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At the World Health Care Congress, a Frank Discussion of Value-Based Care, Volume, and Consolidation

May 3, 2017
by Mark Hagland
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At the WHCC, three industry leaders’ probing discussion of the complexities around value-based purchasing and volume

How quickly—and well—can the U.S. healthcare system re-envision and rework itself? That profound question was at the substratum of a dynamic keynote discussion on May 2 at the World Health Care Congress, being held at the Marriott Wardman Park in Washington, D.C. Tuesday morning’s first keynote panel discussion, entitled “Propel the Shift to Value-Based Care: The Forefront of Financial Sustainability, Cost Reduction, and Outcomes Improvement,” was moderated by Robert Pearl, M.D., executive director and CEO of The Permanente Medical Group, the physician organization component of the Oakland, Calif.-based Kaiser Permanente organization.

Pearl was joined by Michael Tarnoff, M.D., a practicing surgeon and the CMO of Medtronic Americas, and by Kurt J. Wrobel, CFO and chief actuary at the Danville, Pa.-based Geisinger Health Plan. The three plunged immediately into a dynamic discussion of some of the thorniest issues around the shift from a fee-for-service payment-based U.S. healthcare system to a value-based one.

“The idea of value-based care, to me, is both complex and simple,” Pearl said at the outset of the panel. “Want to know how complex it is? Spend a Saturday reading MIPS and MACRA. But I also think that we have to keep our eye on the fact that it’s simple. Preventing a stroke by managing hypertension is better than going in and retrieving a clot from the carotid artery. But that’s not the way we treat people in this country. Only 55 percent of people with hypertension have it under control. And only half of the people are screened for colon cancer, so that twice as many people die every year,” Pearl noted, among other statistics that he shared. Indeed, even with those sub-optimal outcomes, “Our care is still 50 percent more expensive than in other countries,” he said. “Prevention, medical errors, disparities based on race, account for 500,000 deaths every day. The government will spend over half of its tax revenues on healthcare, which can’t go on.”

Continuing, Pearl asked, “So how will this change happen? How can we accelerate the change, and what will be the impact upon physicians, upon hospitals, and upon the overall healthcare system?”

“A couple of years ago, I began to think about what we’re talking about this morning, which is the notion of variation in care,” said Tarnoff. “I was called in to see a young woman with abdominal pain. That generally equates to a CAT scan. She did have appendicitis. I came in in the middle of the night, performed a minimally invasive appendectomy, made a couple of very small incisions, took out her appendix, and six hours later, she was up and walking and on her way home. And our chief resident said, ‘It’s a good thing you were here tonight Mike; if we had had a regular trauma surgeon on call, they would have done an open appendectomy and she would have been here for at least a few days.’ And I thought, gee, that’s not fair. Why is the standard of care not in place? We shouldn’t allow for variation to dictate that that young woman gets different forms of treatment [based on variations in situation]. I can pull up on my phone evidence-based literature. But we don’t rely on that; instead, we end up with a high degree of variation in practice and decision-making, which leads to variation in outcome, and there you have a simplistic view of why things are so variable. So I began to look at Medtronic about how we could look at variation and change it. Variation as the enemy of quality, and the need for non-traditional partnerships to fix it.”

“I’ve spent my whole life as an actuary, and recently became chief actuary at Geisinger Health Plan,” Wrobel said, by way of introduction. “We’re not a traditional health insurer; our insurance is tightly connected to a clinical enterprise. The other piece of this, in looking at these questions as an actuary, is to think about the underlying risk we’re taking. And what we’re trying to do at Geisinger is to make the financial arrangements so that we can improve the quality of care and reduce variations. And where we ultimately want to take this program is less about the financing piece and more about the kinds of things Michael is taking about.

Even in 2017, Pearl said, “Half of the hysterectomies are open, whereas the most value-based organizations are doing it minimally invasively; gastric cancer is the same. What are the specific things you’d recommend to make it happen? I want to know the exact steps.”

“I do like to make things simple,” Tarnoff replied. “How about if we follow the data and the evidence? Where we have evidence and data and proof points that a particular standard or care path should be followed—category one is, what do the data and evidence suggest should be the standard of care? And how far are we from being where we should be? I’ve seen hysterectomy done as an outpatient procedure: you come in in the morning, have a minimally invasive hysterectomy, go home the same day. I wasn’t surprised it could be done, but was surprised it was happening. So I got on a plane, and went to see it being done. Then I got on a plane and saw minimally invasive bariatric surgery. So we know that those surgeries are happening,” he said.

