Should MIPS be Repealed and Replaced? Several Industry Leaders Weigh in on MedPAC’s Published Proposal | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Should MIPS be Repealed and Replaced? Several Industry Leaders Weigh in on MedPAC’s Published Proposal

March 19, 2018
by Heather Landi
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There is no shortage of opinions, and criticism, about the Medicare Access and CHIP Re-Authorization Act (MACRA), the federal government’s payment program that aims to push providers to transition from volume to value. More specifically, many providers have voiced frustration with the performance measures under MACRA’s Merit-based Incentive Payment System (MIPS).

The Medicare Payment Advisory Commission (MedPAC), a nonpartisan legislative branch agency that provides the U.S. Congress with analysis and policy advice on the Medicare program, has been vocal about its concerns and criticism of MIPS, and is, in fact, recommending in its March report to Congress, which was made available to the public last week, that federal legislative leaders eliminate MIPS and replace it with an alternative model of reimbursement.

MedPAC submits two reports to Congress each year, in March and in June. Back in January, MedPAC voted 14-2 to recommend scrapping MIPS and replacing MIPS with a new clinician value-based purchasing program, called the Voluntary Value Program (VVP), and this proposal was included in the advisory group's recent report to Congress.

MedPAC’s approach to a new value-based purchasing program is to allow clinicians to self-organize into groups that collectively assume responsibility for their patients’ outcomes. Under the VVP, clinicians can elect to be measured as part of a voluntary group and clinicians in voluntary groups can qualify for a value payment based on their group’s performance on a set of population-based measures, according to the report. The VPP would measure all clinicians on the same set of measures—clinical quality, patient experience and value.

In its 563-page report (the section on replacing MIPS starts on page 475), MedPAC says that the Commission supports the elements of MACRA that repealed the sustainable growth rate (SGR) and encouraged comprehensive, patient-centered care delivery models such as advanced alternative payment models (A–APMs). However, the Commission has concluded that MIPS “will not fulfill its goals and therefore should be eliminated.”

MedPAC concluded, according to the report, “that the MIPS program impedes the movement toward high-value care. MIPS will not succeed in helping beneficiaries choose clinicians, in helping clinicians collectively change practice patterns to improve value, or in helping the Medicare program to reward clinicians based on value.”

The March MedPAC report also lays out the Commission’s additional concerns and criticism: MIPS imposes a significant reporting burden on clinicians (estimated by CMS as over $1.3 billion in the first year) and MIPS scores are not comparable among clinicians because each clinician’s composite MIPS score will reflect a mix of different, self-chosen, measures. MedPAC also contends that MIPS is complex and inequitable, with different rules for clinicians depending on location, practice size, and other factors; and it exempts more clinicians than will participate.

As much as clinicians dislike aspects of MIPS, many physician groups and industry associations disagree with the proposal to eliminate MIPS—indicating a sort of “better the devil you know, than the devil you don’t” mentality. Anders Gilberg, senior vice president for government affairs at the Medical Group Management Association (MGMA), said in a statement, “MedPAC’s March Report is an indictment of MIPS as implemented. However, its conceptual ‘VVP’ alternative lacks details. MGMA believes there are steps that can be taken now to reduce clinician burden. CMS can begin by shortening the 2018 MIPS data reporting period from one-year to 90 days in the same way the Agency did for Meaningful Use in 2014, 2015, and 2016.”

In a Healthcare Informatics podcast interview, which was recorded back in January, David Barbe, M.D., president of the American Medical Association, said that he believes it is “premature” to abandon MIPS at this point. “We do believe there are significant improvements and opportunities in the MIPS program, but we’re not quite ready to abandon it, we think that’s premature. We’re not that far along in to the second year of the program; it has not given us as an industry and as individual physicians time to acclimate to this program.”

Barbe added, “We’re concerned that the [MedPAC] proposal suggests that the primary way, if not the only way, is through group reporting, and while that has some advantages, forcing physicians into group reporting, or making that the only way one can participate in what I’ll generically call value-based programs, is probably not right. Our industry is not a one-size-fits-all industry. We have some reservations, but we’re waiting to see more details of the proposal.”

