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Healthcare Industry Leaders React to Quality Payment Program Final Rule for 2018

November 3, 2017
by Heather Landi
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One day after CMS released its final rule for 2018 requirements under MACRA’s Quality Payment Program, industry leaders express a spectrum of reactions
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The day after the federal Centers for Medicare and Medicaid Services (CMS) released the final rule making changes in the second year of the Quality Payment Program (QPP) under the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law, healthcare industry leaders are voicing mixed reactions, but do seem satisfied with some of the increased flexibilities that were maintained from the proposed rule, and intended to provide clinicians with a smoother transition to the Quality Payment Program.

Late in the afternoon on Thursday, Nov. 2, CMS published the 1,653-page calendar-year 2018 QPP final rule, under the MACRA law, affecting Medicare-participating physicians covered either under the MIPS (Merit-based Incentive Payment System) program, or participating in APMs (advanced payment models). It’s clear that easing provider burden in complying with MACRA was a priority for CMS officials in keeping with many of the proposals in the proposed rule.

In a press release announcing the final rule, CMS officials stated, “While part of CMS’s broader strategy to relieve regulatory burdens for providers, these rules also reflect the agency’s efforts to promote innovation in healthcare delivery aimed at lowering prices, increasing competition and strengthening the relationship between patients and their doctors.”

“During my visits with clinicians across the country, I’ve heard many concerns about the impact burdensome regulations have on their ability to care for patients,” Seema Verma, CMS Administrator said in a statement. “These rules move the agency in a new direction and begin to ease that burden by strengthening the patient-doctor relationship, empowering patients to realize the value of their care over volume of tests, and encouraging innovation and competition within the American healthcare system.”

Some of the key changes in the final rule include raising the MIPS performance threshold to 15 points in year 2, from 3 points in the transition year, and the final rule allows the use of 2014 edition and/or 2015-certified electronic health record technology (CEHRT) in year 2 for the Advancing Care Information performance category, and gives a bonus for using only 2015 CEHRT. For the 2018 MIPS performance year final score, the performance category weights will be: quality, 50 percent; cost, 10 percent; improvement activities, 15 percent; and Advancing Care Information, 25 percent. A 26-page fact sheet summarizing the final rule can be found here.

Some healthcare industry leaders have expressed concerns about CMS’s decision to require a full-year reporting period for the cost and quality performance category, rather than a 90-day reporting period.

Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), said in a statement, “MGMA is very disappointed that CMS quadrupled the length of the quality reporting period under MIPS from the current 90 days to 365 days in 2018. This fourfold increase to the quality reporting requirements is in stark contrast to the Agency’s statements today that the final rule reduces regulatory burdens. CMS is in effect prioritizing quantity over quality and giving physicians less than 60 days to prepare for the 2018 MIPS requirements.”

It should be noted that the final rule sets a 90-day reporting period in both 2018 and 2019 for Advancing Care Information and Improvement Activities performance categories.

According to CMS, the final rule includes a number of policies designed to provide clinicians with a smoother transition to the Quality Payment Program. “The QPP final rule includes policies that reduce burden and support clinicians in small and rural practices to successfully participate in this program. CMS is decreasing the number of clinicians required to participate,” CMS stated in the press release.

“There weren’t a whole lot of surprises” with the final rule,” notes Jeff Smith, vice president of public policy at the American Medical Informatics Association (AMIA). “When you focus on the quality payment program in MIPS, I think CMS telegraphed that they want to provide much more flexibility and are looking for ways to make the program more feasible for docs, and I think the final rule really does follow through with that intention.”

Adaeze Enekwechi, Ph.D., vice president of McDermott + Consulting, a Washington, D.C.-based healthcare consulting firm, who previously worked at the White House Office of Management and Budget (OMB) under the Obama Administration as the associate director for health programs, contends that CMS designed year 2 of the MACRA QPP as a gradual ramp up to full implementation in 2020.

Sharing her initial takeaways on the 2018 MACRA QPP final rule, Enekwechi, who also previously served as a senior analyst with the Medicare Payment Advisory Commission, and at the Congressional Budget Office, says, “What the Administration is doing is really making an effort to continue to ease the burden of implementation of MACRA this second year, but, at the same time, they recognize that full implementation will begin in the third year, so they don’t want to leave clinicians completely unprepared. You see evidence of a little bit of a ramp up, when you look at the MIPS scoring, whereas before you needed a minimum of 3 points and now it’s 15. And, cost is now weighted at 10 percent in the second year as opposed to zero in the first year,” she says, adding, “To me, it read very much like a real effort to get folks ready for 2020.”