What’s more, he noted, “Even with minimally invasive surgery, patients aren’t always leaving right away. The sin of variation is this: we’ve just tolerated everyone doing something other than that [the clinical standard]. The world at large is guilty of the change and the move away from evidence.” But, he said, mandating that clinicians and patient care organizations deliver care according to a certain standard, and be paid less or not at all for not meeting that standard, will become necessary. “In our work at Medtronic, we’ve shown health systems this variation,” he added. “And we’ve been told by large health systems, ‘You know, we’re just not ready to confront our doctors, they might take their business down the street.’ So I think that changing the payment model is the third piece.”

“That is the third piece,” Wrobel agreed. “The challenge is to line up the financial incentives to accomplish reduction in variation and compliance to a standard,” he said. “And because we own our own plan, the discussions are easier. Also, we’ve been at this at Geisinger for a number of years. My initial response is that provider-sponsored health plans can do this more easily. Then you have an ACO [accountable care organization] with total cost of care; the same is true with bundled payments as well. Those are two other components—now, each of those have their own advantages and disadvantages. But those are two other venues.”

Multiple incentives shifting at once?

“If we’re going to make change, does it come from the government making regulations, businesses refusing to pay otherwise, or disclosing to every patient the alternatives?” Pearl asked his fellow panelists.

“I would say, all of the above,” Tarnoff responded. “There isn’t a single guilty party here, there are many guilty parties. I think the payers, to be honest, have at large, the most power. Follow the money. Who butters your bread, so to speak? And as I’ve looked at bundled payments and what goes on with Medicare’s BPCI [Bundled Payments for Care Improvement] program, and how a change in the payment structure can change behaviors in providers and patients, I would say that I think the most powerful thing that could be done would be payment changes. For example,” he said, “if you said, here’s a fixed payment for appendectomy that forced you to look at the entire episode of care around that procedure, and if there were a way to fix that price or reimbursement, all of a sudden, I have to talk to the ED people, surgeons, nurses, case managers, home care, etc.”

What’s more, Tarnoff said, referencing a specific, though unnamed health system, “Even in advance of payment changes, an organization working with minimally invasive valve replacement, found that it forced them to work through developing an integrated network, and look at their own practices; this was in advance of payment changes, and they found that they just weren’t profitable. They moved their length of stay from 12 days to 2, moved their length of stay down to 2 days, which was best in class. And they were incentivized by their need to be profitable. So if their payer came to them, that would have accelerated it even more.” In other words, beginning to move down the path towards preparing to take on risk contracting, will inevitably help the leaders of a patient care organization to improve processes and efficiency.

In that regard, Wrobel said, “The potential for providers to take risk and start their own insurance company, that could roll out on a broad basis over time. And you have a partner organization that would have access to the entire premium dollar. It’s a difficult program to roll out on a broader basis; but bundled payments—that’s another mechanism. And it’s giving providers risk on something they can actually manage.” In fact, he said, “On an actuarial basis, I’m concerned about giving providers risk that they can’t manage, and that can be true with total-cost-of-care risk. With bundled payments, you’re giving them discrete risk, which is actually called technical risk. With risk for the entire population, that payer could have some bad situations and be hurt financially. The risk there is that now you don’t have a direct connection between your outcomes and your payment. So I would urge [the leaders of patient care organizations to take on] broader bundled payments, because it’s a more efficient way of managing risk.”

Turning to Wrobel, Pearl asked, “What is Geisinger doing, as you move to a value-based system?”

“We’re looking at everything holistically. It won’t be just the hospital system and health plan. It’s no longer we and them, we’re trying to make the best decisions as a total system. And it gets into how we want to manage dollars with providers. We actually have a social compact with our providers: instead of having all these financial components, we have a compact for providing high-quality care and access, research, providing a good process and system. And one of the dangers is making things so complex and financially oriented that we no longer have providers focus on what they do best, which is to provide good care.”

A granular conversation about patient volume

“How are we going to reassure the patient and make sure they don’t suffer a complication from pursuing potentially a dangerous approach?” Pearl asked.

