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At the HIT Summit in Raleigh, a Health Plan Executive Points to the Future of Value-Based Care

October 8, 2018
by Mark Hagland, Editor-in-Chief
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Speaking at the HIT Summit in Raleigh last month, Humana’s Ben Lunsford offered attendees insights into the future of value-based healthcare, and his health plan’s future intentions

Speaking at the Health IT Summit in Raleigh, held September 27 and 28, and sponsored by Healthcare Informatics, Ben Lunsford, vice president, value-based strategies, at the Louisville-based Humana, offered attendees insights into the future of value-based healthcare and the trajectory of value in the current U.S. healthcare system.

Lunsford spoke on the topic “Humana’s Value-Based Strategy,” on Friday Sep. 28 at the Summit, which was held at the Washington Duke Inn & Golf Club, on the campus of Duke University, in Durham. As of 2014, according to the Wikipedia entry on the company, Humana had over 13 million customers in the U.S., and 41,146 employees as of 2018, and net income of $2.448 billion on revenues of $53.767 billion, in 2017.

Lunsford, who is based in Birmingham, Alabama, and has been at Humana for 14 years, focused on the company’s Medicare Advantage (Medicare managed care) business, which encompasses 3.5 million members; in addition, the health plan counts 1.5 million commercial group members and 5.9 million military members.

As Lunsford shared in his presentation, “Value-based care is different from the current fee-for-service (FFS) model of care, which simply pays for the number of services a patient receives. These services include physician and hospital visits, procedures and tests. While value-based care pays physicians for these services, it also includes more pay for meeting quality measures, coordinating care, preventing repetitive treatments, controlling overall costs and improving health outcomes.”

Lunsford proceeded to share with his audience the Primary care Value-Based Continuum model that Human has been executing, in its contracting with primary care physicians. It consists of four stages of development, with intensifying contracting features from one to the next. In order from least to most advanced, they are: the “Star Rewards” program, model practice program, medical home program, and full-value program.

In the Star Rewards program, primary care physicians have their outcomes evaluated using HEDIS-based quality metrics, with an annual payout benefit calculated in terms of a percentage of claims opportunity. In the model practice program, both HEDIS-based quality metrics, and clinical measures developed by Humana medical managers, are employed, and the rewards to primary care physicians involve a quarterly shared savings opportunity. The medical home model involves primary care physicians working in medical groups that have received some official form of recognition as patient-centered medical homes; those physicians are eligible for a PMP (per member per month) care coordination opportunity, with increased financial incentives. And finally, the full-value program involves monthly PMPM global capitation.

The Star Rewards Program this year has been using very well-known measures, such as breast cancer and colorectal screening rates, nephropathy screening rates and hemoglobin a1c control measures for diabetics, medication adherence rates for hypertensives, etc. PCPs are asked to meet six of nine NCQA (National Committee for Quality Assurance) HEDIS (Healthcare Effectiveness Data and Information Set) measures; practices that achieve that goal receive a 12-percent bonus paid annually.

Meanwhile, incentives accelerate both in terms of amounts of money, and pay schedules, as PCPs move into more advanced programs. Those in the Model Practice Program who meet quality measure standards (which are more extensive and include a readmission rate measure) receive $8 PMPM quarterly. Then, as they advance to the Medical Home Program, PCPs can participate in shared savings with Humana. And of course, for the PCPs ready to advance to the most advanced model, full capitation, those physicians will be participating in a model that is continuous in payment differentials.

Humana is also developing bundled payments in specific areas of specialty care, beginning with total joint replacements.

Speaking of all these models, Lunsford told his audience, “The patient experience of healthcare can seem fragmented. It can be frustrating for the health consumers. Ultimately, care delivery needs to be integrated rather than episodic, and focused on coordinated care and overall population health. This transition from volume to value is critical in enabling the shift to this integrated healthcare model, which… will allow us to have a sustainable healthcare system.”

It is of course no accident that Lunsford put the main focus of his comments on primary care physicians, who, he said, have the most influence on the health outcomes of patients. “Outside of direct care,” which itself is a huge part of all of this, he noted that PCPs “have an amazing amount of influence on the integrated care model; they’re the ones deciding which specialists to send patients to; providing needed prescriptions; educating patients on wellness. They’re our quarterbacks of care.”