In the proposed rule, plans from CMS signaled that many more clinicians will be exempt from MIPS once again, like they were in year one of the QPP, which began in January. In keeping with the proposed rule, the final rule will increase clinicians’ low-volume threshold from $30,000 or less in Medicare Part B allowed charges or less than 100 Medicare patients to $90,000 in Part B allowed charges or less than 200 Medicare patients.

There has been some debate about whether excusing more clinicians from MIPS for another year is beneficial in the long-term. Enekwechi notes that one potential impact of increasing the low-volume threshold is a growing chasm between physicians currently participating in MIPS and those who are exempt.

“You have some clinicians who are participating in MIPS and going through the rigorous effort of measuring quality, reporting, and for all intents and purposes, marching toward higher risk payment models, and just getting more involved in advanced APMs (alternative payment models). And then, on the other side, you have a whole set of clinicians who are not going to be exercised in that way and will not adjust to these new payment models that are coming out, not just from Medicare but from the commercial side. I do think, if we continue down this path where the majority are not participating in MIPS or APMs, I think we’re going to start to see differences between those two classes of clinicians,” she says.

To this point, the National Committee for Quality Assurance (NCQA) said in a statement that it is grateful that the rule lets small practices form virtual groups in 2018. It said, “Virtual groups can help small practices join together to have enough patients for robust measurement and prepare for APMs. Unfortunately, the rule prevents the smallest practices from joining virtual groups by defining low-volume practices as ineligible for MIPS. Low-volume practices—those with less than $90,000 in Medicare revenue or 200 Medicare patients—most need virtual groups so they can have reliable measurement and reap rewards for improvement. CMS could remedy this by amending its low-volume definition to say these practices are ineligible for MIPS ‘unless they join a virtual group.’”

Smith notes several positive developments in the final rule, such as giving providers the ability to use either 2014 Edition Certified Electronic Health Record Technology (CEHRT) or 2015 edition CEHRT, which was also in the proposed rule. “It was good to see that CMS is continuing to try to find ways to gently encourage people to adopt 2015 edition CEHRT as they maintained from the proposal to offer a bonus for using it,” Smith says, referring to the policy in the final rule that states providers can earn a 10 percent bonus if they only use 2015 edition CEHRT.

CMS also increased the number of improvement activities that are eligible for bonus credit under the Advancing Care Information category. As one example, CMS plans to give bonus credit to physicians who consult patient-generated health data from consumer wearables. Smith says, “I think that will be an important policy moving forward, for a host of reasons, not least of which is the fact that there are a growing number of consumer technologies that patients are showing up at their doctor’s office and saying, ‘here’s my data, this is keeping track of my weight or blood pressure and how do we make sense of that.’ If you look at the improvement activity piece of MIPS, they are trying to give credit to innovation and experimentation.”

He continues, “And, while it doesn’t account for a huge portion of the overall MIPS score, I think it’s an important policy lever. It will be interesting to see what additional kinds of issues arise out of this new proposal to pay physicians to take patient-generated health data and spend time with that data, but, I think, overall, that’s a positive aspect of the Improvement Activities.”

In the press release about the final rule, CMS noted that to further ease clinician burden, CMS is adding an option to help clinicians and small, rural practices join together and share the responsibility of participating in value-based payments in virutal groups. CMS is also adding a new hardship exception to assist small practices and clinicians impacted by hurricanes Harvey, Irma, and Maria. This change mitigates the absence of Electronic Health Records as a result of the natural disasters.

CMS also reports that it intends to develop a demonstration project testing the effects of counting as credit participation prior to 2019 and through 2024 in Medicare Advantage plans that meet certain criteria. In a statement released on Thursday, Blair Childs, senior vice president of public affairs at Charlotte-based Premier Inc., said he is encouraged that CMS plans to develop a demonstration project to examine how Medicare Advantage alternative payment models qualify for the threshold test and obtain the five percent MACRA bonus prior to 2021. Childs noted that nearly one-third of Medicare beneficiaries are enrolled in an MA plan. “Many MA plans have engaged providers in innovative value-based contracts that are benefiting patients and should count toward qualifying eligible professionals for the bonus in 2019. This policy would level the playing field for clinicians in areas with high MA penetration,” he said.

