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Michael McCoy, M.D. Shares His Perspectives on the Current Moment in Healthcare IT

March 13, 2018
by Mark Hagland
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Michael McCoy, M.D. shares his perspectives on the policy, industry, and technological cross-currents influencing the shift from volume to value in healthcare right now

Michael McCoy, M.D. is best known as` the Chief Health Information Officer in the Office of the National Coordinator for Health IT, a role in which he served from January 2015 through January 2016. Meanwhile, Dr. McCoy, who spent 25 years in obstetrics and gynecology practice, has played a number of roles in the healthcare IT world, including as a senior executive at the former Eclipsys Corporation, CMIO at DigiChart, and CMIO, between 2010 and 2013, at the Catholic Health East health system, now a part of the Trinity Health system.

Dr. McCoy currently runs his own consulting firm, Physician Technology Services, and is board co-chair of IHE International (Integrating the Healthcare Enterprise), a not-for-profit initiative by healthcare professionals and industry to improve data- and information-sharing processes in healthcare, via the coordinated use of established standards, including DICOM and HL7.

Dr. McCoy, who is based in Lawrenceville, Georgia, spoke with Healthcare Informatics Editor-in-Chief Mark Hagland, following the conclusion of the annual HIMSS Conference, which took place last week at the Sands Convention Center in Las Vegas. Below are excerpts from that interview.

We were both at HIMSS18, and were able to converse at the CMIO Roundtable. Looking back at HIMSS18, as well as considering all the recent conversations you’ve been having with fellow healthcare IT leaders, how does this moment in healthcare and healthcare IT look to you, broadly speaking?

On the political side, the policymakers [in the current administration] are trying to wind back some of the policies and regulations that have been put in place [including via the MIPS/MACRA law—the Merit-based Payment System, and the Medicare Access and CHIP Reauthorization Act of 2015]. The challenge will be in actually making that happen. Many of those things are baked into law, and you can’t just easily wave your hands and make the law go away. Given that there has been widespread support for many of the elements that have gone into recent lawmaking… it’s difficult to imagine that all of the desired actions would take place.

Michael McCoy, M.D.

At the HIMSS Conference, the federal healthcare officials who spoke, talked fairly extensively about deregulation, either explicitly or implicitly. Do you have any thoughts on that?

Yes; some of those comments were specifically related to payment reform—MIPS/MACRA—and also to the issue of physician burden. Considering that many of the requirements embedded in MIPS/MACRA were written into law [as passed by Congress], it would take another law to undo them, unless you go the route of not ticketing people for slightly speeding—that concept—that idea that you can perhaps allow for [the regulatory path to softening certain requirements]. If the goal is to make sure the public gets something for the dollars spent on health IT, both in terms of hospitals and physicians—and healthcare IT spending—it’s difficult to do some hand-waving stuff and make that [the regulatory requirements embedded in laws like MACRA] go away. So there’s a gap between intentions and the ability to actually make those intentions happen. So that’s one of the concerns. There are similar concerns around balance for things like TEFCA [the federal Trusted Exchange Framework].

You’ve seen the comments from various trade groups and professional associations. I think the concept is good; the problem is in the execution, and how much can get done without pointed regulation. So it’s that balance.

I noted in my HIMSS18 reporting that that CMS Administrator Seema Verma, in her speech last Tuesday, called for empowering patients by giving them control over their data. Still, this administration remains at least nominally committed to repealing the Affordable Care Act, which would cause some loss of health insurance coverage. Can sufficient patient empowerment occur in the absence of health insurance coverage, or might that be an uphill proposition?

With regard to that, I’ll just say that there’s a major disconnect between words and actions there; I’ll just leave it like that.

Meanwhile, what about federal healthcare officials’ potential interventionism around EHR and other healthcare IT vendors? Administrator Verma and HHS Secretary Alex Azar both said last week that they want the free market to lead in helping move us forward on interoperability and patient empowerment. To what extent, though, might a more interventionist stance be necessary on their part?

