Assessing CMS’s Risky Move on Risk: Has Seema Verma Pushed MSSP ACOs Into Uncharted Territory? | Mark Hagland, Editor-in-Chief | Healthcare Blogs Skip to content Skip to navigation

Assessing CMS’s Risky Move on Risk: Has Seema Verma Pushed MSSP ACOs Into Uncharted Territory?

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Will Seema Verma’s August 9 announcement light a fire under the MSSP program ACOs—or will it cause them to flee?

Though not entirely unexpected, the announcement last Thursday evening (August 9) by Administrator Seema Verma and her fellow senior officials at the federal Centers for Medicare and Medicaid Services (CMS) nonetheless created quite a stir within patient care leaders in U.S. healthcare. As Managing Editor Rajiv Leventhal reported that evening, “The Centers for Medicare & Medicaid Services (CMS) is proposing a new direction for ACOs (accountable care organizations) in the Medicare Shared Savings Program (MSSP), with the goal to push these organizations into two-sided risk models.”

Leventhal went on to note that this new proposal, named “Pathways to Success,” which had been anticipated for months, “looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

Right now, Leventhal pointed out, “[T]he MSSP model includes three tracks and is structured to allow ACOs to gain experience with the program before transitioning to performance-based risk. The vast majority of Shared Savings Program ACOs have chosen to enter and maximize the allowed time under Track 1, which is an “upside-only” risk model. MSSP Tracks 2 and 3 involve downside risk, but participation in these tracks has been limited thus far.” And that is in this context: “Broadly, CMS is now essentially proposing that the contract agreements of upside-only ACOs be two years, rather than allowing six years (two, three-year agreements) like the government has previously permitted. Overall, there are 561 MSSP ACOs out of 649 total Medicare ACOs, with 82 percent of those 561 MSSP ACOs taking on upside risk only.”

In other words, Verma and her fellow CMS officials are banking on the proposition that they can compel/force hospital, medical group, and health system leaders to move quite quickly from upside risk to upside/downside risk, and not simply drop out of the MSSP program.

So, just how risky (pardon the embedded pun) is that gamble on the part of Verma and CMS? Well, the proposal has elicited quite a range of responses from the industry in the past few days. But, as Leventhal reported on Friday, one very major player in this landscape, NAACOS—the Washington, D.C.-based National Association of ACOs—is pretty much hopping mad, calling the proposal “misguided,” and noting that the changes, if finalized, “will upend the ACO movement by creating havoc with a significant overhaul introducing many untested and troubling policies.” In the policy world, that’s about as close as one gets to tweeting in all capital letters.

As Leventhal wrote on Friday, “Much of the discussion following the rule’s release will likely center around the BASIC track, which essentially limits ACOs to stay in “upside-only” risk models for just two years, compared to the existing allowance of six years. What’s more, those ACOs in an MSSP Track 1 upside-only model would only be able to get 25 percent of any savings they take in, compared to 50 percent, which is the current max.” What’s more, he noted, “When ACOs are in a one-sided risk model, they do not share losses with the government when they overspend past their benchmarks, but they do share in the gains. As such, in these one-sided risk models, CMS is on the hook for any losses all on its own.”

NAACOS issues forceful comments

In its Friday press release condemning the “Pathways to Success” proposal, NAACOS stated that “The downside financial risk for patient care would be on top of the significant financial investments ACOs already make, according to [NAACOS president and CEO Clif] Gaus, jeopardizing years of effort and investment to improve care coordination and slow cost growth.” And the press release quotes Gaus as stating that “CMS discusses creating stability for ACOs by moving to five-year agreements, but they are pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices.”