Regarding CMS’s efforts to reduce provider burden, Enekwechi says, “I think they’ve leaned as far as they can, while still maintaining implementation. I think that the slow ramp up in terms of scoring, basically they went from 3 points to 15 points, that’s still pretty low. I think 10 percent weight applied to the cost category is better than 0, and not as terrifying as 30 percent for MIPS eligible clinicians. They have also created multiple ways to submit data and information; you can do it through registries, you can do it through their website. This agency is doing as much as it can to try to ease burden with respect to implementation.”


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EXCLUSIVE: NAACOS President Foresees “Shrinkage in Accountable Care Movement” Pending MSSP Final Rule

December 5, 2018
by Rajiv Leventhal, Managing Editor
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If CMS doesn’t scale back some of its proposed changes to the MSSP, the government’s largest value-based payment program will be significantly affected, says one ACO leader

When the Centers for Medicare & Medicaid Services (CMS) released its proposals to overhaul the federal Medicare Shared Savings Program (MSSP), it was expected that industry associations, along with the ACOs (accountable care organizations) themselves, would push back strongly.

After all, in the August proposed rule, CMS, which has the core aim to push these organizations into two-sided risk models—so that Medicare isn’t on the hook when ACOs overspend past their financial benchmarks—suggested 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.

One option, per CMS’ proposal, would be the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk. The second option would be 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.

But where CMS, in its proposals, truly clamped down was through two core recommendations that stakeholders took issue with: shortening the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years; and cutting potential shared savings in half, from 50 percent to 25 percent for one-sided risk ACOs. These proposals, if finalized, will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

One of the trade groups that has done much of the heavy lifting when it comes to pushing back on the government’s proposals, and offering evidence as to why ACOs need more time in one-sided risk models while being able to reap more of the shared savings, is NAACOS (the National Association of ACOs,) an association comprised of more than 360 ACOs across the U.S.

In a recent interview with Healthcare Informatics, Clif Gaus, president and CEO of NAACOS, confirmed that the reduction of shared savings and the shortened time allowed in one-sided models are two of the biggest problems the group has with the proposal. Specifically, Gaus says that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

He explains that after polling NAACOS’ members, asking them if they would hypothetically apply to be an ACO knowing that at first, they would be limited to 25 percent of shared savings at most, “the near universal response was no, they wouldn’t have joined the program.” Gaus adds, “The potential of 25 percent savings just isn’t enough to offset our investment costs of starting and operating the ACOs,” noting that ACOs have to obviously put up money to get going, and sometimes it’s very hard for medical group practice-dominant ACOs to buy IT systems, not to mention the whole clinical transformational aspect of ACOs where they are typically hiring nurse coordinators, and in some cases opening 24/7 call centers.

“There is a real start-up and operational cost that’s involved, and [getting] 25 percent of the shared savings doesn’t return enough income to offset those,” he says.

Regarding the proposal to shorten the time in a one-sided risk model from the current six years to two years, Gaus points to CMS’ own data which shows that more experience in a federal ACO model drives more savings, but typically the first few years are not profitable for the ACO.

“We have many examples where an ACO has been in the program and was able to turn the corner by the fifth or sixth year,” he says. “Medicare has to have a long-term view of this. We are investing in a totally new redesign of the healthcare system, so give us time to learn how to transform that care into more efficient and higher-quality care. We are troubled by two years,” Gaus frankly admits. He believes that capping the time in a one-sided risk model at three to four years “is reasonable,” and is what many other associations have proposed.

Indeed, while NAACOS and other industry groups have made their arguments to CMS clear, the federal agency has so far taken a firm stance that upside risk-only ACOs have not been effective. A such, CMS seems to be fine with these ACOs leaving the MSSP— by far the largest federal ACO model, with 561 participants—if they are unwilling to take on more risk.

