program called Bring the Physicians Home for Dinner”—trying to improve the physician documentation environment so that physicians don’t end up spending endless hours completing their charting every workday evening.

“And it’s not your fault, as an IT person, about all the clicking,” Docimo told Bharadwaj. “You have to collect all the data being required to be collected. And there’s only so far we’ll get in terms of using IT. But I am hoping that somewhere there exists an electronic data warehouse that doesn’t end up requiring patients to fill out forms many times.”

Clinician engagement—when will it accelerate?

Later, the discussion shifted towards the question of how physicians and other clinicians could be engaged positively around MACRA’s requirements. “I think that as we get more towards risk, there will be a lot more skin in the game,” Schneider said. Right now, she said, “It is tough to make the argument that we’ll get a 2-percent bump as an organization, after doing all this work, and yet it might not mean anything for the physicians themselves.” On a broad level, she said, a key policy imperative will be moving towards reducing the number of outcomes measurement regimens that physicians have to participate in, across the healthcare industry. “We need to try to standardize towards a single set of measures; you have to do all these things for MIPS, and for Blue Cross and Aetna. And things are measured differently; and that’s what drives the doctors crazy. So having a common regulatory set would be great. Meanwhile,” she added, “there’s something about MIPS that’s similar to what happened under PQRS—at this stage, physicians can pick their own quality measures; but that game will end pretty soon, I suspect, because CMS [the Centers for Medicare and Medicaid Services] and MedPAC [the Medicare Payment Advisory Commission] are already onto the game; because which measures will providers choose? The easiest ones to fulfill.”

“Sri, you talked in your initial remarks about people needing to be engaged in process,” Stevens said. “And so far, we’ve established on this panel that EMRs suck. And MACRA sucks, too. How are we going to get MACRA to suck less? Comments are due to CMS by August 23, so this is a very timely discussion.”

“There are things that policy can drive, including better decision-making,” Bharadwaj said. “I sincerely believe that it can. MACRA as a program is great, from a vision perspective and policy perspective, at a high level. It’s definitely going to change the way we think about how we manage risk, including about how we improve care on a daily level. The concern is that it’s changed so much in such a short time. And that’s causing a level of concern among physicians. Sometimes, they just throw their hands up in the air, not wanting to do any of this stuff. Interestingly, I heard that from a health system CMO recently. He said, the work we need to do in terms of all of this reporting—collecting the data, making sure it’s correct, etc.—the entire process is too tedious. And the amount of effort we expend collecting the data and reporting on it, is not valuable. I am really concerned about the small physician practices. The small physician groups that struggle now—we need to help them. Making workflow changes, and collecting measures and improving performance based on measures, is a very big challenge. So yes, change is fine, but what are we trying to change? And are we throwing more into a system that’s already broken? That’s the question.”

“In terms of making MACRA suck less,” Docimo responded, “as Katherine pointed out, you can go down the APM paths, or MIPS. For Jefferson Health, honestly, starting down this path of ACO work, that practice transformation work, has been meaningful. And we get the credit for the quality and collecting data; and you can come up with methods to make it suck less. The employed physicians in an academic medical center assume that it’s someone else’s job to figure this out. And there will be one or two or five physicians, usually internists, who plunge into this, and everyone else just says, tell me what I have to do. As Katherine notes, among community physicians, there’s some level of engagement. The thing is, you can’t just go at risk without knowing who your patients are; you have to do some fundamental work first. So this could be like the school of getting ready, in terms of taking the fundamental steps you need to take. And if we can complete those steps, we can flip to the other side, on APMs. So the concept is very good. So I would work on individual practice levels to make those decisions.

“I’m the chair of the policy committee for the National Association of ACOs,” Schneider noted. ‘And if you’re not at the table, you’re lunch on the table. And I think the reason that MACRA sucks so much is that this is a brand-new thing, and we’re in an intense period of change in healthcare, and it’s very challenging. And the only person who likes change is a wet baby. And so who likes change? Change is hard. Transition is hard, and people are uncomfortable with it. But we can’t maintain the status quo, either. And it feels hard because I’m not sure that it feels like work that matters, for people. So that’s our motto at DVACO, work that matters. And there are a lot of physicians who are extremely skeptical that any of this will make any difference. And frankly, it was ludicrously watered down to help physicians to avoid penalties. So it sucks for those who don’t want to do anything, but it also sucks for those like us who have made major investments, to see how low the penalties are for not acting. But this is unquestionably, 100 percent, a move away from fee-for-service, and it has bipartisan support” on Capitol Hill.

“What are some of the successes you’ve all had so far?” Stevens asked. “Readmissions is one area,” Bharadwaj noted. “We were tracking readmissions, but weren’t tracking readmissions in the way that we should have, to compensate for risk. MACRA was one factor. And there were things we could have done in the transition to home—simply things, like making sure the patient understands what’s going on with his meds. And we pulled a program together, and it brought the physicians, clinicians, IT, and administration together, to really understand a little bit more about what it is we can do for the patient. So we starting collecting measures well ahead of MACRA. We realized there were things we could be doing. And it benefited us a lot in terms of improving care for the patients. And the patients started talking to us more, which was actually a phenomenal benefit.”

“Remember, we’re in August 2017, and only eight months in to the first reporting year of MACRA; it’s really new,” Schneider emphasized. “We won’t really have money impacts for another two years. But for us, we’ve seen this get the attention of a lot of independent physicians in our community, particularly the specialists. We’ve been a very primary care-centric organization, a lot of the primary care physicians have been very engaged in population health work, but the specialists not at all. And now the specialists are suddenly becoming very interested and getting engaged. And the fact that when you’re in an ACO and you’re all tied together under a single grade for MIPS, that’s incentivizing.”

“I agree,” Docimo said. “We’ve seen specialists coming to join the ACO with the reason of MACRA, to become employed. And so I think just the fact that we’re asking specialists to take a look at their process outcomes, etc., is a good thing. So what are the outcomes that would give me a higher grade? And if we can incent that kind of change, that’s a win.”



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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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