That said, he continued, “Meanwhile, likewise, the patient has an amazing amount of influence on their own care. They’re the decision-makers. They’re deciding to engage in wellness and disease management programs; they’re deciding to be with a payer or a provider, based on the care they get. It’s absolutely critical to making the integrated care model succeed. And lastly, as a health plan, we bring an amazing amount of resources to the table, including a considerable amount of data. With that data, our historical picture of a transactional relationship is changing. We’re developing data to help physicians; we provide care referral and insights to physicians; and we can provide health and disease management programs, and care delivery options for where patients want to receive care, which oftentimes, is in the home. So we all bring something to the model.”

Though most of his time was focused on primary care physicians, and secondly, on plan members/patients, Lunsford did share about Humana’s new program, initiated on January 1, focused on hospitals, its Hospital Incentive Program. As described in his presentation, “The Humana Hospital Incentive Program (HIP) provides hospitals with an opportunity to participate in a value-based program that recognizes hospitals’ continuous patient improvement efforts, via earned annual incentive.”

The program provides annual incentives for hospitals based on performance in the areas of patient experience, patient safety, and patient outcomes. Among the specific measures included are a hospital’s HCAPHS (Hospital Consumer Assessment of Healthcare providers and Systems) scores; healthcare-associated infections; care coordination; palliative care; readmission rates, and average lengths of stay. The various measures are individually weighted, collectively totally 100 percent of the eligible incentive.

“We’re not only experiencing a seismic shift in the approach to integrated care, but also in the way we reimburse for it,” Lunsford told his audience, as he explained Humana’s value-based payment program. Meanwhile, he added, “Brand loyalty is another component of value. We make as consumers a choice around value in every purchase we make.”

Indeed, Lunsford said, “Humana’s primary care value-based continuum is truly the cornerstone” of the company’s strategy. And he noted, it is purposely “structured as a continuum: participants can move into the model. From Star rewards, to model practice, to medical home, to full value. As providers progress down that path. Each program builds upon the previous one. Star rewards just starts with quality; that continues forward into the other stages.” What’s more, he said, “This ability to enable and encourage, but not mandate, progression down that path to full value, is something that we find very valuable.”

Meanwhile, after explaining about the measures being used in the health plan’s programs, Lunsford said, “I often hear, why can’t payers get together and focus on the same set of measures? Wouldn’t that be a perfect world? I agree. But we seek guidance and counsel from many providers. And we also look at things like prevalence? Is a particular condition prevalent? We look at the PCP’s ability to impact the measure. And we look at things like our ability to measure. You’ll notice on the right that some of the measures are relatively binary. Did something occur or not? That is one factor. Also, the priority CMS places on us from the point of health plan scoring, influences us, too.”

Further, he said, “Let’s talk a little bit about how we set payment models. There’s a value placed on the achievement of certain measures. And it’s a delicate ballet between behavioral, actuary, and our clinical leaders, to determine what the best amount is that we can set. Second is the competitive element. If we pay you a dollar for something and Blue Cross or Aetna pays you five dollars, who will you focus on?”

Meanwhile, Lunsford noted of the model practice program, whose participating physicians are delivering care to 37 percent of Humana’s Medicare Advantage population, “Each measure has an incremental dollar amount assigned to it.” What’s more, he noted, elements such as ER utilization, readmission rate, and patient experience, that are being measured. Meanwhile, the measures used in the medical home program, the next step up, match those measured in the model practice program.

When it comes to medical specialists who contract with Humana under Medicare Advantage, they can participate in bundled payments around total joint replacement; and specialists participating in commercial insurance with Humana can participate in a maternity program.

As for the Hospital-Incentive Program that Humana launched in January, Lunsford noted, “We partnered with the Joint Commission on developing this model and a couple of its measures. It centers around the patient experience, patient safety, and patient outcomes, with, as mentioned above, six key measures: HCAHPS score; healthcare-associated infection; care coordination; palliative care; readmission rate; and average length of stay.

“We continually evaluate the care our members are receiving through value-based payment models,” Lunsford told his audience; and Humana executives plan to “aggressively” push value-based payments going forward. Meanwhile, he touted the fact that “Sixty-six percent of our Medicare Advantage members are now in some sort of value-based arrangement.”

Following his presentation, Lunsford spoke with Healthcare Informatics Editor-in-Chief Mark Hagland. Below are excerpts from that interview.

Can you say what percentage of all members are in value-based arrangements?

As of June 30, 2018, Humana has approximately two million individual Medicare Advantage members and approximately 130,000 Group members who are cared for by more than 52,000 primary care physicians in more than 1,000 value-based relationships across 43 states and Puerto Rico.