“I came out of med school 17 years ago as one of the first to be able to train in minimally invasive surgery; I was given a year fellowship at Cleveland Clinic to do this,” Tarnoff said. “And I was approached by some members of my department in varying ways,” in terms of their reactions to the introduction of minimally invasive surgery there at that time. “Some were completely resistant and angry, and others were very interested and wanted me to help them. And now, 17 years later, I will say that the answer is, we all took a Hippocratic oath, all agreed to give patients the highest standard of care. And if you’re falling behind the times, you have to make decisions about how you want to operate, literally, in this case. And there’s no excuse for not learning new techniques. Companies like Medtronic will offer support for learning new techniques. I think it’s that simple. I think these skills can be transferred, and things can be learned; and I don’t think you can argue with that.”

“With volume, surgeons simply get better,” Pearl said, adding that “Heart hospitals in the U.S. are often doing fewer than 300 surgeries a year, which is fewer than one a day. You can’t have high quality at that rate.” Inevitably, he said, some hospitals that perform smaller numbers of key procedures, will need to cease doing those procedures, or even to close altogether, over time. “How will our nation move forward on the difficult issue of consolidation, of closing hospitals to improve care quality?”

“You’re getting at a really important point, which is that volume is critical,” Wrobel said. “I approach it for what kind of funding mechanisms would help with that approach, where certain facilities would specialize in certain procedures. And under bundled payments, certain facilities would be able to drop their price based on volume. And particularly on heart surgery and other expensive procedures, you could have bundled payments, and different facilities competing based on volume. You could see certain facilities competing on price, and build that into an insurance product.”

Adding nuance to the discussion of volume as a proxy for outcomes quality, Tarnoff noted that “The state of Massachusetts was moving towards consolidation” in reimbursing certain patient care organizations as recognized providers, “because CMS [the federal centers for Medicare and Medicaid Services] said if you don’t do bariatric surgery at a certain rate, you won’t be able to do it. Because certain surgical centers were actually getting better outcomes than some of the big-volume centers. As a surgeon,” he said, “I inherently believe that volume is important; the more you do, the better you get at. But we did encounter this issue, that these bariatric surgery centers were able to offer high-quality outcomes with lower volume. And the literature has found that it’s the high-volume facility with the high quality rather than the high-volume procedure list. And that make sense, because if you practice in a high-volume facility, the whole culture is different: the nurses know a case should take an hour, and the nurses know on the floor what a perfect outcome should look like, and everyone knows what good outcomes look like. So the high-volume facility may correct the low-volume procedure list. The poor outcome is picked up faster.”

Looking at that set of results in that area of clinical services, Tarnoff said, “I don’t know that there’s a simple answer to this. I agree that we should consolidate care in general. Geisinger has contracts now with organizations like Wal-Mart, that are contracting with high-volume providers. So the only thing in the way of this, frankly, is patients. I’ve seen way too many patients just demand what they want when they want it. I operated on a woman with an adrenal tumor, I did a minimally invasive surgery, and she was ready to go home that day, but her daughter said she was uncomfortable with her mother leaving that day, so she stayed another day. And some patients are choosing lower-volume facilities. So we’ll say, why don’t you just go to the high-volume center? But that misses the patient dynamic, where they just want to go to facilities where they’re comfortable.”

In fact, Wrobel said, “There is the potential for a smaller organization to compete in the marketplace based on newer techniques or approaches. So I’m not pre-judging the opportunity for smaller organizations to compete; it just has to be on a market-based competition.”

“Having practiced in both environments, I can see that,” Tarnoff responded. “But it’s hard for me to imagine, as the cost containment [phenomenon] continues—everyone’s either going to get smarter and better, or we’ll see this kind of mass consolidation” of patient care organizations.”

“From my Kaiser Permanente experience, when you raise the volume, people start to ask the right questions,” Pearl emphasized. “A great example is around total joints”—total hip replacement and total knee replacement surgeries. “Five years ago, [the standard of care] was two or three days’ stay in the hospital; then it went down to one to two days by two to three years ago. And now, 70 percent [of total hip and total knee replacements] are done outpatient. We’ve just gotten better at it.”

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Healthcare Industry Could Save $12.4B With Full Adoption of Electronic Transactions

January 17, 2019
by Heather Landi, Associate Editor
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The healthcare industry continues to make progress automating business processes, but significant gaps remain, representing an opportunity for $12.4 billion in savings through further automation, according to new data from the 2018 CAQH Index.