But Gaus believes that even though CMS did come out of the box with an “aggressive negative message” about one-sided ACOs, the agency has now moderated its views. To this end, a recent study from NAACOS and Dobson Davanzo & Associates, based on a different way of measuring financial success—by comparing actual costs over time in the ACO’s market as opposed to CMS’ method of calculating an initial risk-adjusted spending benchmark for each ACO based on its historical spending, without considering underlying market factors—revealed that MSSP ACOs generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by CMS.

“The whole dialogue has changed,” says Gaus. “We have met with Seema and a number of her staff over the last two months, and the driving factor to this change in dialogue is that the 2017 data, from CMS’ benchmarks, turned the corner and showed that net-net the ACO program was saving Medicare money. You don’t see CMS coming out anymore arguing that the program is losing money,” he says.

What a Final Rule Might Look Like

Gaus acknowledges that a core challenge for CMS is being in the precarious position of pushing down too lightly in its regulations, which could result in the pace of change being too slow, or pushing down too hard, which could result in provider organizations fleeing value-based care initiatives.

“We know the government is wrestling with this issue, and so are we,” Gaus says. “In the crafting of our comments to CMS, as well as the comments from the AHA [American Hospital Association], AMA [American Medical Association], and others, we felt that the balance is the issue here, and there needs to be some movement toward the direction that CMS is pushing. We do respect their concerns, to a degree, but we just thought they were too aggressive in their speed to risk, or speed to remove an ACO from the program,” he says.

Gaus is hopeful that the final rule on the future of the MSSP—which he believes could come by the end of the year, but no later than the end of January—will reflect the industry’s concerns. “History says that this administration, like many others, does listen to input from stakeholders that the rule affects. I believe that they really do understand our positions,” he adds.

At the same time, NAACOS’ position is that the reduction in potential shared savings, as currently proposed, is a “total deal breaker,” and that there is no wiggle room for a number between 25 and 50 percent, Gaus asserts. He adds, “If they don’t go back to 50 percent, we will see a long-term significant shrinkage in the ACO movement and a significant emanation of accountable care.”

Importantly, Gaus also notes that ACO programs are voluntary in nature, a key consideration that he believes CMS often forgets. “Nobody has to be an ACO. [Providers] are making a bet of their capital, that they can invest that capital in cost containment, in care transformation, and [in return], they will get back in the shared savings more than they invested. It’s almost like buying stock—you made the investment and you hope the return is worth it,” he says.

Gaus says that he has told Verma in their many conversations that in many ways “we are at a crossroads, and we have to get the balance right, or we are going to see a denigration of what still remains the largest government value-based payment program.”

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Recent Humana Report Points to Encouraging Progress in the Shift to Value-Based Care

November 26, 2018
by Heather Landi, Associate Editor
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Humana's CMO, Roy Beveridge, M.D., shares his perspective on the cultural shift that is necessary for providers to be successful under value-based care models

A recent value-based care study by Louisville, Ky.-based insurer Humana found that patients treated by physicians in Humana Medicare Advantage (MA) value-based agreements had more preventative care screenings and better health outcomes compared to patients in Humana MA fee-for-service agreements.

The Humana report details results in the areas of prevention and outcomes, quality measures, and cost for Humana MA members affiliated with physician practices in value-based agreements with Humana. This is the fifth year Humana has published a value-based report and the insurer reports ongoing progress in improving health outcomes and lowering costs.

As of Sept. 30, 2018, Humana’s total Medicare Advantage membership is more than 3.5 million members, which includes members affiliated with providers in value-based and standard Medicare Advantage settings. According to the report, Humana reached its 2017 goal of having 66 percent of its 2.9 million individual MA members affiliated with primary care physicians in value-based agreements.

For the annual study, Humana compared quality metrics and prevention measures for calendar year 2017 for approximately 1.74 million MA members who were affiliated with providers in value-based reimbursement model agreements to approximately 130,000 members who were affiliated with providers under standard MA settings, which doesn’t offer added incentives to providers who meet quality or cost targets.

Humana also compared medical cost and utilization for calendar year 2017 for approximately 1.5 million MA members who were affiliated with providers in value-based reimbursement models to approximately 146,000 members who were affiliated with providers under standard MA settings as well as to original fee-for-service Medicare.