Indeed, NAACOS notes in its press release that “CMS predicts fewer ACOs participating in the future, beginning with the 2019 performance year.” And it adds that “NAACOS repeatedly has voiced concerns about forcing ACOs to take downside financial risk before they are ready, advocating instead that ACOs that demonstrate certain cost and quality achievements may remain in the one-sided model. A NAACOS survey earlier this year of ACOs required to move to an ACO model with downside financial risk in 2019 showed that more than 70 percent of responding ACOs are likely to leave the program if forced to assume financial risk. Given the proposals put forth today, 70 percent could be an underestimate, with even more ACOs leaving the program.”

Nor was NAACOS alone in its strong condemnation of the proposal. The Chicago-based American Hospital Association (AHA) also released a statement on Friday, with the nation’s largest hospital association attributing its statement to executive vice president Tom Nickels. Nickels was quoted as stating that, “While we acknowledge CMS’s interest in encouraging providers to more quickly move toward accepting risk, drastically shortening the length of time in which ACOs can participate in an upside-only model ignores the reality that providers are starting at vastly different points and will have vastly different learning curves when moving toward value-based care.”

Indeed, Nickels said in the statement, “The proposed rule fails to account for the fact that building a successful ACO, let alone one that is able to take on financial risk, is no small task; it requires significant investments of time, effort and finances. Hospitals and health systems must build upon their current infrastructure, which entails forming new and different contractual relationships and incentivizes successful strategies. While some have already taken significant steps toward achieving such alignment, others are not as far down this path. A more gradual pathway is critical for hospitals and health systems that are interested in participating in risk-bearing models – particularly those that are exploring such models for the first time.”

Seema Verma stands firm

In her telephonic press conference on Thursday evening at the time of the release, and covered by our Associate Editor Heather Landi, Administrator Verma was quite firm in terms of her insistence that it’s time to force the MSSP program forward. Asked whether she and her fellow CMS officials want to improve the MSSP program, or whether they would consider simply eliminating it, Verma stated that “We’ve taken a lot of time to study the implications of the program, and how it’s performing. We have some concerns about the impact on consolidation in the market; we’ve heard that from a lot of providers that having the ACOs is creating more consolidation and larger health care systems and reducing the number of individual providers, so we have some concerns about that.”

What’s more, she told the press, “What we’ve learned from reviewing the six years of data from the program is that there are successes, and there are successes when providers are willing to take on two sided risk, and when they are willing to be responsible for achieving sharing as well as losses, they actually save dollars while also improving quality. We’re trying to build upon the successes but also address the shortcomings of the program. And, those shortcomings are, allowing providers to continue without taking on any risk. And when we have that situation what we’re seeing is that we’re actually losing dollars, losing money. And we feel that given where the Medicare program is, we need to always focus on delivering value for patients and fort taxpayers. When we developed this program, we wanted to move the entire program towards providers taking more risk because we know that works. We want to work with ACOs that are serious about participating in the program and investing in the type of changes that are going to deliver value to patients.”

Varying responses—some positive

Not all associations involved in ACO development have responded as negatively as NAACOS and the AHA have. Indeed, the Los Angeles-based America’s Physician Groups, or APG, released a statement attributed to Valinda Rutledge, its vice president, federal affairs, which said, “Overall, APG considers the proposed rule a very balanced approach to various stakeholders’ concerns as well as a positive step forward in the movement from volume to value.  It also acknowledges what we already know—two-sided, physician-led Accountable Care Organizations (ACOs) not only provide superior quality care at a lower cost, they provide significant savings to the Medicare program—and more importantly, the American taxpayer.”

Further, APG’s Rutledge said, “In this proposed rule, a smooth pathway is provided for physician groups seeking to move into risk, which allows them to tap into other Medicare quality programs including the Quality Payment Program (QPP) and the incentive payments it provides.  Moreover, it allows physicians engaged in two-sided models access to additional tools to better coordinate care and provide the type of services patients need, and in the most appropriate setting, including the patient’s home.”

And, Rutledge added, “We know that many of today’s ACOs have experience in upside risk only.  The proposed rule acknowledges this and provides for a transition period instead of forcing groups into downside risk right away. We believe that no group should be forced into risk; however, when groups decide to accept the opportunity for shared savings, we also believe that they then should take on the responsibility of saving money for our healthcare system and the people and communities they serve.”

