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Industry Expert: Time for Physician Groups to “Figure Out” the Volume-to-Value Transition

October 10, 2016
by Mark Hagland
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CAPG CEO Don Crane shares his perspectives on the transition from volume to value in MD groups

At a time when issues around taking on risk-based contracts are becoming more complex and challenging for physician groups, some physician organizations are moving ahead to lay the foundations for success in risk-based contracting, all of which require strong health risk assessment processes around broad covered populations, and the creation of care management and population health management strategies for the long haul.

But the pace of preparation for risk is accelerating rapidly now, as both federal healthcare policy mandates and opportunities are pushing physicians and their medical groups forward. Not only has the Affordable Care Act (ACA) mandated participation in its value-based purchasing programs for both physicians and hospitals; it has required hospitals to reduce avoidable readmissions. And now, with the implementation of the MACRA (Medicare Access and CHIP Reauthorization Act) legislation, and the MIPS (Merit-based Payment System) that is a part of MACRA, looming next year, even more pressure is being put on physicians U.S. healthcare system-wide. What’s more, the federal Centers for Medicare & Medicaid Services (CMS) continues to push physicians and hospitals forward, with its expanding mandates for bundled payments, first for total-hip and total-knee replacement surgeries, and more recently for heart attack and CABG (coronary artery bypass graft) care, for both hospitals and physicians delivering care in hospitals.

Meanwhile, the evolution of the Medicare accountable care organization (ACO) programs is proceeding apace, with physician groups and hospitals moving forward not only in the Medicare Shared Savings Program (MSSP) for ACOs, but also the Pioneer ACO Program and the Next-Generation ACO Program. And, of course, hundreds of ACO contracts between private health plans and providers are evolving forward at the same time.

In fact, the medical group world’s pioneers have been busy moving forward into uncharted territory, says Don Crane, president and CEO of CAPG—“the voice of accountable physician groups”—a national association of medical groups involved in accountable care organization (ACO) development and other risk-based contracts. “Among the key learnings,” Crane says, “is that taking on higher levels of risk and moving to professional and not just institutional risk, is being seen as a good thing,” among the leaders of the most innovative medical groups in the U.S. “Doing so improves the quality of care, results in higher quality scores, and higher bonuses. And so moving up in risk is something that has grown in the CAPG membership,” he says.

Healthcare Informatics Editor-in-Chief Mark Hagland interviewed Crane this summer as part of his reporting for the magazine’s September/October cover story on physicians and risk. Below are excerpts from their interview.

How many of your association’s member groups are involved in the MSSP and Pioneer ACO programs right now?

There are three of our member groups in the Pioneer program, and in the MSSP, around 12 or 15.

And ACO development work harmonizes naturally with the kind of work you’re helping your member groups participate in overall, correct?

Yes, that’s right. We’re in the business of advocacy, of course, in Sacramento, California, and in Washington, D.C. We were very active in advocacy work on behalf of physician groups in the run-up to the ACA, and in MACRA now, and in Medicare Advantage, and in all the advanced alternative payment models, and also the ACO programs. And to be clear, we’re very deeply involved in both advocacy and education, around all the alternative payment models and programs. And as we move forward nationally and expand, our efforts are expanding. We’re putting on seminars, webinars, etc., partnering with other entities, to help teach how to deliver coordinated care. We probably had more of our members and sooner, fully wired with their electronic health records [EHRs], than anywhere else in the country.

Don Crane

Getting EHRs implemented early on was absolutely necessary to do the managing of care, the encounter data transmission, but also, coding and getting paid in a world where your patients are all risk-adjusted, and your revenue goes up or down based on their acuity. So we’ve had fully installed EMRs across almost all of our membership for a long time, and are doing a lot of data mining and risk stratification, and outreach, and predictive modeling, and disease registries. The measurement and management of data has been very key.

Data and IT are of paramount importance. This movement from volume to value requires multiple competencies, all indispensable. One of them is IT: you just don’t take responsibility for a population and deliver care across the continuum without IT. You need a record with memory. And interoperable IT becomes critically important, because of the need to measure and manage data. How do you do well in pay-for-performance, which is pretty much baked into all the programs? Ecellent information systems and data analytics are essential for those trying to deliver the Triple Aim [the triple set of goals for improved patient experience, improved health status of populations, and reduction in the cost of care, that has been promoted for years by the Cambridge, Mass.-based Institute for Healthcare Improvement (IHI)].

What have been the key learnings so far emerging for the leaders of your member groups, around taking on risk in contracting?