This is my personal viewpoint, of course; as you may know, I am the co-chair of board of IHE International, the standards development organization, endorsed by the European Commission for a number of interoperability elements. There comes a time when you have to be more forceful. As a matter of policy, the U.S. government does not endorse specific standards. But the development of standards can advance things. Thus far, we have some alignment of incentives in the healthcare IT space, but not complete alignment; there’s still not a good reason yet for patients to move freely between and among different hospitals, for example.

And that alignment will require much more of a policy-driven, rather than a free-market-driven, exercise. So I would agree that it’s unlikely to happen, absent explicit policy moves. I was at a meeting in Washington, D.C., where interoperability through procurement contracting was discussed, and David Shulkin was talking about how the VA [Veterans Administration health system] might leverage its power with Cerner and others. So there’s some opportunity to begin helping physicians to have an interoperable solution, as part of the participation requirement. That in turn would mean they would have to go to their local HER vendor and make sure that’s going to happen. …

So we will need some level of interventionism from the federal agencies, to compel interoperability forward, then, correct?

I would agree with that. Relying on the good intentions of hospitals and doctors to move data forward, is somewhat utopian. Without penalties—such as those coming out of ACO contracts—that’s the reality that will make things happen. And that’s not yet there.

You agree that federal agencies will have to tell vendors what to do around interoperability?

Right, that will give them the ‘air cover’ they need to make changes. Because the vendors won’t do things unless their customers demand it. And the customers won’t demand it until it’s mandated. As a forcing function, regulation can help. I can agree with you partly on the CAFÉ standards—GM wouldn’t have done it. But that was also an example of the federal government pacing some of the wrong things. Regulators aren’t the true engineers in car companies and who can figure out what you can get. To get 40 MPH, we’d have to be driving tiny cars with different engines than consumers want. And also, rather than looking at fuel economy per vehicle, how about fuel economy per passenger? If you’re looking at a seven-seating automobile that mostly carries one person, are you really gaining there? So over-regulation can be just as burdensome as under-regulation. So it comes back to the lack of alignment of incentives on the part of hospitals and physicians. I mean, vendors aren’t deliberately withholding capabilities; they would do it if the customers demanded it.

Moving forward on health IT, what have your conversations been like recently with CIOs, CMIOs, and other healthcare IT leaders?

It’s much more now about optimizing the deployment of systems already in place—whether it’s replacing systems or enhancing them. It depends on the size of the organization. Personally, one of my friends who’s a rheumatologist is looking at replacing her EHR, and she’s very challenged by the expense and the difficult of moving from Vendor X to Vendor Y; it’s a nightmare. And for big patient care organizations, it’s a tweaking kind of thing? Do you re-implement, as opposed to tweaking it? There are all kinds of approaches that have to be considered. Many organizations were penny-wise and pound-foolish, and were just looking at getting the MU dollars.

Given everything going on right now, what should CIOs and CMIOs be focusing on right now?

I would say the first focus should be on cybersecurity, because if your situation [the overall IT infrastructure of your organization] ends up bricked up, nothing else matters. So that should be at the top of the list. And that’s a challenging front, because there are so many ways that one can be taken down, unfortunately; but insiders still doing the wrong thing—insider exposure is still the biggest. And there are organizations that are getting daily now; it’s just a fact of life. So if you don’t manage that properly, with the appropriate business continuity, etc., you’re screwed. So that would be number one.

I think looking at productivity, and how you get clinicians to the right level of resumption of activity, is the next thing. Whether that means reimagining the workflows you have, or if the vendors can provide better updates or UIs to allow that, that would be next. And the third priority would be making sure you’ve got a better understanding of where ewe think we’re going, from a payment perspective. I’m not sure whether anyone can fully predict that—whether ACA is killed or not, or reimagined, or whatever. Healthcare spending can’t continue forward as it has; and Congress has indicated they want a cap on HC spending, and to get more value for what’s spent. And whether that involves a free-market solution, or Medicare for all, or whatever it is, is still to be determined. And people are still getting paid under the old system. There’s a challenge for hospitals to stay alive, during this gradual transition from volume to value.