Where do we go from here?

There are many ways in which one could look at this situation; indeed, the landscape of reaction to the “Pathways to Success” proposal is practically a policy-focused Rorschach inkblot test, with those who believe that ACO development needs to be compelled forward towards acceleration, cheering Verma’s announcement, and those who believe that the success of the ACO phenomenon depends on a gradual ramp-up, criticizing it. But the real question is this: what practical effect will the announcement, and the proposal, have, on the ACO movement?

The reality is that Seema Verma and her fellow senior CMS officials are taking a huge risk in trying to push provider organizations very forcefully into downside risk, at a time when early ACO development work has revealed just how difficult that proposition really is. Among the major challenges that have been experienced by pioneering organizations: the ability to obtain, analyze, and use timely clinical and claims data to manage care and to vastly improve clinical, operational, and financial performance; the ability to align incentives between individual physicians, both primary care physicians and specialists, and patient care organizations, within ACO contracts; the core challenge of engaging patients in participating in actively improving their own health status; and the intensive fundamental IT and data analytics development needed to turbocharge all of this.

All of this is daunting even to the most advanced provider organizations. This past week, at our Health IT Summit in Boston, I had the privilege and pleasure of interviewing onstage Barbara Spivak, M.D., the president and CEO of the Mt. Auburn Cambridge Independent Practice Association, or MACIPA. Dr. Spivak noted that one of the very major challenges in succeeding in the MSSP program involves the effort and complexity involved in physician documentation around its quality measures. “One of key factors in physician burnout, particularly in primary care, is the documentation required for all of the quality metrics,” she told me. What’s more, she noted, even though MACIPA is a small organization, its physicians are still held accountable for hundreds of quality metrics that differ across various health plans; the only successful way of resolving that challenge is to narrow the broad range of measures demanded by the various payers in the various programs, down to a small number of more generalized measures. Dr. Spivak also cited an example of a potential future problem around CMS’s proposed fall risk documentation measure. Originally, she explained, physicians had to simply ask at-risk patients if they had two or more falls in the past six months and if they were injured. But a new CMS proposal may make things more complicated than that, Spivak noted. If the proposal passes, starting in 2019, physicians will have to ask these patients many more questions, including finding out details about stairs in the patients’ home as well as their vision. Our onstage interview took place on Wednesday morning, and the “Pathways to Success” proposal was announced Thursday evening. It will be interesting to see how physician leaders like Dr. Spivak react to it, given everything they already face.

So the key question is this: will provider organization leaders, and most especially the leaders of physician groups, respond with enthusiasm to this new CMS proposal, or will they recoil from it, and begin to flee the MSSP program? One of the most difficult challenges for CMS officials lies in how to most precisely calibrate their pressing down on the levers of reimbursement in order to compel providers forward. If they push down too lightly, the pace of change will be sluggish; but if they push down too hard, it could send provider organizations fleeing. Seema Verma and her fellow CMS officials have taken a calculated risk with this new move, and, from the reactions so far, they could face an uphill battle in their quest to push physician groups and hospitals forward faster without causing them to jump ship altogether and flee the MSSP program. Only time will tell; but the economic imperatives facing the administration are clear, as the Medicare actuaries predict a 70-percent increase in overall U.S. healthcare spending over next several years. But for an administration that is ostensibly committed both to healthcare system solutions that are as free market-based as possible, and also committed to doing everything possible to curb accelerating healthcare system costs, the built-in contradictions are already forcing awkward policy and payment moves. Without question, CMS, and all of us, are clearly already in uncharted territory. And only time will tell how skillful the agency’s navigation across that territory will have proven; so—stay tuned.

 

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Check and Checkmate: Is the Debate Around the MSSP ACO Program About to Get Super-Heated?

September 12, 2018
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Will NAACOS’s just-published study turn the tables on senior CMS officials? Or will it be ignored?