One of the biggest key learnings has been that taking higher levels of risk and moving to professional, not just institutional, risk, has been seen as a good thing. It improves the quality of care, and results in higher quality scores and higher bonuses. And so moving up in risk is something that has grown in the CAPG membership. And another key learning has been that open networks really are a bear to work with. As we know, the ACO program is essentially an open network, it’s not closed. And the leakage is very high. All have done what they can to create stickiness and patient engagement, and such, but it’s difficult to do that against a backdrop that allows people to migrate everywhere. So the difference between an open and a closed network can’t be overstated. And more broadly, in our work with PPOs, you need to make that PPO a product so that that patient enrolls in it and there’s patient engagement and a psychology of connection. Where you have that, there’s engagement, and where not, it’s difficult.

We’re hearing that it’s been very hard to marry claims and clinical data. What have your member groups’ experiences on that challenge been so far?

There’s a constant discussion here about claims versus encounter or clinical data. You get more done with claims than you used to. Claims drive a lot of the quality and P4P work; it’s not as good as encounter data, but it’s more readily available. So there’s something to be said about ‘mere’ claims data. Particularly in a capitated world, though, encounter becomes all-important. And we are having challenges there. As premiums under the ACA are risk-adjusted from plan to plan, encounter data gets risk-adjusted. And so everything takes more work. So there’s a difference between those two categories of data.

Is it true that the commercial insurers are quicker in getting claims data back to the providers than Medicare is?

They’re both slow, fact. Medicare is slow. Everybody deals with dirty and slow data, but I wouldn’t necessarily say that there’s much of a difference. So I don’t really know. Now in terms of quality of data, you get claims data from CMS. From private plans, you get richer data, with hospital claims and pharmacy. There’s maybe more complete data. But groups and plans have never really shared data anywhere near where to how they should be doing.

What are some of the key things that CIOs and CMIOs need to do right now, with regard to all of this?

I think the short answer is MACRA. We now have a law of the land passed by an overwhelming majority in Congress. And MIPS starts soon. This is really transformative in terms of Medicare. We know that the vast majority of physicians will be in MIPS, and that will require them to manage and marshal data for pay for performance in ways they may never have in the past. They’re going to need to join groups, or buy resources available to IPAs. So I’ll just say, getting ready for MACRA is the biggest thing that CIOs, CEOs, and CMOs need to do. They’ll need to get that done.

The same is in terms of the transformed Stage 3 rule under the meaningful use program, that is now going to be a part of MIPS. So learning what’s in there will be critically important. But then learning how to do it, will be another thing. And were I a physician or group outside California, and I was staring at MIPS/MACRA and realizing that a big portion of my revenue stream might go up or down, I would join CAPG and learn from my peers on what are the best information systems to have, who are the consultants you want or need, how you incentivize all your physicians. Because in four months and about 5 days, your data is going to be measured. And if you’re in the bottom half of MIPS because you don’t have an EHR, you’re in trouble, buddy. You’re going to get a 4-percent penalty; and your provider competitor provider across the street is going to get a 9-percent bonus. And by years two and three, the competitive advantage that this will create, is going to be huge. The strong will get stronger and will the weak will be disadvantaged.

Overall, what are the couple few most valuable things your members have learned in the last couple of years?

Its’ been important to learn in the Medicare ACO program that the patients do not feel connected to groups, that they ‘leak out.’ And we’re talking about superior medical groups. All of a sudden, when 40 percent of their patients are going out of network to physicians with no connection to your network, you have no control over utilization and quality, so the costs go through the roof, you exceed your benchmark, and you lose network. So open networks are a huge problem for population health. We have for example right now our own proposal we’ve made called the third option—a global pay bill, H.R. 4581, pending in the U.S. House of Representatives. It describes a directly contracted model between CMS and physician groups. Our iteration creates a kind of point-of-service plan, with greater cost deductibles and co-payments if they go out of network. That’s in proposed legislation now. They’re talking about a five-year pilot. So that’s an important learning.

Another generalized important learning is as follows: the world is paying physicians less. There are no real increases in Medicare anymore; in Medicaid, which is MediCal here in California, the cuts are never being restored as reimbursement. So the option that remains is organized systems in population health being prepaid or budget-based. And that doesn’t just produce the Triple Aim. It produces higher satisfaction for physicians; they like their jobs better. And if you look at the tea leaves and see that Healthcare Partners was sold for $4.4 billion and such, there’s good money to be made in this method of payment. I mean, you can lose your shirt; physicians and physician groups did years ago in California; but physicians in California are learning. So don’t fear this movement from volume to value; instead, figure it out and do well in it.




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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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