It's what so many have described as the one-foot-on-the-boat, one-foot-on-the-dock problem, correct?

Yes, with the one foot on a banana peel on the dock! And any readmission within 30 days is a problem. And there are challenges because of the mix of incentives facing providers during this long transition to a value-based system. One of the most entertaining moments for me at the HIMSS Conference was in the CMIO Roundtable, where there was some of the usual EHR-bashing coming from some people, but the gentleman from KLAS indicated that not everybody hates EHRs. The reality is that EHRs aren’t the problem; they’re part of what people can vent at.

The level of abilities needed by CIOs and CMIOs—to be true system leaders—is really amazing now. Many industry observers have talked about the need for “CIOs 2.0,” “CMIOs 2.0,” etc.—healthcare IT leaders who are at entirely new levels of professional development—to help lead their organizations right now.

You’ve hit the nail on the head there; CIOs and CMIOs have been promoted up through the trenches. And the c-suite in general does not realize the true leadership requirements they’re facing, for individuals with those titles. And we generally talk about CMIOs and CNIOs, rather than CHIOs. But when you look at the functions and roles of the CMIOs and CNIOs—focused on their specific disciplines—well, the reality is that we need to work as a team, strategically as well as operationally. Some of the organizations that are just getting going, may need someone in the trenches.

But more advanced organizations need more advanced leaders, focused on moving into population health and analytics, and that’s strategic, that’s not just slapping your colleagues on the back, saying, you’re doing a great job of CPOE, or using your screens. It’s things like transforming care delivery and improving outcomes, and that’s a strategic challenge. And frankly, a lot of the clinical leadership isn’t standing up to the executive leadership and saying, this is an important set of challenges we need. It’s interesting, we have the new clinical engagement officer and patient experience officer and this and that, but they haven’t quite figured out yet what it is that people are really doing. And we talk about mobile technology; well, how much of what we do isn’t mobile anymore these days?

So the reality is that when we talk about mobile health, telehealth, all those things, it’s all just health, really. So that’s part of the long-term strategy; as we learn and adapt to new ways of doing things, I think we are going to have to own up to the fact that computers are everywhere, and the Internet of things and the Internet of threats, they’re all changing everything.

After the experience of the HIMSS Conference this year, would you say overall that you’re more optimistic about healthcare IT leaders moving forward to do what needs to be done? Less optimistic? About the same as before?

From an industry perspective, about the same. It takes time for things to advance; I think things will happen. My concerns are more on the policy side and how that impacts everything else. I think it will take a few years to sort out what will happen in the policy area, and how that will affect everything. From the perspective of a large patient care organization, how do you plan for the future when you don’t know exactly what it will be? That is an important question that will be difficult for many to answer right now.




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Healthcare Groups to CMS: ACOs Need More Time in One-Sided Risk Models

October 17, 2018
by Rajiv Leventhal, Managing Editor
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A new survey from NAACOS also reveals that many ACOs would likely have not entered the MSSP under revised policies laid out in a proposed rule by CMS

Healthcare associations have written to the Centers for Medicare & Medicaid Services (CMS), urging the agency to reconsider its proposed regulation that would push accountable care organizations (ACOs) more quickly into two-sided risk models.

About two months ago, CMS dropped a rule that proposed sweeping changes to the existing Medicare Shared Savings Program (MSSP), by far the most popular federal ACO model with more than 560 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs 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. Indeed, when ACOs are in a one-sided risk model, they do not share losses with the government when they overspend past their benchmarks, but they do share in the gains.

Specifically, in the rule, 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 (two, three-year agreements) to two years total. 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.

What’s more, the 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, 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.

ACOs Need More Time, Stakeholders Say

Now, in public comments sent to CMS, stakeholders are officially making their stances known. Yesterday, groups such as Premier, Inc., the National Association of ACOs (NAACOS), and the American Medical Group Association (AMGA) wrote to the federal agency, sharing the consensus opinion that ACOs should be afforded more time in one-sided risk models before they are required to take on downside risk.