Something really quite extraordinary happened this week: NAACOS, the Washington, D.C.-based National Association of Accountable Care Organizations, published, in the august journal Health Affairs, a study based on research that NAACOS leaders had commissioned from Dobson DaVanzo & Associates, a healthcare economics consulting firm. And, as Healthcare Informatics Managing Editor Rajiv Leventhal noted in his report, “Medicare’s largest ACO (accountable care organization) initiative—the Medicare Shared Savings Program (MSSP)—generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by the Centers for Medicare and Medicaid Services (CMS),” according to the NAACOS/Dobson DaVanzo & Associates study.

And here’s what’s extraordinary about that: this is the first time in my memory that I’ve seen a national association of provider organizations commission independent research that directly contradicted federal government findings and statistics. Could this be the start of a major conflict over the direction of the MSSP program? The potential for actual conflict here is quite real. But first, let’s look at what NAACOS and Dobson DaVanzo found. As Leventhal noted, “The study, which used similar scientific methods as a 2018 peer-reviewed paper by Harvard researchers published in The New England Journal of Medicine, found that MSSP ACOs reduced Medicare spending by $541.7 million during the 2013 to 2015 timeframe, after accounting for shared-savings payments earned by ACOs.”

The MSSP is the largest value-based payment model in the U.S., growing to 561 ACOs with more than 350,000 providers caring for 10.5 million Medicare beneficiaries in 2018. Under current MSSP rules, new ACOs are eligible to share savings with Medicare for up to six years if they meet quality and spending goals but are not at financial risk for any losses. As such, CMS has been reiterating in recent months that these “upside risk-only” ACOs are costing the government money.

What’s more, as Leventhal noted, “To this point, in a recent proposed rule that has so far been met with varying degrees of scrutiny, CMS is proposing to shorten that 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. Importantly, CMS has essentially said they don’t mind if upside-only ACOs that are costing the government money leave the program if they aren’t willing to take on more financial risk. CMS Administration Seema Verma said in a press call following the proposed rule’s release that ‘[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended.’ Nonetheless, MSSP ACO participants seemingly performed quite well in 2017, despite CMS’ claims that they have been largely ineffective. In sum, the 472 ACOs that were in this model last year achieved $314 million in net savings to Medicare in 2017 after accounting for bonuses paid from the government, and $1.1 billion overall.”

For the NAACOS leaders, the key element here is that, as the authors of the Health Affairs article pointed out, “Despite the positive 2017 results, gauging MSSP performance based on calculations using administratively derived spending targets (benchmarks) is simply not an accurate way to measure overall program savings. In fact, the published academic research on MSSP performance points to much higher savings than are suggested by the benchmarks.”

Explained further by the researchers, for its analysis of Medicare ACOs, “CMS calculates an initial risk-adjusted spending benchmark for each ACO based on its historical spending for a group of attributed Medicare beneficiaries; it then trends this benchmark forward to the current program year based on the national average growth in Medicare spending per beneficiary.” The article’s authors further point out that if an ACO’s spending is less than the benchmark, and has a savings rate of at least 2 percent—and the ACO meets MSSP quality thresholds—it earns a shared savings payment that is typically 50 percent of the calculated savings. CMS then calculates total MSSP savings as the sum of total savings for ACOs with spending below the benchmark, plus the sum of spending above the benchmark for ACOs that exceeded it. Using this method, CMS estimated MSSP savings of $954 million between 2013 and 2015. During this period, ACOs that saved money earned $1.3 billion in shared savings payments. CMS concluded that on a net basis, the program increased Medicare spending by $344 million between 2013 and 2015, according to the NAACOS analysis and Health Affairs commentary.

At this juncture, there is an obvious issue here, because CMS’s calculation method implicitly makes it difficult for ACOs to show progress, since savings are benchmarked against administratively derived targets, rather than actual savings. Who came up with that method, anyway???

