At Charleston Internal Medicine we know that high-quality care also means seamless care. This is particularly important when it comes to patients being admitted or discharged from a hospital. Transitions of care can be a vulnerable time for patients, as they face an array of challenges.

For instance, when a patient is discharged from the hospital, he or she may need to understand and follow new instructions, take new medications, use new health tools or equipment, or need to schedule follow up care. And, we must ensure that all their other providers are updated on these changes. If not managed correctly, transitions of care can lead to hospital readmissions, health complications, or a decreased chance of long term improvement.

That’s why our practice has made closing the gaps created in transitions of care a priority. Just over two years ago, Charleston Internal Medicine brought on our own Hospitalist to care for all of our hospitalized patients. With a Hospitalist on staff, our patients have a physician from the primary care practice they trust on hand and caring for them during hospitalizations – which can be trying and difficult times. And, our practice has a direct line of communication and insight into our patients’ health and care. Our Hospitalist lets the practice know what she needs and sees in the inpatient setting, while we keep her informed on our patients in the outpatient setting.

Right away, we saw the impact of our Hospitalist program. Most notably the open communication through our Electronic Health Record allows full access to patients’ record and the ability to connect with a patients’ Primary Provider at any time. The outcomes have been significant: Charleston Internal Medicine patients’ average length of stay in the hospital is almost two days less than other patients at the local hospital.

Even so, we believed more could be done. So we added a Nurse Practitioner to work alongside the Hospitalist and manage patient communications. She communicates with the patient, family, and caregivers as to the changes in care and what is needed at and after discharge. The Nurse Practitioner also personally calls each patient within 48 hours of discharge to ensure the patient is managing the transition properly.

The follow up calls have had a clear impact. In talking with the patient after they’ve been discharged, our Nurse Practitioner invariably, finds a missed care gap, a change that needs to occur, or another issue to be corrected or communicated to the doctor. For example, twice in recent months, she has called patients after they’ve been discharged from the hospital to discover that their oxygen tanks were not delivered. She was able to follow up with the oxygen supplier to ensure immediate delivery to meet this critical need. This example illustrates that while a transitional care visit 4-5 days after discharge is standard, many issues can arise and cause serious health decline that lead to readmissions even before that visit, so reaching out to the patient within the first 2 days is vital.

Given our practice’s emphasis on transitional care management, joining the Aledade West Virginia ACO last year was an easy decision for us. We knew that Aledade shared our mission to focus on keeping our patients healthy, out of the hospital, and in their homes. We also knew Aledade would provide us with even more resources such as policy expertise, data and technology to continue this vital work. Participating in a value based program, like the ACO, gives us even more reason to focus on our patients’ full spectrum of health and wellness.

One of the major benefits of joining the ACO has been the ability to share innovative ideas that benefit our patients across other practices in our region. Our efforts around care transitions have worked so well that another Aledade ACO practice recently asked us to handle all care for their patients in the hospital as well. This assures our fellow ACO practice that their patients receive quality care, gives them direct communication with the hospital staff, and immediate communication upon discharge about pertinent issues that need to be addressed in outpatient setting.

The ACO has helped us to think even more creatively about key issues like transitions of care. Recently, we’ve also begun another initiative that helps improve transitions of care, reduce readmissions, and post-discharge health complications. We partnered with a local pharmaceutical school so that every Charleston Internal Medicine patient that is discharged sees the pharmacist and does a medication reconciliation. This ensures that any changes or new medications will not adversely affect the patient.

Patient satisfaction has skyrocketed since we have implemented these new systems. We have received many calls from patients, families, and caregivers expressing their gratitude for this added care that they have never received before. Knowing that we’re focusing on keeping our patients healthier while easing the minds of their caregivers has been extremely rewarding for our physicians and staff, and most importantly, better for our patients.

As a Federally Qualified Health Center (FQHC), Hudson River HealthCare’s mission is to increase access to comprehensive primary and preventive health care and to improve the health status of our community in New York’s Hudson Valley and Long Island, especially for the underserved and vulnerable. We are proud to be a part of the Aledade value based care network, because we share the belief that primary care is the foundation of an effective health care system.

We work hard to coordinate the full range of care our patients receive, including outside of our health centers, to monitor, assess, and manage our patients’ full health and wellness needs, not just care for them when they’re sick. As part of an Accountable Care Organization (ACO), we are quarterbacking our patient’s health care.