NAACOS, an association comprised of more than 360 ACOs across the U.S., wrote to CMS that ACOs entering the program should be able to remain in a shared savings-only model for four years with an additional fifth year available for those that demonstrate superior performance. The association pointed to data that shows that of the 142 ACOs that earned shared savings payments in 2017, 36 percent had losses in one of their first two years of the program, illustrating the need to allow ACOs adequate time to prepare for risk.

To this same point, Premier recommended in its comments to allow at least three years in an upside-only model for new ACOs entering the MSSP. And AMGA similarly wrote that CMS should allow ACOs to have the option to remain in an upside-only track for three years, rather than the two years that CMS has proposed.

Additionally, all three groups are also urging CMS to reverse its proposal on cutting potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs. NAACOS specifically believes in “reversing the agency’s proposal to reduce the shared savings rate from 50 to 25 percent for ACOs in shared savings only or low risk models. Instead, NAACOS recommends that shared savings rates should be 50 percent for Basic Levels A and B, 55 percent for Basic Levels C and D, and 60 percent for Basic Level E.”

Similarly, AMGA wrote that “CMS’ proposal of a 25 percent shared savings rate for Basic Levels A and B further weakens what are already nominal financial incentives. The shared savings rate should be no less than 50 percent for upside-only ACOs.  Upside only low revenue ACOs should receive higher earned shared savings, for example, 75 percent or 80 percent.” Premier noted much of the same in its comments, attesting that the shared savings rate should be increased to 50 percent.

Will ACOs Stay in the MSSP?

At the core of the debate around the new proposal is if one-sided risk MSSP ACOs are saving the government enough money to warrant more time in these upside-only risk arrangements. CMS Administrator Seema Verma has been steadfast in her comments that these ACOs are not saving Medicare any money. In fact, she said in a press call following the proposed rule’s release in August that “[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended.” Verma also said she believes that the proposed changes outlined in this rule will result in $2.24 billion in savings to Medicare program over next 10 years.

On the other side of the savings argument are NAACOS and others, who attest that one-sided risk ACOs are saving Medicare significant money, to the tune of $1.84 billion in gross savings over the span of 2013 to 2015. To this point, some healthcare stakeholders fear that the CMS proposals, if finalized, will deter ACOs from staying in the MSSP, as well as prospective new ones from joining. But the federal agency, to this point, seems to be fine with these ACOs leaving the MSSP if they are unwilling to take on more risk.

A new poll from NAACOS, in conjunction with its comments to CMS, has revealed that 60 percent of ACOs who were surveyed oppose the proposed rule, while 27 percent are in favor. For the research, 127 current MSSP ACOs’ responses were included.

The NAACOs survey found that the four biggest challenges in the proposed rule, as noted by the surveyed ACOs, were: reducing the shared savings rates for one-sided risk ACOs; requiring more risk sooner for “high revenue ACOs,” which are typically hospital ACOs; shortening the shared savings-only timeframe for all new and some existing ACOs; and the proposed risk adjustment cap of plus or minus 3 percent, applied across the five-year ACO contract agreement period.

According to the research, after weighing the collective proposals in the rule, almost half of ACOs reported they are likely to continue participating in MSSP. While more ACO respondents report being likely to continue, more than a third report they are unlikely to continue.

What’s perhaps even more concerning to NAACOS is that a high number of ACOs, 60 percent, reported they would be unlikely to begin the MSSP if their ACO was not already participating and if they were evaluating the program under the revised policies.       

ACO contract agreements typically renew at the start of the calendar year, so it would be expected that CMS, after weighing the comments, would finalize the rule by January.

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CMS Announces 1,300 Participants for New BPCI Advanced Initiative

October 10, 2018
by Rajiv Leventhal, Managing Editor
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The new bundled payment initiative is voluntary, will qualify as an A-APM, and builds on the original BPCI model that ended in September. However, CMS has admitted that the first initiative did lose Medicare money

The Centers for Medicare & Medicaid Services (CMS) has announced that nearly 1,300 hospitals and physician group practices have signed agreements with the federal agency to participate in the Administration’s Bundled Payments for Care Improvement—Advanced (BPCI Advanced) model.