In the report to Congress, MedPAC concedes that many have argued that MIPS should be given a chance to succeed and that considerable resources have already been invested in the program. However, MedPAC stated, “MIPS will continue to consume limited CMS and clinician time and resources, and the burden of MIPS will outweigh its value to Medicare beneficiaries, the Medicare program, and clinicians. Progress in a more useful direction is feasible. MIPS should be eliminated, and a VVP should be established to encourage clinicians to move in a more productive direction.”

Tim Gronniger, senior vice president of strategy and development at Kansas City-based Caravan Health, a builder of accountable care organizations (ACOs), notes that MedPAC, in its report, gave voice to many of the concerns and frustrations that clinicians have about MIPS. “The core problem with MIPS is there is a disconnect between what clinicians feel like is important for their practice and what we can actually measure in the practice. Many feel that it’s a lot of work for not a lot of benefit to patients.”

Gronniger contends that physicians participating in ACOs are better positioned in a post-MACRA world as they can qualify for shared savings under the Medicare Shared Savings Program (MSSP) and often report on a prescribed set of measures. "Whereas in the regular MIPS program, clinicians just have to try to find the easiest measures to report on," he says. "There is fairly significant payment consequences on the line, starting at 4 percent based on 2017 performance, but getting up to 9 percent by 2021; it’s a lot of money for your practice potentially on the line. So, the strong incentive for many individual clinicians is to find the easiest measures to report on. That is the most damning problem that MedPAC latched onto, and one that I agree with.”

Prior to working at Caravan Health, Gronniger served as deputy chief of staff and director of delivery system reform at CMS under the Obama administration, where he was involved in writing MIPS, yet he is no stranger to the program’s flaws.

He notes that CMS was required by the law [MACRA] to give clinicians enormous choice in the MIPS program. “I think it’s an intractable problem with the current design of MIPS, and one of the reasons why, even though I don’t think Congress should go with MedPAC’s recommendation, I do think Congress is going to eventually need to revisit the structure of the MIPS program.”

Gronniger says he disagrees with MedPAC’s alternative program to replace MIPS, the VVP, because it builds on measure that are entirely claims-based. “MedPAC’s recommended approach relies on measures that are not well understood by clinicians and that haven’t worked very well so far. For example, the value modifier uses claims measures around measuring total cost of care for a hospital stay for a physician, which is called the Medicare spending per beneficiary member. Any given physician’s performance on a measure like this is going to vary. If you could roll up five years of claims data, then you might have confidence that performance on this measure means something. But if you have to wait five years, then it’s not a practical measure to use in a pay-for-performance program where you’re trying to create incentives between performance, or what you do in clinical practice, and what Medicare pays you.”

As it stands, Gronniger does not anticipate that Congress will follow MedPAC’s recommendation of repealing MIPS and implementing the proposed VVP.

“I do think Congress should be providing incentives for participating in alternative payment models that are more clear and provide more direction than what MIPS does right now. I think the MIPS program, as it now currently exists, is too burdensome, is not impactful and doesn’t drive any significant change that justifies the costs that are borne by practices participating in the program. So, to me, that means eventually Congress should get involved and fix it.”

Despite of any potential changes to physician payment models under Medicare, Gronniger contends that the Trump Administration has provided some clarity on the direction for payment reform going forward.

“I think that last year there was a lot of uncertainty around whether this Administration was going to keep payment reform moving, around whether the CMMI [Centers for Medicare and Medicaid Innovation] was even going to survive, and I think a lot of that uncertainty has been lifted. We’ve gotten more clear statements of support for payment reform from the Administration over the last month or so. They have a new bundled payment program out, BPCI Advanced. I think it’s going to continue to be a pretty small piece of the puzzle for payment reform and Medicare, but it shows that they are not abandoning the project of making sure that physicians have a good number of options for participating in advanced alternative payment models,” he said.

He also noted that it is going to become increasingly important for physicians and health system leaders to pay attention to MIPS as CMS is required to begin publishing, at the end of this year, all the MIPS scores for every participating physician, including those who are exempt. “Ratings organizations like Yelp or Angie’s List or Consumer Reports are going to pick up those numbers and use them to create star ratings or letter ratings. And, even though the MIPS score is not meant to be graded on an A, B, C scale, it’s going to be turned into that by groups that don’t really understand the way it works. So, physicians who are otherwise totally competent are going to be getting D or F grades, or incomplete grades, where they were used to being A students their entire life. That’s going to start to affect patent decision-making and patient self-referral behavior, for elective procedures, in particular.”