One of the ways we do this is through our care management program, which focuses on a team-based, holistic approach to care. This allows Hudson River HealthCare to help patients achieve optimal wellness – from their physical and behavioral health needs, to social services and basic living needs.

As we see every day, low income or underserved patients can experience multiple barriers to care – from transportation challenges to lack of resources to follow up on care options. That’s where Care Managers play an important role, talking with patients individually to understand their specific situations and how they can help. We have seen many examples of how our approach to managing patients’ full-spectrum of health and wellness has made a big difference.

In one recent case, a Care Manager, making a routine check-in call with a patient, learned that the patient had recently canceled a medically necessary surgical procedure she was supposed to have on her eye. After inquiring with both the patient and the surgical center, our Care Manager discovered that it was due to the patient’s inability to afford the required insurance co-pay.

Our care manager took action and helped the patient find a community resource to help cover the co-pay, and ultimately the patient was able to get the surgery thanks to this additional support. Without a pre-surgery check-in call, our practice would not have known about the cancelation, and the patient would have likely skipped the surgery, with disastrous results.

A second case demonstrated the Hudson River’s team-based approach to care. One of our physicians learned during a patient visit that the patient did not have a place to live and was “couch surfing” at multiple friends’ apartments. We knew that without adequate housing, the patient would not be able to focus fully on taking her medications or monitoring her health conditions. Upon relaying that information to the care management team, we worked to get the patient an expedited appointment with a local housing organization. A Care Manager accompanied the patient to the housing organization interview and subsequent lease signing. Because of the swift work of our care management team in addressing an issue outside of basic health care, our patient’s quality of life was greatly improved.

We’ve learned that often, when caring for patients with limited resources, even the smallest barrier to care can become a serious issue, and that’s why we take the time and effort to check in often with our patients. As primary care providers, we know that in order to help keep our patients healthy, we need to focus on what happens beyond the walls of our health centers, from issues like housing or financial wellness. This keeps us up-to-date on our patients, coordinated with other providers, and providing the highest-quality care possible.

Participating in an ACO has allowed us to put even greater emphasis on keeping our patients healthy, and that’s our mission.

On January 1, 2011 the first Baby Boomer became eligible for Medicare, and more than 60 million more have or will follow her. In many ways, this demographic fact lies at the heart of the health care reforms over the past several years. It’s why the Affordable Care Act (ACA) not only expanded access to care, but also had several provisions to decrease costs and boost health outcomes. Last year, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which replaced the SGR formula for health care provider reimbursement, and that too included efforts to bring down costs while increasing quality. Yesterday, CMS proposed the details for implementing MACRA. How these rules are finalized and the effect they have will play a big part in determining whether or not our country can afford to care for the aging Baby Boom without breaking the bank, raising taxes, or cutting critically important care.

MACRA creates two Medicare paths for physicians. First, is the Merit-based Incentive Payment System or MIPS (yes, the acronym jungle just got a lot thicker). As a consolidation and refinement of various incentive programs, MIPS is an important program, but it neither aspires to nor will drive change in the value of health care at anywhere near the levels of change that the retirement of the baby boomer generation will force upon Medicare and society. For more background on MACRA itself we encourage you to check out some of our previous blogs here, here and here.

The second path MACRA creates are alternative payment models (APMs). These models are not just incentives, but fundamental changes in how we pay for health care in the U.S. It is these models, particularly those dealing with total cost of care, that have the potential to fundamentally alter the value we receive from health care.

Under these rules, there are now two types of alternative payment models: alternative payment models and advanced alternative payment models. Advanced alternative payment models are the ones we are interested in. They are the ones that exclude a physician from MIPS, the ones the Congress endorsed as special. Under MACRA, if a physician participates in an advanced alternative payment model, they will be exempt from the Merit-based Incentive Payment System (the subject of part 2 of the What is it MACRA blogs), and they will receive a lump sum payment from Medicare in the amount equal to 5% of last year’s fee for service payments. To qualify as an alternative payment model under the MACRA statute, it must use Certified EHR Technology, report quality measures comparable to measures under MIPS, and bear financial risk in excess of a nominal amount – or – is a Medical Home Model expanded under section of 1115A(c) of the law.

First, the spoiler. CMS set a pretty high bar for what counts as an Advanced APM, requiring pretty substantial downside risk, with the curious exception of “non-expanded Medical Homes”. If the rule is finalized as proposed, CMS estimates only a small percentage of providers- as few as 5% – would receive Advanced APM bonuses in 2019. We believe that with some very reasonable changes that CMS has left the door open to, this could be significantly expanded, especially for those independent physician ACOs found to be most successful in the current Medicare Shared Savings Program.