Understandably, much of your presentation focused on your arrangements with primary care physicians. Can you speak to your goals around contractual arrangements with hospitals?

The tie for us between a member or patient, the one responsible for care in value-based models, is the primary care physicians. To be sure, that PCP can be employed by or affiliated with a hospital or integrated health system, and we’ll still interact with that physician in the same way.

Can you speak to changes in the physician culture that are making physicians more amenable to entering into value-based contracting arrangements? Do you see progress accelerating?

Yes, I think so. Just by the sheer fact that we have 66 percent of our Medicare Advantage members in those value-based arrangements, shows that this concept of value-based is not going away; and it’s becoming more solid.

Are physicians more hip to what’s going on than a few years ago, in terms of the trajectory of the overall healthcare system?

Absolutely.

Can you speak to physicians’ preparedness to participate in measurement programs?

There is a wide array of capabilities in that space. And as a payer, we have to be able to meet those providers where they are in that capability space. Our Carebook team manages that digital interface.

Can you speak to physicians’ success, to date, in working with you in those measurement arrangements?

An early understanding of where their opportunity is, in terms of quality improvement—understanding where those gaps exist, and the tools that exist to address those gaps, early on as possible, is the most important element.

In what direction do you see your programs heading, over time?

We’d love to see an increase in participation, even at 66 percent now. We want all the groups in those programs to be successful. All three of us—the patient, the provider, and the health plan—all win, when they’re succeeding in these programs. So, growth, success, and I would say, expansion; so as we look at other value-based models, that’s a critical focus for these programs.

Can you say a few words about the hospital-based program?

Yes. This is our first program we have focused on improving quality delivered in the inpatient setting. Incentive arrangements are relatively new, and of course, new to Humana. Our number-one goal there aligns with the goals of our primary care programs, and that is being focused on hospitals succeeding in all the measures we’ve stablished in the program.

Can you say how many hospitals are participating so far?

We’ll release that number soon.

Is there anything you’d like to say to the healthcare IT leaders in our audience?

Recognizing the capabilities and influence that we all have in interacting together to help this model succeed, that’s crucial. The cooperation of everyone to help drive success, is critical.

 

 

 


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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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Report: Complex and Rapidly Changing Payment Models Challenge Physician Practices

October 26, 2018
by Heather Landi, Associate Editor
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Physician payment models are becoming more complex and the pace of change is increasing, creating challenges for physician practices that might hamper their ability to improve the quality and efficiency of care despite their willingness to change. Those are among the findings of a new joint study by the RAND Corporation and the American Medical Association (AMA).

RAND researchers examined how alternative payment models (APMs)—payment models other than fee-for-service—have affected physician practices. For the report, “Effects of Health Care Payment Models on Physician Practice in the United States: Follow-Up Study,” researchers interviewed and surveyed physicians and other staff in 31 practices in six markets, including a variety of practice sizes, specialties, and ownership models.

The work was a follow-up to a 2014 study that also examined APMs’ effects on physician practices. Whenever possible, researchers re-interviewed the same physicians and practice leaders that participated in the previous study, according to a press release about the study.

“The complexity and pace of change in how physicians are paid for their services has required practices to spend substantial resources just to keep up with program details,” Mark W. Friedberg, M.D., the study’s lead author and a senior physician policy researcher at RAND, a nonprofit research organization, said in a statement. “While the practices in our sample generally voiced support for the goals of alternative payment models, these implementation challenges could make it difficult to achieve them.”

The study findings suggest that physician practice engagement with APMs would be enhanced by simpler APMs (to help practices focus on improving patient care); a more stable, predictable, and gradual pace of change; greater support for new capabilities and timely data; and reexamination of how practices might respond to APMs that involve downside financial risk.

Study Results

APMs are changing how physicians are compensated for the care of their patients to create stronger incentives for efficient, high-quality medicine. They often involve either bonuses for meeting quality goals or penalties for falling short.

In this latest study, researchers found that several trends have persisted since the 2014 study. Namely, practices have adopted new capabilities to respond to APMs. These included behavioral health capabilities, data analytic infrastructure, and information technology. Similar to the 2014 study results, the latest study found that practices substantially modified APM financial incentives before passing them through to frontline physicians. Individual physician incentives based on costs of care were rare, even within practices with strong cost-containment incentives from payers, according to the latest study.

“Despite engagement with new APMs, most practices reported that internal financial incentives for individual physicians had not substantially changed since 2014. Modest bonuses for quality performance remained common, and with the exception of small, independent practices (for which physician-owner incentives were inseparable from practice-level incentives), individual physician financial incentives based on costs of care were almost nonexistent,” the study stated.