The study found that patients affiliated with physicians in Humana MA value-based agreements had more favorable outcomes in all Healthcare Effectiveness Data and Information Set (HEDIS) Star measures. HEDIS is a measurement tool developed by the National Committee for Quality Assurance (NCQA) to assess health plans’ performance on various dimensions of care and service.

Humana MA members affiliated with physicians in value-based agreements experienced 7 percent fewer emergency room visits and 5 percent fewer hospital admissions per thousand compared with standard MA settings in 2017, and the number of preventive screenings was 11 percent higher for colorectal cancer and 10 percent higher for breast cancer.

Patients with diabetes who are affiliated with value-based physicians had more condition-specific screenings and better adherence to medications, demonstrating tighter control of blood glucose and blood pressure levels. The report indicates similar results for patients with hypertension—better medication adherence rates and better management of their blood pressure.

What’s more, the study found that medical costs for patients who are affiliated with physicians in Humana MA value-based agreements were 15.6 percent lower than original Medicare FFS. In addition, more physician practices in Humana MA value-based arrangements received a shared savings surplus in 2017 compared to 2016, up to 70 percent from 60 percent the prior year, according to the latest report.

“We believe value-based care is essential to achieving improved population health. Thus, we continue to work closely with physician practices to support them in the transition to value-based care—with actionable data, care coordination, clinical programs, predictive models and innovative solutions,” Stanley Crittenden, M.D., a physician and lead medical director, national medical review, at Humana, wrote in the report.

According to the report, citing statistics from MedPAC and the Henry J. Kaiser Family Foundation, about 10,000 people join Medicare daily, and the Medicare population is expected to increase from 56 million in 2015 to 81.5 million in 2030. Eighty-three percent of Humana’s 3.3 million Humana MA members, as of December 31, 2017, are living with at least two chronic diseases. Humana is using a holistic approach, leveraging value-based reimbursement models, to address this challenge, according to company officials.

Speaking with Healthcare Informatics earlier this month, Roy Beveridge, M.D., Humana’s Chief Medical Officer, notes that the important takeaway from the value-based care report is the consistent progress of physician practices in value-based care arrangements to improve quality and reduce health care costs.

Roy Beveridge, M.D.

“Based on the report, there’s continued improvement in breast cancer screening, in cervical cancer screenings, and there’s improvement in hospitalizations and ER visits. We’re five years out, and we’re continuing to improve on those metrics that everyone agrees are really important,” he says, noting in particular the 7 percent fewer ER visits among Humana MA members in value-based arrangements. “If you continue to have a decrease in ER visits, that’s an indication that the patient is more engaged with her primary care physician or her specialist so that when she is sick, she is reaching out to her primary care doctor. I look at those quality metrics and I’m very excited by that progress; that change didn’t happen over a year or so, but it continues to accelerate.”

Practicing value-based care works to address the nation’s chronic disease epidemic by giving physicians the support and data they need to focus more on prevention and reduce acute care episodes, Beveridge says. “This model allows physicians to focus time and energy on those patients who need the most support to stay well at home, and out of the hospital. Physicians are clearly seeing the benefit of improved patient outcomes and more shared savings.”

Continuing challenges in the shift to value-based care

While the report points to ongoing progress in the shift to value-based care and successful outcomes for those practices in value-based care arrangements, there continue to be significant barriers for healthcare provider organizations attempting to make that shift. For physicians, moving into value-based care often requires an increase in population health management capabilities and access to accurate, actionable data.

“They need technology; they need data from places like Humana and other big payers; they need to be given time so they can transition; they need the educational tools,” Beveridge says of physician practices transitioning to value-based care models.

Currently, many healthcare organizations find themselves straddling two different reimbursement models, fee-for-service payment models and value-based payment models, or what’s offered referred to as “having a foot in two canoes,” and that continues to be a significant challenge for physicians, he says. “It’s this in-between time, the transition time, where physicians are struggling, and they continue to struggle as they are moving from traditional fee-for-service to outcomes-based reimbursement,” he notes.

In the past five years that Humana has been measuring and reporting progress, one of the biggest lessons learned has been the pace of change, Beveridge says. “I think we, and the government and the industry, underestimated the time that it takes for there to be cultural change in the movement from fee-for-service to value. I naively thought, five or six years ago, that this would be a faster process,” he says, adding, “We are moving collectively in that direction, and at a good clip, but I thought that it would go faster.”

