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In Response to Public Comments on CMMI, CMS will Consider Direct Provider Contracting Model

April 24, 2018
by Rajiv Leventhal
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CMS is issuing a follow-up RFI to garner feedback on a potential direct provider contracting model

The Centers for Medicare & Medicaid Services (CMS) has released the comments submitted by healthcare stakeholders in response to the CMS Innovation Center’s new direction request for information (RFI), while also announcing that the agency is considering a direct provider contracting model as a result of the feedback that was received.   

For background, Congress created the Center for Medicare and Medicaid Innovation (CMMI) in 2010 to test new approaches and models to pay for and deliver healthcare. In an op-ed in the Wall Street Journal last September, CMS Administrator Seema Verma said the Trump Administration plans to lead CMMI “in a new direction” to give providers more flexibility with new payment models and to increase healthcare competition. Verma said that CMS would be issuing a request for information to collect ideas on the path forward. “We will move away from the assumption that Washington can engineer a more efficient healthcare system from afar—that we should specify the processes healthcare provider are required to follow,” Verma wrote at the time.

CMS recently said that the agency received more than 1,000 responses to the RFI from a wide variety of individuals and organizations located across the country, including medical societies and associations, health systems, physician groups, and private businesses. Since the RFI comment period closed last November, CMS has been reviewing the responses, “which provided valuable insight on the potential to improve existing models as well as ideas for transformative new models that aim to empower patients with more choices and better health outcomes,” CMS officials said.

What’s noteworthy in CMS’ announcement is that in response to the comments that were received on the RFI, the agency also said that it would be taking a next step to develop a potential model in direct provider contracting (DPC). According to CMS, “A direct provider contract model would allow providers to take further accountability for the cost and quality of a designated population in order to drive better beneficiary outcomes. Such a model would have the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures.”

As part of its process to gain further insight from the public in this area and ask more focused questions, CMS is issuing a follow-up RFI on the DPC model through May 25.

In the RFI on the DPC model, CMS said that it is aware of a wide range of payment arrangements that involve aspects of “direct provider contracting,” from the existing ACO (accountable care organization) initiatives and CPC+ Model test to capitation arrangements between primary care providers and commercial insurers or Medicare Advantage plans, to arrangements in the private sector where, for example, patients contract directly with physicians and group practices.

Given this range of activities, the agency wrote, “a DPC model (or models) could be tested in an iterative manner with additional options added over time. For purposes of beginning a DPC model test, CMS could contract directly with participating practices, such as primary care practices or larger multi-specialty groups, to establish the practice as the main source of care for services ranging from solely primary care to a wide range of professional services for beneficiaries that voluntarily elect to enroll with the practice.”

Moreover, regarding the CMMI “new direction RFI,” some stakeholder comments were made public late last year, including from Premier, which said that the center should take to “promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.” In it comments, Premier also called for increased participation in Advanced Alternative Payment Models (APMs) under MACRA (the Medicare Access and CHIP Reauthorization Act.

Other comments from the EHR Association called for the harmonization of the technology requirements of new payment models with the requirements related to certified EHR technology (CEHRT) already incorporated into other programs, such as advanced APMs and the Merit-Based Incentive Payment System (MIPS). The American Hospital Association (AHA), meanwhile, specifically mentioned its desire for the timely availability of data, while the American Medical Informatics Association (AMIA) recommended that CMS look for ways to provide “innovation support” to grantees, while also leveraging new models and pilots to further promote and optimize the use of informatics tools and capabilities for improved patient care.

According to CMS officials, in totality, the responses focused on a number of areas related to enhancing quality of care for beneficiaries and decreasing unnecessary cost, such as increased physician accountability for patient outcomes, improved patient choice and transparency, realigned incentives for the benefit of the patient, and a focus on chronically ill patients. In addition to the themes that emerged around the RFI’s guiding principles and eight model focus areas, the comments received in response to the RFI also reflected broad support for reducing burdensome requirements and unnecessary regulations.

CMS said that the agency is sharing the feedback received to promote transparency and facilitate further discussion of how to move the Innovation Center in a new direction. “The RFI was a critical step in the model design process to ensure public input was available to help shape new models. Over the coming year, CMS will use the feedback as it works to develop new models, focusing on the eight focus areas outlined in the RFI,” the agency said. The public comments can be read in full here.

“HHS has made shifting our healthcare system to one that pays for value one of our top four department priorities,” said HHS Secretary Alex Azar. “Using bold, innovative models in Medicare and Medicaid is a key piece of this effort. We value stakeholder input on the new direction for the Innovation Center, and look forward to engaging on especially promising, groundbreaking ideas such as direct provider contracting.” Verma added, “The responses from this RFI will help inform and drive our initiatives to transform the healthcare delivery system with the goal of improving quality of care while reducing unnecessary cost.”


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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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