The participating entities will receive bundled payments for certain episodes of care as an alternative to fee-for-service payments that reward only the volume of care delivered.

According to CMS, the model participants include 832 acute care hospitals and 715 physician group practices—a total of 1,547 Medicare providers and suppliers, located in 49 states plus Washington, D.C. and Puerto Rico.  Of note, BPCI Advanced qualifies as an Advanced Alternative Payment Model (Advanced APM) under MACRA, so participating providers can be exempted from the reporting requirements associated with the Merit-Based Incentive Payment System (MIPS).

BPCI Advanced will initially include 32 bundled clinical episodes—29 inpatient and three outpatient.  Currently, the top three clinical episodes selected by participants are: major joint replacement of the lower extremity, congestive heart failure, and sepsis, according to CMS.

Back in January, CMS announced the launch of the voluntary BPCI Advanced model, noting that it “builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value.” CMS Administrator Seema Verma stated yesterday in the announcement of the model’s participants that “To accelerate the value-based transformation of America’s healthcare system, we must offer a range of new payment models so providers can choose the approach that works best for them.”

Verma added, “The Bundled Payments for Care Improvement – Advanced model was the Trump Administration’s first Advanced Alternative Payment Model, and today we are proud to announce robust participation.  We look forward to launching additional models that will provide an off-ramp to the inefficient fee-for-service system and improve quality and reduce costs for our beneficiaries.”

Last year, CMS officially finalized a rule that cancelled mandatory hip fracture and cardiac bundled payment models. Verma has said in the past that she doesn’t think bundled payment models should be mandatory, a sentiment that some industry experts wholeheartedly agree with.

In contrast to the traditional fee-for-service payment system, in this new episode payment model, participants can earn an additional payment if all expenditures for a beneficiary’s episode of care are less than a spending target, which factors in measures of quality. Conversely, if the expenditures exceed the target price, the participant must repay money to Medicare.

How Did BPCI Fare?

The original BPCI initiative ended on September 30, and BPCI Advanced picks up where it left off, starting on October 1, and running through the end of 2023. This prior initiative included three models that tested whether linking payments for all providers that furnish Medicare-covered items and services during an episode of care related to an inpatient hospitalization can reduce Medicare expenditures while maintaining or improving quality of care. Model 2 episodes begin with a hospital admission and extend for up to 90 days; Model 3 episodes begin with the initiation of post-acute care following a hospital admission and extend for up to 90 days; and Model 4 episodes begin with a hospital admission and continue for 30 days.

According to CMS, the evaluation from these models revealed that BPCI Models 2 and 3 reduced Medicare fee-for-service payments for the majority of clinical episodes evaluated while maintaining the quality of care for Medicare beneficiaries. It also should be noted that spanning over the two years that participants were able to join the risk-bearing phase of the initiative, 22 percent of Model 2 participants, 33 percent of Model 3, and 78 percent of Model 4 participants ended up withdrawing. Most BPCI participants were in eithers Model 2 or 3; in 2017, just five hospitals belonged in Model 4, in which Medicare makes a prospective payment for the episode.

CMS noted in its report of the BPCI initiative, “Despite these encouraging results, Medicare experienced net losses under BPCI after taking into account reconciliation payments to participants.  Technical implementation issues, including the specification of appropriate target prices, contributed to these net losses. We are optimistic that Medicare will achieve net savings under a new episode- based Advanced Alternative Payment Model, BPCI Advanced, because it addresses the challenges BPCI experienced.”

To this point, a report from the Lewin Group, a healthcare consulting firm, found that in the most popular track of BPCI, Model 2, Medicare lost more than $200 million ($268 per episode) from 2013 to 2016. In Model 3, Medicare lost slightly more than $85 million ($921 per episode) over that same time period, according to the report.

Moving toward BPCI Advanced, the federal agency points out some key differences between the original model and the new one, such as:

  • BPCI Advanced offers bundled payments for additional clinical episodes beyond those that were included in BPCI, including, for the first time, outpatient episodes.
  • BPCI Advanced provides participants with preliminary target prices before the start of each model year to allow for more effective planning. The target prices are the amount CMS will pay for episodes of care under the model.
  • BPCI Advanced qualifies as an Advanced APM and is eligible to earn the 5-percent bonus in the Quality Payment Program.