Data and analytics play an integral role in the transition to value-based care payment models and are foundational to success under these models, Beveridge says, and to this end, Humana supports physicians with actionable data to give them a deeper understanding of their patients. However, there also are cultural and operational shifts that are required to succeed under value-based care, he says.

“We have physicians coming in who say, ‘I want to move to value very quickly because I understand it.’ We will tell them it’s really a three- to five-year process. You want to make sure that your data systems can do this. You need to make sure that, from a cultural standpoint, your physicians and nurses understand this. There is a lot of effort in being successful in value-based care. People who underestimate the complexity often don’t do so well. We try to be the shock absorber, and remind people, this is harder than they may think and that you need data systems, you need analytics, and you need the right mindset,” he says.

He continues, “Someone once explained it to me like this—in the fee-for-service world, in the morning huddle, you sit and talk about the patients that are coming in to the office in the next eight hours. In the value world, you sit down with data and you say, ‘Who hasn’t come in to the office in the last eight weeks or in the past year? What do we need to do to engage those patients so that we can help the people who are not coming in to the office that day?’ It’s a cultural change that has to occur. It’s not about taking care of the patient in front of you, it’s about taking care of the patients who are not in front of you.”

He adds, “Until everyone’s trained and thinking that way and you’ve got the data to know who’s not there and why there are not there, it’s hard to be successful.”

Beveridge also contends that primary care physicians are vital to delivering more integrated care to patients, and, moving forward, healthcare organizations that want to be successful under value-based care payment arrangements need to place primary care physicians at the center, he says.

The American Academy of Family Physicians (AAFP) reports that primary care physicians receive 6 percent of the total distribution of health care payments nationally. According to the Humana report, primary care physician practices in value-based arrangements with Humana received 16.8 percent of every dollar spent on member care in 2017. Non-value-based primary care physician practices contracted with Humana received 6.9 percent of total payments Humana distributed in 2017.

“If you believe in the value model, then primary care is king, it’s the most important part. You have to pay for that. And what you see with the data is that we believe that the PCP is the lead and that she needs to be compensated appropriately, because historically, primary care physicians have been underpaid, undervalued and under respected,” Beveridge says.

Humana’s experience with value-based payment arrangements has indicated that, with the evolution of value-based care, primary care physicians are relying on a team-based approach to stay connected to their patients in their everyday lives. To support this, Humana is increasingly focused on augmenting the reach of primary care providers with in-home care services for recently discharged patients.

Beveridge notes that Humana is accelerating its investments in an integrated care delivery strategy, which encompasses supporting physician practices and care providers and leveraging technologies and clinical analytics to enhance the company’s holistic health approach.

Related Insights For: Value-Based Care


In Northern Virginia, Rethinking ACO Strategies—For PCPs and Specialists

October 30, 2018
by Mark Hagland, Editor-in-Chief
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Inova Health's Dr. Tricia Nguyen shares her perspectives on what she and her colleagues are learning about some of the underlying challenges in ACO work

With the U.S. healthcare system undergoing rapid, transformative change, one of the big unanswered questions is, what will happen to hospital-physician alignment over time? Many physicians, burdened by bureaucracy and practice management challenges, are fleeing into employment by hospitals or by large hospital-affiliated or hospital-owned physician groups, while others are entering into a variety of contractual relationships designed to keep them afloat in practice. In a sense, physician alignment is a sort of “wild card” in the emerging healthcare system. How will accountable care and value-based healthcare delivery and payment work—will physicians mostly participate in those arrangements simply as hospital and health system employees, or will they chart a different course, somewhere between the extreme autonomy they’ve had under discounted fee-for-service reimbursement, and straight hospital system employment? No one really knows for sure, and it appears that things could evolve forward distinctly in the diverse metropolitan and regional healthcare markets across the U.S.

Some of those issues were discussed in one of the articles in this year’s Healthcare Informatics Top Ten Tech Trends story package, in the third issue of this year, in the article “Markets and Medicine—Where Do Physicians Land, in the Emerging World of U.S. Healthcare?” And one of the industry leaders interviewed for that article was Tricia Nguyen, M.D., a senior executive at the Falls Church, Va.-based Inova Health System, and who came to Inova last year in order to help to lead and expand a clinically integrated network and joint-venture insurance company, that Inova had created with Aetna. “My title was CEO of Commonwealth Health Innovation Network,” she explains. “But as it turns out, I found within 30 days that we didn’t have much to scale, so I’ve been focused internally, and now lead our population health efforts under the title of senior vice president for population health.”