 


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When It Comes to The Big Debate on ACOs, What Is “Big Enough” Savings?

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The back-and-forth interaction between CMS Administrator Seema Verma and the ACO community is unfolding at a key inflection point in the evolution of the MSSP program

Intense debates on every subject are constantly swirling in the healthcare policy sphere; that has always been the case. But one debate that is both impactful and being closely watched is the intensifying argument between the Centers for Medicare and Medicaid Services, particularly CMS Administrator Seema Verma, and some leader organizations in the accountable care organization (ACO) area.

At its base, the proposal on the part of CMS, as outlined in a proposed rule published in August, to push more ACOs into two-sided risk, is being pushed back against by many ACO leaders, particularly by their nationwide association, NAACOS (the Washington, D.C.-based National Association of ACOs). As Managing Editor Rajiv Leventhal noted in his report Dec. 5, CMS’s “core aim” is “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.”

As Leventhal noted, “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.”

Clifton Gaus, Sc.D., NAACOS’s president and CEO, recently gave Leventhal an interview, and in that interview, he confirmed his association’s stance 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. Indeed, Gaus said in that interview that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

In fact, Gaus said, in polling their members, NAACOS’s leaders asked them whether they would in theory join a federal ACO program knowing that, at least at first, they would be limited to 25 percent of shared savings at most; and, in fact, “the near universal response was no, they wouldn’t have joined the program,” Gaus said, adding that “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 said.

Meanwhile, this morning, NAACOS issued a new press release focused on the value that the MSSP program has created for CMS. “In the latest data proving the financial benefits of accountable care organizations (ACOs), Medicare’s largest value-based care initiative – the Medicare Shared Savings Program – saved $859 million in 2016, an independent analysis published today shows,” the press release began. “Since 2013, the first full year of the program, ACOs have saved Medicare $2.66 billion, well above the $1.6 billion calculated by the Centers for Medicare and Medicaid Services (CMS).” What’s more, the press release reported, “After accounting for bonuses paid to ACOs for hitting spending and quality targets, the program, which accounts for 561 ACOs and 10.5 million patients nationwide, netted more than $660 million to the Medicare Trust Fund between 2013 and 2016, contrasting the net loss of $384 million CMS estimates.”

And the press release quoted NAACOS’s Gaus as stating that “These results are the latest data point in a growing body of evidence unequivocally proving ACOs’ value. ACOs are saving American taxpayers hundreds of millions of dollars at a time when it’s most needed.” Indeed,  he added, “Given the natural lag time in collecting and analyzing data and the well-established trend that ACOs need a few years to start demonstrating results, we are only seeing the beginning of the nation’s return on investment in accountable care. This data doesn’t even mention the quality benefits ACOs have generated, which have also been substantial.”

Further, the press release noted, “A sizable amount of recent data show ACOs are saving money: 472 Shared Savings ACOs generated gross savings of $1.1 billion and netted $314 million in savings to the Medicare Trust Fund last year; CMS’s August 17 proposed rule estimates the overall impact of ACOs, including ‘spillover effects’ on Medicare spending outside of the ACO program, lowered spending by $1.8–$4.2 billion in 2016 alone.”

So now we reach the rubber-meets-the-road place. Here’s the fundamental question: Do Seema Verma and her fellow CMS and HHS (Health and Human Services) senior officials truly understand the complexities involved in what they’re asking of provider leaders? Verma and her fellow federal healthcare officials are facing a kind of Scylla and Charybdis situation right now. On the one hand, as everyone knows, the Medicare actuaries have predicted that total U.S. healthcare spending will explode from $3.1 trillion annually (in 2014) to $5.4 trillion annually (by 2024), in the next several years, amounting to a 70-percent increase in less than a decade, and bringing the percentage of GDP spent on healthcare in this country from 17.4 percent in 2013 to 19.6 percent in 2024.

On the other hand, as Clifton Gaus and the NAACOS folks have pointed out, based on surveying their membership, patient care leaders are going to recoil at the over-intensification of change mandates coming out of CMS. That feeling is quite widespread. As one ACO CEO told me just two weeks ago, Seema Verma is deluded if she thinks that ramping up the downside-risk requirements in the Medicare Shared Savings Program is going to inspire more patient care leaders to join the MSSP program or renew their participation in it. And, as this morning’s press release notes, ACO community leaders are documenting real progress in capturing savings.