As in the 2014 study, practice leaders deployed a range of nonfinancial strategies to influence physician decision-making, such as internal performance reports, that appealed to physicians’ competitiveness and self-esteem.

Researchers found that all the challenges described by respondents in 2014 persisted in the current study. In particular, issues related to data continued to constrain practices’ ability to understand and improve their performance. As in 2014, many physician practices -- especially those that are small and independent -- reported that they lacked the skills and experience with data management and analysis that are needed to perform well in alternative payment methods, according to the report. Building in methods to help these practices master the use of health data would improve the potential success of many alternative payment methods.

Operational errors in payment models also continued to be a source of frustration for physician practices, at times with financial consequences, according to the report.

“In some cases, these negative experiences reduced practices’ future willingness to participate in alternative payment models, even when offered by different payers. Because physician practices typically participated in multiple payment models from a variety of payers, challenges related to interactions between payment models also persisted,” the report stated.

Researchers also identified new findings regarding APMs. Across the markets studied, leaders perceived an acceleration in the pace of change in alternative payment models from both private insurers and government programs since 2014, at least partially driven by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program.

Sudden or unexpected discontinuations of APMs were particularly challenging for physician practices and other market participants that had made commitments or investments under the assumption that APMs would continue, according to the latest study.

APMs have become more complex, due to an expanding number of performance measures and uncertainty concerning performance thresholds for penalties and rewards, the respondents reported. Practices reported that understanding complex new payment models often entailed a significant resource investment. Some practices used their knowledge of complex APMs to receive more credit for their preexisting quality without materially changing patient care.

What’s more, physician practices have become more averse to APM downside financial risk. Risk aversion was especially prominent among practices that had previously experienced losses in APMs or that were inexperienced in managing risk. Some practices responded to APMs, the report stated. “In some cases, practices renegotiated contracts with payers to reduce their excessive downside risk or transfer some of that risk to partners such as hospitals or device manufacturers,” the researchers wrote.

“Physicians tell us that it’s more difficult than ever to understand the growing complexity of payment models and they are straining against a conflicting muddle of public and private value-based policies and rules that are continually in flux,” AMA president Dr. Barbara L. McAneny, said in a statement. “The resulting administrative burdens take physicians away from patient care. Today’s report is a call to action to align multiple payers and payment models with consistent measures aimed at improving patient care. It is clear the long-term sustainability of payment reform hinges on value-based payment models that must be operationally and financially sound, sustainable over time, aligned across payers, and must work for physician practices and patients. The AMA is committed to spearheading and engaging these efforts.”

In addition to finding ways to reduce the complexity of alternative payment methods, study findings suggest that a slower and more-predictable pace of change might benefit medical practices, payers and other stakeholders.

As in their previous study, researchers found that physicians were broadly supportive of alternative payment methods that enabled their practices to make noticeable improvements in patient care. They voiced satisfaction with clinical improvements, even when they did not result in financial bonuses.

However, when the alternative payment methods created new reporting and documentation burdens or when they created no perceptible improvements in patient care, physicians reported disengagement and skepticism, according to the report.

Allowing practicing physicians and other practice leaders to help design alternative payment methods might help improve physician engagement and improve the likelihood that such strategies will produce improvements in patient care, according to the report.

The study findings are intended to help guide system-wide efforts by the AMA, which sponsored and co-authored the study, and other health care stakeholders to improve alternative payment models and help physician practices successfully adapt to the changes.

 

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Lawmakers Urge CMS to Modify Final Medicare ACO Regulation

October 24, 2018
by Heather Landi, Associate Editor
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Lawmakers' concerns mirror concerns expressed by nine stakeholder groups in a similar letter sent to CMS last month

A bipartisan group of nine lawmakers today sent a letter to the Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma asking for two key changes to the agency’s recently proposed rule that would reform the Medicare Shared Savings Program (MSSP).

Specifically, the lawmakers asked that CMS reconsider proposals to cut the time new accountable care organizations (ACOs) have in shared savings-only models from six years to two and to decrease the shared savings rate from 50 percent to as low as 25 percent.

Lawmakers on the list include Reps. Diane Black (R-Tenn.), Peter Welch (D-Vt.), Suzan DelBene (D-Wash.), Gene Green (D-Texas), David Roe, M.D. (R-Tenn.), Greg Gianforte (R-Mont.), Tom Reed (R-N.Y.), Brad Wenstrup, M.D. (R-Ohio), and Roger Marshall, M.D. (R-Kans.).