Tricia Nguyen, M.D.

Dr. Nguyen sees a host of challenges, as well as definite opportunities, in the near future, in terms of how to get physicians and hospital-based health systems on the same page, and aligned to partner for the emerging future of healthcare.

Speaking of the northern Virginia healthcare market in which the five-hospital Inova system has a significant market share, Nguyen says, “This market is in a bubble; 70 percent of the population is insured by some carrier, employer-sponsored generally,” she says. The system serves a very affluent population, with “double-income, double-degree families”; and Inova controls 60 to 70 percent market share in its area. Given that market dominance, she says, “For the system, there’s not a real pressure to change, but we saw a real opportunity in this joint venture with Aetna. Providers are still making a lot of money on the fee-for-service payment schedule, because so many of their patients are commercially covered, so they don’t have to deal with a lot of government products. Some family practice and internist physicians have a high percentage of Medicare, but many are no more than 50 percent Medicare. Many are 70 to nearly 100 percent commercial. So as far as fee for value, they’re worried about MIPS and MACRA, and they want help with that.”

The important revelation that’s emerging for her and her colleagues, Nguyen says, is the realization that physician alignment to date has been missing a key component. “The primary care physicians have essentially been doing value-based care for several years here, but only for the CareFirst population,” she says, referencing CareFirst, a regional BlueCross BlueShield company that offers a range of health plans across Maryland, the District of Columbia, and northern Virginia. “Have they changed practice patterns? A little bit, but not much.” And, importantly, she says, she and her colleagues are realizing that “Fuller value will come when we can identify the high-value specialists, those who are high-performing, low-cost, given the way they practice, and using them. That to me is the secret, and no one has that secret mastered quite yet. And that’s because the tools don’t really exist to help. I believe that ACOs are too focused on primary care, and that primary care has to bear the burden to drive down the costs of care, when in fact it’s going to take collaboration with the specialists. While care coordination is important for holistic health, to generate real savings, you’re going to have to drive down specialty care costs as well.”

Inova encompasses five acute-care facilities, and employs about 500 providers, about 120 of them primary care, the rest are specialists. Inside the broader umbrella of value-based contracting, Inova operates Signature Partners, an accountable care organization with about 34,00 lives, and with a clinically integrated network (CIN). Signature Partners has been in place for over three years. “This year, “Nguyen says, “we decided to split up into two ACOs; one is a high-performing Inova medical group; the other is the original ACO that we kept going. The 34,000 number encompasses both.

One of the challenges, Nguyen says, is that “The specialists are not yet thinking about value. But the primary care doctors have been on a semi-value journey. CareFirst has created a PCMH [patient-centered medical home] model and payment model for primary care, to keep them independent. They’ve been very successful in their model. They give PCPs a certain base, and it’s under Medicare rates. And if they deem you to be PCMH, they give you x bump in your fee schedule. Once you’ve met that, for the level of engagement and savings you generate, you get that dollar amount based on your engagement and quality, as a form of an additional increase in your fee schedule for the next year.”

One of the challenges, Nguyen notes, is around the geography of her organization’s service area. “CareFirst is a health plan. They’re in Maryland and cross over to northern Virginia. It’s interesting the relationship that CareFirst has with Anthem. There’s a Highway 123 in northern Virginia. And CareFirst does not cross 123, and neither does Anthem. The program that they’ve had in place since 2012, has created virtual pods with primary care physicians, where they aggregate them together and call them a pod, and have engagement leaders and care managers, and they’re incentivized to work with care managers from CareFirst. So the primary care physicians have essentially been doing value-based care for several years here, but only for the CareFirst population.” Thus, the moderate but still-modest change in practice patterns that has been elicited from that set of contractual relationships.