The million-dollar (or maybe, $1.1 trillion-dollar?) question is, is the broad level of savings that ACOs are netting for CMS, progress enough? Indeed, what is “enough”? And what is “fast enough”? Because Administrator Verma and her fellow senior federal healthcare officials seriously risk cratering the MSSP program, the core federal ACO program, if they push too hard on the downside-risk issue. On the other hand, if they don’t push hard enough, the progress made so far could simply be dwarfed, in the broader scheme of things, by the current acceleration of overall U.S. healthcare spending inflation.

So right now really does feel like an inflection point—but one without an obvious resolution. Only time—and the interactions of federal healthcare officials and providers—will tell.

 

 

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At UPMC, Turbo-Charging Quality Improvement Efforts through Data Analytics

December 11, 2018
by Mark Hagland, Editor-in-Chief
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At UPMC, Dr. Oscar Marroquin is leading a team of data analysts whose work is facilitating intensive efforts around readmissions

At a time when the leaders of patient care organizations are facing intensifying pressure to shift away from a dependence on volume-based payment and to plunge into value-based care delivery, some U.S. hospitals, medical groups, and health systems are helping to lead the way into a future of continuous clinical improvement and of clinical transformation. That topic—of organized continuous quality improvement—was the subject of the fourth-quarter 2018 Healthcare Informatics cover story. Numerous leaders of pioneering organizations were interviewed for their insights into the health system change focused-quality improvement movement that has been emerging across the U.S. healthcare system.

Among the leaders interviewed for that cover story was Oscar Marroquin, M.D., a practicing cardiologist and epidemiologist, who is helping to lead a team of clinical data experts at the vast, 40-hospital UPMC health system in Pittsburgh. Dr. Marroquin and his colleagues have been busy harnessing the power of creating and nurturing purpose-specific teams focused intensively on the management of data to power performance improvement, particularly in the clinical area. Marroquin’s team, of about 25 data specialists, was first created five years ago. Of those, half are IT- and infrastructure-focused, and, says Dr. Marroquin, “The rest are a team of folks dedicated to data consumption issues. So we have clinical analysts, data visualization specialists, and a team of data scientists who are applying the right tools and methods, spanning from traditional analytical techniques to advanced computational deep learning and everything in between. Our task is to use the clinical data, and derive insights”—and all 12 clinically focused data specialists report to him.

And that work—“allowing people to ask questions to generate opportunities”—has paid off handsomely. Among the advances has been the creation of a data model that predicts the chances of patients who are being discharged, being readmitted. The model, based on the retrospective analysis of one million discharges, is also helping case managers to more effectively prepare patients for discharge, specifically by ensuring that patients being discharged are promptly scheduled for follow-up visits with their primary care physicians. “If those patients are seen within 30 days of discharge,” he notes, “there’s a 50-percent reduction in their 30-day rate of readmission.” The program is now active in six UPMC hospitals.


Oscar Marroquin, M.D.

Below are excerpts from the interview for that cover story that Healthcare Informatics Editor-in-Chief Mark Hagland conducted with Dr. Marroquin this summer.

From your perspective, what does it really mean to be data-driven, in the pursuit of continuous quality improvement and clinical transformation?

From my perspective, I’m very passionate in that I feel that you really can’t do any of the things that doing in terms of moving towards value, without having a robust data infrastructure, a robust strategy on how to use data and analyze it, and without then deriving evidence for how you’re going to transform your organization. There are a lot of buzzwords involved in all of this, but the only way to get from a buzzword to a true action of transformation, is if it’s data-driven.

I’m a cardiologist by training and an epidemiologist; I still practice. Over the past five or so years, I’ve been asked to oversee how we’ll derive insights from clinical data in our system; in other words, this work is around anything related to big-data analytics, with those analytics being used to help our clinicians. In order to do that, we’ve had to do many different things, including more intelligently aggregating our data, and focusing on specific analytical purposes. They’ve been structured as databases for transactional systems, but not with the intent of improvement.

So we’ve spent a lot of time creating a purpose-built environment for analytics. That’s involved a lot of technical work, to create tables, what we call our consumable layers, for analytical purposes. And we’ve created a team whose only job is to do analytics. We’ve had folks in the past managing back-end databases, who have generated reports, but that doesn’t lead to a sustainable way of using data. And so we have a team that is dedicated to maintaining the warehouse and consuming the data.