Electronic adoption and transaction volume increased in 2018, with several common transactions reaching 80 percent electronic adoption across the sector, according to the latest CAQH Index. This progress resulted in a narrowing of the cost savings opportunity for the first time in CAQH Index history.

CAQH is a Washington, D.C.-based non-profit alliance of health plans and trade associations. The findings from the 2018 CAQH Index are based on voluntary nationwide surveys of providers, as well as commercial medical and dental health plans. Participating medical health plans represent over 160 million covered lives—nearly 49 percent of the commercially insured U.S. population—and 7.8 billion transactions conducted in 2018.

The sixth annual CAQH Index is an annual report tracking the adoption of HIPAA-mandated and other electronic administrative transactions between healthcare providers and health plans in the medical and dental industries. These transactions include verifying a patient’s insurance coverage, obtaining authorization for care, submitting a claim and supplemental medical information and sending and receiving payments. The CAQH Index also estimates the annual volume of these transactions, their cost and the time needed to complete them.

By benchmarking progress, industry and government can more easily identify barriers that may be preventing stakeholders from realizing the full benefit of electronic administrative transactions. These insights can prompt new initiatives to address and reduce barriers. For the report, data was submitted by medical and dental plans that cover roughly half of the insured population in the United States and providers representing a range of specialties.

After reporting modest progress over the past few years, the 2018 CAQH Index findings suggest more positive change is occurring in the industry overall. Healthcare industry stakeholders made progress on many fronts this year—in adoption of electronic transactions, reductions in the volume of manual transactions and reductions in the remaining savings opportunity.

“The results highlighted in the 2018 Index are encouraging,” Kristine Burnaska, director of research and measurement at CAQH, said in a statement. “Both providers and health plans are saving time and reducing administrative costs, but more effort is needed to significantly reduce the volume of expensive, time consuming manual processing.”

While the overall volume of transactions in the medical industry increased by 18 percent in the past year, the volume of manual transactions declined, falling 6 percent for health plans and 1 percent for providers, according to the CAQH Index.

Medical industry adoption of electronic eligibility and benefit verification increased six percentage points to 85 percent in 2018; adoption of electronic coordination of benefits rose to 80 percent in 2018, up from 75 percent in 2017. Adoption of electronic claim submission stands at 96 percent and 71 percent of healthcare organizations have adopted electronic claim status inquiries.

However, the healthcare industry made little progress in the adoption of other electronic administrative transactions—only 12 percent of organizations have adopted electronic prior authorization, although that is up from 8 percent the year before. Adoption of electronic claim payment stands at 63 percent and less than half of healthcare organizations (48 percent) have adopted electronic remittance advice processes.

However, continued efforts are needed to significantly reduce the volume of expensive, time-consuming manual transactions and adapt to the changing administrative needs of the healthcare system, according to the CAQH Index. The Index estimates that the medical and dental industries could save an additional $12.4 billion annually with full adoption of electronic administrative transactions, particularly through greater automation by providers, which could save an additional $8.5 billion.

During a period of rising transaction volume, the medical industry shaved $1.3 billion from its savings opportunity, bringing it to $9.8 billion.

The Index also highlights a substantial rise in overall transaction volume, growing in parallel with industry complexity. As these trends persist, the Index finds that the industry would benefit from updated standards, operating rules, infrastructure and functionality that can accommodate the increase in volume and growing complexity associated with the need to connect administrative and clinical data elements in value-based payment models.

“The industry is making progress,” April Todd, senior vice president, CORE and Explorations at CAQH, said in a statement. “But, we are at an inflection point where processes and technology must adapt to a healthcare system that is transitioning to value-based payment and becoming increasingly complex.”

The CAQH Index notes that industry complexity is growing in parallel with transaction volume. “As these trends persist, the industry will benefit from standards, operating rules, infrastructure and functionality that can accommodate both the increase in volume and the growing complexity associated with varying plan and payment models designed to increase the value and quality of healthcare for consumers. There is a need for all stakeholders to support initiatives that lay the groundwork for the future,” the report authors wrote.

The CAQH Index also issued a number calls to action for the healthcare industry, including focusing efforts to address cost savings opportunities. Several transactions offer the greatest potential for savings and should be the subject of attention—transactions include eligibility and benefit verification, claim status, remittance advice and prior authorization. The medical industry could save an additional $4 billion on eligibility and benefit verifications and $2.6 billion on claim status transactions by fully adopting electronic transactions, according to the CAQH Index.