Is this an example of the proverbial “one foot in the boat, one foot on the shore” phenomenon that so many are witnessing in U.S. healthcare right now? “Yes, absolutely,” Nguyen says. The existence of so many different payment systems “has kind of forced the market to think this way. About 120 of our employed medical group has a large book of business with CareFirst, and so they act differently with those populations now. They treat them as though it’s a fee-for-service environment, but our own primary care practices within are also different. There was a practice we acquired about a year ago that’s probably the premier primary care group within CareFirst. They’re one of the most efficient; and I can say that because their operational incentive award amounts are very high, among the highest in CareFirst.”

Speaking of that specific group, Nguyen says, “When I look at their ACO performance per beneficiary spend, their target spend is on average about $7,500 at most; many could run $11,000 per member per year. The way they practice is just very different. They try to manage everything virtually, telephonically, etc. We’ve started to try to uncover and find areas of opportunity to spread across our medical group, but also across our CIN. Our CIN doctors don’t really have an incentive to change. We’ve been able to generate change within the group, but the MSSP has not generated savings, so I think they’re becoming a bit disillusioned.”

What is the secret of their success? “It’s really in identifying the high-value specialists, those who are high-performing, low-cost, given the way they practice, and using them. That to me is the secret, and no one has that secret mastered quite yet. And that’s because the tools don’t really exist to help. I believe that ACOs are too focused on primary care, and that primary care has to bear the burden to drive down the costs of care, when in fact it’s going to take collaboration with the specialists. While care coordination is important for holistic health, to generate real savings, you’re going to have to drive down specialty care costs as well. And we have about 100 cardiologists we employ; and in a population of 100,000, how many cardiologists do you need? I probably have 20 times the cardiologists I need; I’m just guessing about the precise proportion, but we have an oversupply.”

Given the complexity of that situation, what is the solution to the path into value? “The solution,” Nguyen says, “is that they’re going to have to start tiering their network—by physician and not by group. They’re stuck in contracting by group. CMS [the federal Centers for Medicare and Medicaid Services] and the private payers will have to get to the level of contracting at the individual specialist level. This is how contracts happen today—under the tax ID number; and the performance of the individual provider in a group gets mixed in with their peers. And so it’s impossible to get down to that level.”

So what can CMIOs, chief quality officers, and other health system leaders do, to promote change in this context? “They can engage in provider profiling at the MPI level,” Nguyen says firmly. “Health system CMIOs need to start thinking about hospital-based specialist performance data, and claims data, in a broader, more strategic context. Nobody’s done that yet. Everybody’s mired in the whole concept of integrating EHR [electronic health record] and claims data. But so far, integrating EHR and claims data has led only to more robust reporting on select measures, but it’s primary care-specific. There’s no integrated provider reporting across their EHR, practice management data and claims data, to understand specialty care.”

For example, Nguyen says, “Take a cardiologist who practices in the hospitals and also bills for services. There’s a set of activities they do in the inpatient space that could be integrated. For example, if a patient is admitted for an acute MI, does the cardiologist provide that care or does the cardiologist also bring other specialists in? If they’re in for an acute MI, they could manage the person’s condition with consultation with a hospitalist internist, with follow-up by a diabetologist, for example. But unless a person is in acute renal care, then they need acute care by a nephrologist. But that data that can measure and performance by that specialist is available in the hospital data; you can also see it in the claims data as well. But if you take the case of an orthopedic surgeon that does a procedure in the hospital, one surgeon could cost more than another based on the prosthetics and implants. But that data is wrapped into the DRG that the hospital gets paid, and the hospital gets dinged, not the physician. And so it’s not in the claims data.”

In other words, she says, “We need to think about whom we’re holding accountable for the cost of care. It’s a shared responsibility. You have to manage the referral network and guide members to the high-value specialist. There are some basic things they can do with chronic conditions; but they must collaborate with their specialist peers.”

Does Dr. Nguyen have any other advice for CMIOs and CIOs? “Yes,” she says. “Don’t over-invest in EHR data for ACO quality measures at this time; focus on claims data. Everyone dismisses claims data. Inova has over-invested in EHR data that hasn’t yet generated savings. Claims data will help generate savings. Measuring quality, EHR yes, but a lot can be done through claims, if they’d just use the G-codes. And ACOs today are the price-takers from the payers and plans; they really should be the price-makers. And say, it’s going to cost $300 PMPM [per member per month] and not say, I’m going to take a percentage of premium, because percentage of premium could be a very arbitrary number.”



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