With regard to the team of 25 data analysts, do all of them report to you?

The 12 who do data consumption report directly to me; the others have a dotted-line report to me. They sit on our infrastructure team within our IT Information Services Division. Both teams are part of the Clinical Analytics Team. Data analytics—Health Services Division. Integrated team. Two sides of the same coin.

When did these teams come together?

There have been different phases. The analytics program development started in 2012, and we learned a lot of lessons. A lot of the work early on had to be dedicated to technical issues—identifying data sources, etc. That was a pretty labor-intensive process. We really got enough aggregated data to use it consistently in 2015, so from 2015 on, we’ve had this structure of teams dedicated to doing this as I’ve described.

Can you share a few examples of key advances that your team has made so far?

When asked what our team does, I tell folks we do work at the higher level in three different buckets. The first bucket is the entry point for the majority of projects. Not everybody in the system necessarily knows which questions to ask.

We allow people to ask questions to generate opportunities. Off of that, two things will happen. One, hypotheses can be generated, and so we can do hypothesis testing, we can do comparative effectiveness studies, we can formal testing of hypotheses. Also, when insights get generated, one can say, oh boy, there’s a lot of heterogeneity in this population, why is one group more at risk? So we can identify who is at high risk of a condition, and who within the high-risk category is at high risk of developing specific conditions? And the third level or bucket, we apply machine learning and AI tools to develop models that allow us to do a variety of things, from more precise phenotyping of our populations; we can build predictive models to identify patients at various levels of risk. And we also use these models to do unsupervised learning, where we can start to generate hypotheses. So most people in this space love to talk about the latter part, the predictive modeling, and we have done a fair amount of work there, with things like identifying patients at highest risk of rehospitalization after 7 or 30 days of discharge, and we’re using that in our hospitals to guide clinicians. There are resources everywhere.

So we developed a model derived out of retrospective analysis of one million discharges, and we’ve prospectively verified that the model allows us to identify patients at the highest risk of readmission, so our case managers can help us identify plans to help those patients transition from hospitalization to post-acute care in a more effective way. And we see that if they’re seen within 30 days of discharge, there’s a 50-percent reduction in their 30-day hospitalization if they get in to see a clinician. So we make sure that the patient has an appointment made and is ready to see their doctor once they’re discharged, to address any issues.

When was that program put into place?

We spent a lot of last year validating the data. And then this year, we started rolling this out to our hospitals in a phased approach, so throughout 2018, we’ve been deploying this to our hospitals, and we’ve trained and educated different hospitals to use the model, and we’re actively following patients to measure the impact of the tool. And as an epidemiologist, I’m always cautious about declaring victory too soon. We’re seeing good trends, our smaller hospitals are seeing decreases in patients coming back early.

So you don’t have any metrics to share yet?

We have three hospitals, smaller ones we started the program with first, that different units, have shown that this program has had an impact. The numbers are still small enough that I have reservations about absolute certainty. But already, we’re using the program in 20 of our hospitals.

What would your advice be for CIOs, CMIOs, and other healthcare IT leaders, as they consider these kinds of initiatives?

If we all are serious about transforming the way we care for patients, we need to do it in a data-driven way. There has to be a philosophical belief and commitment to do that. Number two, as a result of the institutional commitment and philosophy, then there has to be a team that’s dedicated to this work. I don’t think this is achievable in an ad hoc way, when people just have time. And three, it’s not for the faint of heart; it takes time and effort, but if you have the philosophical belief and institutional commitment, it’s doable. If I say to myself, I don’t ever want to leave my house and get drenched because I wasn’t prepared for a storm, then I need to check the weather app before I leave my house. In medicine, we haven’t yet taken that approach, but the data and analytics are there to guide us in helping us to make decisions, and making it a part of the everyday decision-making process. And in the same way I use examples of rehospitalization prediction, we also do condition-specific predictive analytics, around patients with asthma, kidney disease, etc., so there’s a lot of work going on there. And the message I give clinicians is, there will be companies that say they don’t’ sell you the predictive models they’ve developed; but in our experience, the models have to be a part of an organic process that leads to the building of the models. Clinicians won’t feel alienated, disenfranchised, or threatened, if you bring them in and engage them from the beginning.

 


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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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