Keely Macmillan, the general manager of BPCI Advanced for Archway Health, a Massachusetts-based company that helps providers get started in bundled payment programs, says she is happy with the level of participation so far. She did add that one thing her company noticed immediately, regarding the participant list, was the popularity of joint replacements and cardiac bundles. “Research coming out in the last few months has proven that these bundles do particularly well, and we’re excited to help our participants and see others industrywide continue to drive improvement in the new program,” she says.

Meanwhile, Clay Richards, president and CEO of naviHealth, a post-acute care management company based in Tennessee, and which is a BPCI convener, notes that its hospital and health system partners saved more than 8 percent, or approximately $2,000 per episode, which translates to more than $83 million in the BPCI initiative. “With the increase in BPCI Advanced participation, we expect the impact to be even greater,” says Richards.

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On the Road to Risk, Summit Medical Group is Driving in the Fast Lane

October 2, 2018
by Rajiv Leventhal, Managing Editor
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Dr, Jeffrey Le Benger, M.D., CEO of Summit Health Management and Summit Medical Group, discusses how his organization is succeeding in a mostly value-based care environment

At Summit Medical Group (SMG), the oldest independent multispecialty physician group in New Jersey, Jeffrey Le Benger, M.D., has been providing high-level leadership for 16 years. With more than 800 providers at 70 locations, multiple comprehensive ambulatory care campuses and a strategic partnership with MD Anderson Cancer Center, SMG handles more than 1.5 million patient visits annually. Its officials believe that its performance is marked by a sustained enhancement to clinical quality and patient outcomes, ongoing participation in emerging value-based reimbursement initiatives and meaningful cost containment.

Indeed, after devising and refining a highly effective practice management and patient care model at SMG and extensively studying the condition of mid-range and large-scale independent physician groups nationwide, Dr. Le Benger spearheaded the formation of Summit Health Management (SHM) in 2014 to share SMG’s formula for success via strategic partnerships and customized managed services contracts. Now, Le Benger serves as chairman of the board and CEO of Summit Health Management and Summit Medical Group.

SHM is now poised to become a national organization, with the aim to positively impact the delivery of patient care across the country, as Le Benger envisioned, with the 2017 establishment of a major agreement with the Bend Memorial Clinic in Oregon and an alliance with Arizona Primary Care Physicians (APC) that resulted in the formation of Summit Medical Group Arizona. 

In a recent interview with Healthcare Informatics, Le Benger outlined the progress and evolution of his organization and how it is continuing to plunge ahead into the world of risk and value-based care. Below are excerpts from that discussion.

How is your organization progressing when it comes to taking on risk for your patients?

We are at a point in which 65 percent of our patient base is based within risk-based contracting, and it’s a continuum, so you have fee-for-service and then percent to premium is on the other side. And then there are all aspects of risk in in between; there is pay-to-play, shared savings, and full risk. Most of our contracts that have upside and downside risk have a shared savings component. But as soon as we increase the size of our attribution and can mitigate our risk more evenly, then we will look to go to percent to premium as a group.

Jeffrey Le Benger, M.D.

Can you detail the ACO (accountable care organization) work that you’re involved in?

We are a part of the Trinity Health ACO [which serves patients in Illinois, Michigan, New Jersey and Ohio], and are in the Centers for Medicare & Medicaid Services (CMS)’ Next Generation ACO Model. Over the past two years we have received shared savings and we do take on upside and downside risk. The issue with Next Gen is that you are benchmarked against yourself [rather than against outside ACOs], so you have to improve [internally] every year. In Medicare Advantage, you are benchmarked against the community that you have the product within. So the house always wins. The government knows that shared savings pushes the envelope, but the cost to create that savings far outweighs the savings they get in a trend demonstration.

What are your thoughts on the recent CMS proposed rule for ACOs? Do you think it’s too aggressive or fair?