And the implications of using such a method are clear. As the press release that NAACOS issued upon the publication of the Health Affairs article noted, “Despite the growing ACO track record of improving quality and saving Medicare money, CMS, in an August 17 proposed rule, moved to shorten the time new ACOs can remain in the shared-savings-only model from the current six years to two years. Data show ACOs need more than two years to begin showing the benefits of forming an ACO. That proposal, coupled with CMS’s move to cut shared savings in half — from 50 percent to 25 percent for shared-savings-only ACOs — would deter new Medicare ACOs from forming.”

What’s more, the press release quoted Stephen Nuckolls, CEO of Coastal Carolina Quality Care in New Bern, N.C., which includes 63 providers caring for 11,000 Medicare beneficiaries, as stating that “It takes time and money to transform entrenched care delivery practices in local communities and build the critical mass to successfully integrate care, manage risk, and improve quality while reducing spending growth. Unfortunately, the proposed changes will hold up the move to value-based care by significantly undermining the business case to voluntarily form new Medicare ACOs.” 

I take Mr. Nuckolls’s charge very seriously. I interviewed him recently, and as he noted in our interview, when asked the secret of his ACO’s success so far in the six-plus years in which Coastal Carolina Quality Care has participated in the MSSP program, “[I]t takes time for some of these strategies, such as population health, to pay off. Another thing that’s going on is that our care management program, I give credit for keeping our costs low and getting things in place. And in addition,” he told me, “we really made a lot of strides in our first contract cycle, specific to our market. All of our annual wellness visits and preventive care, we made our marks there and that positioned us well in our second contract cycle. And it just takes time, when you focus on the quality of care, for… when a greater percentage of your patients have their blood pressure under control, you’ll have fewer adverse events. And when you work to lower a1cs, that will avert events over time. And annual wellness visits, vaccinations, screening services—it costs money for screenings; and once you get things set up, that’s then in place. And care management services—when you go into your second contract cycle, you have some of those costs worked into your contract cycle the second time; so it takes time to achieve shared savings, and to get the staff to focus on the sickest population.”

What’s more, what Nuckolls told me in our interview reflects what virtually every ACO leader I and my colleagues at Healthcare Informatics have heard from ACO senior executives—that it takes several years to lay the foundations for ACO success.

What’s more, Nuckolls told me, the results revealed in this data review-based study and article are important, as they speak to “the policy point—organizations are truly saving the government money, even if it doesn’t immediately show on paper. The evidence doesn’t support the idea that ACOs should be kicked out because they have a bad benchmark. The true savings to the Medicare Trust Fund will then be less. And that’s what they need to focus on, achieving true savings to the government.”

So, the obvious question now is, what will happen next? Will CMS Administrator Seema Verma lash out against NAACOS, denouncing this “rival” analysis of MSSP ACO savings? Will she ignore it? Or will she reach out to NAACOS’s leaders, and attempt to find common ground, as the “Pathways For Success” program potentially threatens the expansion of the voluntary MSSP program? It feels as though a lot is hanging in the balance right now, because if the national association representing ACOs has just come out with what is implicitly a denunciation of CMS’s method for calculating ACO progress and success, that is a fairly major “j’accuse” that Administrator Verma and her fellow senior CMS and HHS officials would do well to consider carefully. So the next move on this chessboard is Ms. Verma’s. And who knows what that move might look like?

 

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Seema Verma’s Big Picture: Tough Love, ACO Acceleration, Interoperability, and Consumer Empowerment?

August 29, 2018
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Will CMS Administrator Seema Verma’s strategy of pushing hard on providers around ACO development and interoperability help to accelerate the shift to value-based healthcare—or will it backfire?

Whatever may come, CMS Administrator Seema Verma is standing steadfast in her “tough-love” stances towards providers when it comes to ACO development. As Healthcare Informatics Associate Editor Heather Landi wrote on Monday, “During a webinar sponsored by the Accountable Care Learning Collaborative Monday morning, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma reiterated the agency’s focus on pushing healthcare providers in accountable care organizations (ACOs) to take on two-sided risk while also addressing CMS’s commitment to try to remove barriers to value-based care.”