In August, CMS proposed sweeping changes to the MSSP, by far the largest federal ACO model, with 561 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs (accountable care organizations) ought to move more quickly into two-sided risk payment models so that Medicare isn’t on the hook for money if the ACO outspends its financial benchmarks.

Specifically, CMS is proposing to shorten the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years. This proposal, coupled with CMS’ recommendations to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs—will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

In the letter, the nine lawmakers said they share CMS’s goal to ensure the ACOs under the voluntary MSSP continue to generate savings for the Medicare program and move healthcare providers toward risk and value-based models.

The lawmakers also noted that as the healthcare industry moves forward in implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), “it is imperative that MSSP ACO participation remain a workable option because MACRA’s fundamental structure is premised on the ability to participate under an Advanced Alternative Payment Model track, which primarily includes ACO models.”

The lawmakers also praise a number of improvements in CMS’ recent proposal to the MSSP program, including opportunities for reduced regulatory burden, increased beneficiary engagement and greater predictability and stability through longer agreement periods.

However, the lawmakers expressed concern with CMS’ proposal to shorten the glide path for new ACOs to assume financial risk from six years to t wo years, and to cut shared savings rate from 50 to 25 percent, specifically noting that the proposals will “have the unintended impact of impeding new ACO entry.”

“To ensure that ACOs have a sufficient business case to participate in this voluntary program, we urge CMS to modify these proposals in the final rule.

In the letter, the lawmakers also cited 2017 data from the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) that found that ACOs achieved high quality, and in particular, noted progress on important measures, such as reduced hospital admissions and screening beneficiaries for risk of falling and depression. “By CMS estimates, in 2017, 472 MSSP ACOs caring for 9 million beneficiaries participated in the MSSP, generating gross savings of $1.1 billion and an estimated net savings of $314 billion. This is consistent with independent research: a new actuarial study found that ACOs saved $1.8 billion from 2013 through 2015 and reduced Medicare spending by $540 million.”

Further, the lawmakers wrote, “peer-reviewed studies by Harvard University researchers have found that the MSSP saved more than $200 million in 2013 and 2014 and $144.6 million in 2015 after accounting for shared savings bonuses earned by ACOs.”

The lawmakers’ concerns mirror concerns expressed by nine stakeholder groups in a similar letter sent last month. The National Association of ACOs (NAACOS) and eight other healthcare stakeholder groups expressed concerns about CMS’ proposals to reduce the time new ACOs have in shared savings-only models from six to two years and to decrease the shared savings rate from 50 percent to 25 percent. The letter urges CMS to instead allow more time for ACOs in a shared-savings only model and to apply a shared savings rate of at least the current 50 percent to ensure a viable business model.

Those stakeholder groups wrote, “The MSSP remains a voluntary program, and it’s essential to have the right balance of risk and reward to continue program growth and success. Program changes that deter new entrants would shut off a pipeline of beginner ACOs that should be encouraged to embark on the journey to value, which is a long-standing bipartisan goal of the Administration and Congress and important aspect of the Quality Payment Program.”

Clif Gaus, president and CEO of NAACOS, noted about the lawmakers’ letter, “These lawmakers understand that CMS’s proposed push to risk offers too little time and not enough opportunity for ACOs to recoup investments and threatens to cut off a pipeline of providers hoping to start the transition to value-based care,”. “NAACOS supports the move to risk, but the move needs to carefully balance incentives so not to endanger the bipartisan goal of lower-cost, higher-quality care, which ACOs have proven to help achieve.”

“Overcoming the fragmentation and volume orientation of the fee-for-service program can best be achieved by moving more providers toward greater accountability for the quality and total cost of care, as ACOs are designed to do,” Blair Childs, senior vice president of public affairs of Premier Inc., said in a statement. “Premier applauds congressional efforts to ensure that the Medicare Shared Savings Program supports providers that are making extensive investments in coordinated care models, and are working in good faith to move toward two-sided risk. This is an effort that takes time, and we should be looking to accelerate, not discourage, these efforts, particularly since they are solving many of healthcare’s biggest cost, quality and population health challenges.”

It remains to be seen how CMS will respond to the pushback from NAACOS and others of late, though up to this point CMS has taken a firm stance that upside risk-only ACOs have not been effective. Thus, the federal agency seems to be fine with these ACOs leaving the MSSP if they are unwilling to take on more risk.

 

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