We are a large group of [nearly] 900 providers that is fully integrated and not consolidated, so pushing into risk is not an issue. We are already capable of handling more risk in the organization. But when you have a consolidated network, or an individual doctor or smaller group, the amount of data analytics that’s needed to manage risk is financially unaffordable. For a hospital institution, I think you will find that they will have a hard time on the payment schedule as they move towards risk on fair market value. So the small practices will have to figure out how they will consolidate into a larger group to help defray some of their costs for the data analytics they need to do in order to take on risk.

How are you currently handing MACRA/MIPS?

We are in an advanced alternative payment model (A-APM) since we are in Next Gen, though we still have physicians who come on that are required to do MIPS. For us, we have the data analytics to handle it and we have achieved a fair amount of savings in MIPS. Now they are moving to bundling programs, so we can manage that with the data analytics that we have. The government has demonstrations to see what makes sense and what doesn’t, and then you have all these practices figuring out how they could justify moving in and out of all the programs, and where the best economic value is. And it doesn’t mean you will have the best quality outcomes, but rather you are looking to move to the program where you see the best economic value.

How are things progressing with Summit Health Management?

[In 2014], we broke out all of management from Summit Medical Group and we started Summit Health Management. It started with 500 employees, and we have full coding compliance, we audit within it, as well as having all revenue cycle, accounting, and MSO (managed service organization) services within it. Also within it is a large population health department that we offer services to the three groups that we have MSA agreements with: Summit Medical Group New Jersey, Summit Medical Group Oregon, and Summit Medical Group Arizona. So we can scale the commitment and the resources within the management company to the three groups in order to run what is needed in that organization for its value proposition.

Each location is different, so we are ahead of the curve with upside and downside risk in New Jersey, with 65 percent of our population at full risk. In Oregon, it’s a little bit of shared savings and a little pay-to-play, and in Phoenix, besides the MSSP (Medicare Shared Savings Program) product and managed Medicare, on the commercial side it’s only a little pay-to-play. So we are able to adjust and scale what’s needed in the different organizations in the management company.

What are the keys to having 65 percent of your patient population in New Jersey at full risk?

It has to do with the governance and leadership of the organization, and how we structured the culture as an all-for-one. We also don’t differentiate in how the doctor sees a patient from the PPO world versus the HMO world. In all of our products, we heavily manage the sickest percent of the patient population, and we decentralize preventative care in the organization. We see it as “payer-blind” in terms of how we compensate within the organization. So they do not know who is a fee-for-service patient and who is an HMO patient because we don’t want to make a distinction on how they care for the patient. And that was culturally how it was developed in the group.

And on the back end, yes, sometimes we do a little more care management for one [side] or the other because it’s [needed], but we do try to manage all patients the same way. We know that all of our payers will eventually move to higher risk, so when you are in the fee-for-service world, these payers know what the total cost is because claims adjudication is still based in a fee-for-service world.

[Essentially], you are still putting in individual claims, but you are rolling up all those costs and then comparing it to your total costs to the total costs on the outside. If you cannot demonstrate savings to a payer, even in a fee-for-service world, they will go after your rate structure, and you essentially will be at risk because you will lose revenue if they decrease your reimbursement in that program.

How important are payer-provider relationships? Have they improved in recent years?

You cannot look at your payer relationships as adversarial when you are in a large group practice. Think of them as your partners, because as all insurers move to high-deductible or employer-based [plans], you have to look at how you achieve savings moving forward. When you look at shared savings, who is benefitting in the shared savings? It has to either be either the employer, the insurance company, the beneficiary, or the provider.

We are in a full-risk contract with Horizon Blue Cross Blue Shield in New Jersey, and they are a very good partner. We have more than 60,000 attributed lives who are at full risk with Horizon in the state, and we have seen that we have lowered the cost of care with this product over the past five years, and we have consistently beat the market in lowering the cost of care. So the payer is happy, the employer base is happy and the individual, who might not realize it, is happy because we look at the sites of service and we lowered the out-of-network or deductible cost for that patient.

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