Further, Landi wrote, “During the 30-minute webinar sponsored by ACLC, a Salt Lake City-based accountable care collaborative, Verma discussed the sweeping changes that CMS is proposing for the Medicare Shared Savings Program (MSSP), noting that ‘it is time to take the next step.’ On August 9, CMS proposed a rule that included major changes to the existing MSSP ACO program, with the goal to push ACO organizations into two-sided risk models by shortening the duration of one-sided risk model contracts. Referred to as “Pathways to Success,” CMS’ proposal looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track and the ENHANCED track. Verma’s comments on Monday morning emphasized CMS’s firm stance on pushing healthcare providers to take on more risk, as well as CMS’s strategy of giving providers more flexibility—such as waivers around telehealth—as a reward to transitioning to value-based care.”

What’s more, Administrator Verma came to the webinar with data. As Landi reported yesterday, “For the 2016 performance year, the Next Gen ACO Model generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries, according to CMS. Overall, that represents a net reduction of 1.1 percent in Medicare spending within that program, Verma said. The Next Gen ACO model began in January 2016 with an initial cohort of 18 participants. It should be noted that 15 out of the 18 NGACOs had prior Medicare ACO experience.

Verma was not shy about what she thought those metrics meant. “What this really shows is that these Next Gen ACOs are taking the highest levels of risk and they’ve managed to maintain quality while still lowering cost,” Verma said during the webinar. “Much of the savings achieved by the Next Gen ACOs were largely due to reductions in hospital spending and spending in skilled nursing facilities, and that’s very consistent with what we’ve seen with how other two-sided ACOs have achieved savings. We’re excited about this; we think it’s a very strong start.”

Good cop, bad cop?

I’m impossible not to contrast Verma’s statements about the Next Gen ACO program with how CMS characterized the proposal it released just three weeks ago, on August 9. On that date, as Managing Editor Rajiv Leventhal and Associate Editor Heather Landi reported, “The Centers for Medicare & Medicaid Services (CMS) is proposing a new direction for ACOs (accountable care organizations) in the Medicare Shared Savings Program (MSSP), with the goal to push these organizations into two-sided risk models.”

Further, they wrote, “Referred to as ‘Pathways to Success,’ CMS’ proposal, which has been expected for a few months, looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

And, Seema Verma has made numerous comments now in numerous speeches to numerous different healthcare groups, making it very clear that she is becoming impatient with the pace of change in U.S. healthcare, and is determined to do something about it—with the support of Health and Human Services Secretary Alex Azar, her boss.

Indeed, Verma’s first in a series of speeches around interrelated topics of value-based payment and care delivery, patient/consumer empowerment, interoperability, and technology advancement, came as early as the HIMSS Conference in Las Vegas, where, on March 6, she “spoke of the need to move forward to empower patients with their data and information, in remarkably personal terms, recounting an episode in which her husband had collapsed while the two of them were not together, and was rushed to an emergency department, for what turned out to be heart failure,” as I reported at the time.  In the wake of her husband’s health crisis, she experienced the difficulty of accessing her husband’s health record, as an authorized family member. And that experience, she said, particularly animated the development of the MyHealthEData initiative she was unveiling on that date.

“The reality,” Verma said, “is that once the information is freely flowing from patient to provider, the advances in coordinated, value-based care, will be greater than anything we could imagine today she said back in March. Things could have been different for my family if my husband could have authorized me to have his health records on his phone,” she said. “Or if he could have notified me that he was in distress. And better yet, maybe we could have predicted his cardiac arrest days before, if his watch could have tracked his health data, and sending that data to alert his doctor, and possibly prevent what happened. My husband is part of the 1 percent that survives his condition. We shouldn’t have to depend on chance” for that type of outcome, she emphasized.