CAQH also recommends accelerating standards and operating rule development and encouraging timely vendor adoption of standards and operating rules.


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Has CMS Just Tipped the Scales Towards Provider Alienation, in its ACO Final Rule?

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CMS’s release of its final rule on MSSP ACO participation has pushed the healthcare industry into a very fraught moment in the ongoing evolution of the ACO experiment

As Healthcare Informatics Associate Editor Heather Landi reported on Dec. 21, that morning, “The Centers for Medicare & Medicaid Services (CMS) on Friday morning published a final rule that makes sweeping changes to the Medicare Shared Savings (MSSP) Accountable Care Organization (ACO) program, with the goal to push Medicare ACOs more quickly into two-sided risk models.”

Indeed, as Landi noted in her report, “Referred to as ‘Pathways to Success,’ the Trump Administration’s overhaul of Medicare’s ACO program will 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, Landi noted, “Currently, the MSSP model includes three tracks and is structured to allow ACOs to gain experience with the program before transitioning to performance-based risk. The vast majority of Shared Savings Program ACOs have chosen to enter and maximize the allowed time under Track 1, which is an ‘upside-only’ risk model. MSSP Tracks 2 and 3 involve downside risk, but participation in these tracks has been limited thus far.”

One of the biggest points of contention in recent months as centered on how aggressive a push on the part of CMS to compel providers forward into two-sided risk would be desirable, or even wise. Some in the industry tried to put a positive spin on the “low-income” element of the program, with that term referring to smaller physician groups choosing to participate in the MSSP. On Friday morning, in response to the final rule, Travis Broome, vice president of policy at Aledade, a Bethesda, Md.-based company focused on physician-led ACO development, tweeted, “One more change to Basic. Low-revenue ACOs will be able to stay in 1-sided risk for 3 years. Difference [between] 2 & 3 years is big. The decision to take risk is made summer before the year starts. So 2 years of 1-sided risk meant making the risk decision before year 1 results even came in.”

But in a statement from the National Association of ACOs (NAACOS), an association comprised of more than 360 ACOs, Clif Gaus, Sc.D., NAACOS’s president and CEO expressed concern that CMS retained the two-year limit for other ACOs. “Becoming a well-functioning ACO takes time and requires building of IT infrastructure, hiring care coordinators, changing the culture of providers, among other tasks. Under CMS’s proposed rule, many ACOs would have just a single year of performance data available to them before evaluating the required move to risk in their third year of the program,” Gaus stated.

Gaus did include a conciliatory note in his statement, saying that "We appreciate CMS' effort in the final rule to provide greater stability to the Medicare Shared Savings Program with five-year agreement periods and more flexibility through waivers for telehealth and skilled nursing facility stays. We look forward to working with CMS to ensure that the Medicare Shared Savings Program, which has a track record of saving taxpayer hundreds of millions of dollars while demonstrably improving care for patients, continues to attract new participants and reap savings." NAACOS has been among the most vocal of healthcare professional associations this year, as CMS Administrator Seema Verma has intensified her call for providers to move forward quickly into more advanced forms of alternative payment models.

But, choosing not to sound any notes of conciliation on Friday, was the Chicago-based American Hospital Association, the largest U.S. hospital association, representing nearly 5,000 hospitals nationwide. A statement attributed to Tom Nickels, AHA vice president, on Dec. 21, said, “Today’s final rule will not be helpful in the move toward value-based care. None of the actions taken today will better empower ACOs to maximize their contribution to patient care and are not pathways for improving the value of the program for patients. We remain opposed to CMS drastically shortening the length of time in which ACOs can participate in an upside-only model. Hospitals and health systems have asked for a more gradual pathway because building a successful ACO that is able to take on financial risk requires significant investments in time, effort and finances.”

Further, the AHA statement said, “While CMS made some improvements to its shared savings rate policies from the proposed rule, they still are not sufficient to appropriately reward ACOs for improving quality and reducing costs. We are particularly concerned about the impact of these and other policies on high-revenue ACOs. We do appreciate that CMS took certain steps to expand participants’ ability to provide care to beneficiaries – for example, via telehealth and longer agreement periods.”

And, the AHA said, “As a whole, the policies in the rule will likely result in a significant decrease in program participation. That would be unfortunate, as we seek to transform care to better serve our patients and communities.”