The big picture: pushing on several levels at once?

It seems clear that Azar and Verma—certainly, with the help of Donald Rucker, M.D., National Coordinator for Health IT—are determined to acceleration the transition of U.S. healthcare providers into value-based healthcare, through a combination of different incentives, including a wide variety of carrots and sticks. And, not to mix too many metaphors here, but it also seems clear that her praise of the progress made by the Next Gen ACO program ACOs is evidently a “good cop” positioning, while she largely framed the relatively modest progress in the MSSP program in a “bad cop” sort of way, essentially telling MSSP ACO leaders that it was time to stop with upside-only risk, and move into two-sided risk as quickly as possible.

Of course, the risks in this kind of approach are significant. Not surprisingly, the National Association of ACOs (NAACOs) heaped scorn on the August 9 “Pathways to Success” proposal, with NAACOS CEO Clif Gaus saying in a statement released that evening, that “The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered healthcare industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.” According to Gaus, “The downside financial risk for patient care would be on top of the significant financial investments ACOs already make, jeopardizing years of effort and investment to improve care coordination and slow cost growth.” He continued, “CMS discusses creating stability for ACOs by moving to five-year agreements, but they are pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices.”

So it seems to me that Azar, Verma, and Rucker, and their colleagues, are in a bit of a challenging place here, because even as the progress has been measurably stronger in the Next Gen ACO program compared with that in the MSSP program, even in Next Gen, it hasn’t been spectacular. Meanwhile, Verma’s attempts to push down harder on the levers of payment and regulation in order to turbocharge ACOs, could very easily backfire, causing more ACOs to leave the MSSP program than to switch to two-sided risk.

So this is a delicate, complicated moment. Will “tough love” and “good cop, bad cop” strategies at HHS and CMS really work? Only time will tell—but this feels like an important moment in the evolution of value-based healthcare, with no clear answers as to how HHS (the Department of Health and Human Services) and CMS officials might be successful in forcing transformational change forward, at a time when the coming U.S. healthcare cost cliff is looming more closely than ever before, just up a head. As Bette Davis said, as Margo Channing, in Joseph L. Mankiewiecz’s 1950 film “All About Eve,” “Fasten your seat belts—it’s going to be a bumpy night!”

 

 

 

 

 

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PODCAST: Dr. Rita Numerof on CMS’ New ACO Proposals: “It’s Been a Long Time Coming”

August 23, 2018
by Rajiv Leventhal, Managing Editor
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Earlier this month, the Centers for Medicare & Medicaid Services (CMS) proposed a rule that included major changes to the existing MSSP ACO (accountable care organization) program. As Healthcare Informatics reported, referred to as “Pathways to Success,” CMS’ proposal, which has been expected for a few months, looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track and the ENHANCED track.

The broad takeaway from the proposal is that CMS has a clear goal to move ACOs more quickly into two-sided-risk models as the agency has noted that upside-only ACOs are not reducing costs and are costing Medicare money. “We project these changes will result in $2.24 billion in savings to Medicare program over next 10 years,” CMS Administrator Seema Verma stated at the time of the proposal.

Rita Numerof, Ph.D., co-founder and president of St. Louis-based consulting firm Numerof & Associates—and a recurring guest on the Healthcare Informatics podcast, notes that CMS has been trying to bend the cost curve for years. “They have been experimenting with different ways to ‘encourage’ providers to move in a direction to take on more risk. So I applaud CMS’ move to require ACOs to take on more risk, both upside and downside,” says Numerof on our latest podcast episode.

On the podcast, Numerof ponders, “Have ACOs been a good investment of taxpayer dollars? We are all paying for this. I would argue that they have been an expensive experiment. The intent was laudable…But the business model is fundamentally broken, and the underpinnings need to be changed.”

The podcast with Numerof runs about 20 minutes in length and keep in mind, you can listen to all Healthcare Informatics podcasts right here.

 


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