While the Centers for Medicare & Medicaid Services (CMS) finalized some improvements to the Medicare Shared Savings Program (MSSP), the Premier healthcare alliance is extremely concerned that these are overshadowed by unrealistic expectations of the speed at which providers can transition to risk-based tracks, the un-level playing field created for hospital-led vs. physician-led ACOs and the imbalance of risk vs. reward.

Meanwhile, leaders at the Charlotte-based Premier Inc. were equally critical. In a statement released on Friday, Blair Childs, Premier’s senior vice president of public affairs said that while “Premier appreciates that CMS finalized the extension of waivers and the longer agreement period and heard our concerns about the reduction in shared savings,” “We are extremely disappointed, however, that CMS has moved forward in creating an unlevel playing field that disadvantages high-revenue ACOs—primarily hospital-led ACOs. Premier and other stakeholders, including MedPAC, oppose this policy,” the statement read. “Hospital-led ACOs in Premier’s Population Health Management Collaborative performed twice as well as all the other ACOs nationally. CMS should be taking steps to enhance, not limit, the inclusion of all innovative providers that are seeking to move to value-based care. For an Administration that has been outspoken in advocating for market solutions and level playing fields among competitors, it’s an enormous mistake to finalize a policy that pits providers against each other rather than focusing on collaboration, as the model intends.”

So, where does this leave the industry? Quite possibly, at an important inflection point, now that what was a proposed rule is now a final rule. One could argue this situation from a number of standpoints, but the bottom line is simple: in her desire to push providers forward quickly and decisively into two-sided risk—and even with the carrot-like incentives for smaller physician groups that have been added—Administrator Verma is now strongly risking a massive wave of defections from the MSSP.

As NAACOS’ Gaus noted in his statement, “Under CMS's proposed rule, many ACOs would have just a single year of performance data available to them before evaluating the required move to risk in their third year of the program.” Perhaps similarly importantly, he noted, "Although we are pleased that CMS finalized a new, limited exception to its high-low policy, we remain concerned that the high-low revenue ACO distinction could deter providers who want to embark on the path of value-based care and could unintentionally harm physician-led ACOs. We urged CMS in the rulemaking process to provide an equal playing field for all ACOs and will continue to advocate for changes to this policy. A NAACOS analysis of how ACOs would be classified under CMS's proposed definitions found almost 20 percent of physician-led ACOs would be considered high revenue ACOs. Furthermore, federally qualified health centers and rural health clinics would also have a fair proportion of high revenue ACOs.”

So, here we come to a very tricky set of issues. First, the entire point of adding in the “low-income ACO” distinction was to encourage more physician groups to join the MSSP; and that would be very important for the survival and thriving of the program, since the participation of hospital-based organizations has been slow to date, and one key way to encourage participation by all types of patient care organizations would be to be able to boast about rapidly increasing participation. But if, as Gaus has noted, NAACOS’ analysis finds that nearly 20 percent of physician-led ACOs would actually end up being “high-revenue ACOs,” that could indeed complicate CMS’s attempts to quickly gain new participants.

Further, the short period of time between initial participation and having to decide whether to stay in the voluntary program and take on mandated two-sided risk, poses one of the most serious barriers to increased participation; and therein lies the real rub for CMS, because if this final rule ends up causing mass defections in the next two years, the agency’s signature and largest federal ACO program could begin to fall apart, precisely at the time that Administrator Verma, Health and Human Services Secretary Alex Azar, and all their fellow senior federal healthcare policy officials, would be hoping to accelerate the shift from volume to value in U.S. healthcare, and prove that the broad ACO experiment is working.

On the other hand, it’s also true that if CMS allows the forward evolution of the MSSP program to progress too slowly, that could cause members of Congress and their staffs to determine that voluntary programs simply aren’t cutting it, and move towards massive Medicare cuts instead, in an attempt to get better control of overall U.S. healthcare inflation, at a time when all discretionary spending in the federal budget is increasingly becoming politically fraught.

For the time being, there is no simple answer to any of this. It’s as though the levers of power and influence must be used in an exquisitely calibrated way. There seems to be no “Goldilocks pace” of change here that will both maximize new participation, and ongoing participation, in the MSSP program, on the part of wary providers, and yet also fulfill all the demands and desires of senior federal healthcare policy officials. Only time will tell, but this moment feels more fraught than ever, in the ongoing evolution of the ACO experiment. There’s no doubt that 2019 could be a determinative year for MSSP.



Related Insights For: Payment


CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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