CMS was charged with defining in its regulations, the following:

  • What is use?
  • What is Certified EHR Technology?
  • What makes measures comparable to measures under MIPS?
  • What is financial risk?
  • How much financial risk is in excess of a nominal amount?
  • What is a Medical Home Model?

Let’s look at these questions.

What is a Medical Home Model?

No Medical Home Model under section 1115A(c) has been expanded to date so we can set aside that criteria for the time being.

What is financial risk?

CMS does not propose to define who among the participants in an advanced APM must bear risk. To use an ACO as an example, the ACO could bear all of the risk and the members of the ACO no risk, the entities could share risk or the ACO organization could pass through all the risk to the members of the ACO. CMS wisely choose not to dive into this potential morass.

In the regulations, risk is defined as financial losses tied directly to performance in the advanced APM. CMS dismisses what many ACOs had advocated- that the investments made to participate in the APM count as risk- for two reasons:

  1. The MACRA statute recognizes that not all APMs will meet the criteria and that the inclusion of risk to investment would qualify most if not all APMs as advanced APMs
  2. The wide variation in investment made by different entities in different models makes it impractical to quantify whether the investment or business risk is more than nominal or not

We agree that the MACRA statute does lean towards only counting risk as it relates directly to the model. We agree that quantifying investment risk is difficult, but not more so than many other things CMS must accomplish with this rule.

So which are dollars that count as being at risk according to CMS?

  • “Withhold payment for services to the APM Entity and/or the APM Entity’s eligible clinicians”;

Translation: Not at all for services that would have been paid for outside the model until you meet a performance target in the model

  • “Reduce payment rates to the APM Entity and/or the APM Entity’s eligible clinicians; or”

Translation: Not as much for services as would have been paid for those same services outside the model until you meet a performance target in the model

  • “Require the APM Entity to owe payment(s) to CMS.”

Translation: Writing CMS a check due to not meeting a performance target in the model

The Wild Card: Medical Home Models that have not been expanded

While the MACRA statute only talks about expanded Medical Home Models for APMs, CMS has proposed a different set of definitions of losses for organizations that meet certain standards to be labeled as Medical Homes. The standard relevant to the financial capacity is that the APM Entity, that is the organization that has the contract with CMS for the model be, owned and operated by organizations with 50 or fewer clinicians

So which are dollars that count as being at risk for Medical Home Models to CMS?

The same three as before plus

  • Lose the right to all or part of an otherwise guaranteed payment or payments, if either:
    • Actual expenditures for which the APM Entity is responsible under the APM exceed expected expenditures during a specified performance period; or
    • APM Entity performance on specified performance measures does not meet or exceed expected performance on such measures for a specified performance period

Translation: In CPC+ this means that the money CMS gives you up front for being in the model, but could take back if you don’t hit quality or cost targets counts as risk. This differs from the other three loss definitions because this is money that is only accessible through the model. This is a very generous definition of loss and we have significant concerns that it pulls primary care physicians who would tackle total cost of care backwards towards something that looks more like “pay for performance”.

How much financial risk is “more than nominal”?

This was always going to be the tougher question. CMS threw a little more complication in there with the Medical Home track. How much was always going to be a sliding scale.

The first decision is how much as compared to what? CMS proposes for most advanced APMs that the answer be the target in the model itself. So in the ACO world a percentage of total cost of care. In the bundle world a percentage of the target price. The other specifically discussed option (and one CMS uses for the Medical Home group) is a percentage of Part A and B Medicare revenue received by the APM entity (page 492). In our view this is a far superior way of looking at risk as we have written about before. It works across all models and accounts for organizational size and financial resources directly. CMS clearly debated between the two in the proposed regulation, and we hope to convince them of the virtue of a revenue based target for measuring financial risk. If you care about increasing the number of independent primary care providers that can participate in Advanced Alternative Payment Models and successfully tackle better care at lower cost (we are crazy about it!)- and you only comment on one thing in the reg, it should be this:

We seek comment on the Advanced APM nominal amount standard. In particular, we seek comment on whether the Advanced APM benchmark or the Advanced APM Entity revenue is a more appropriate basis for assessing total risk and on the proposed amounts of total potential risk, marginal risk, and maximum allowable minimum loss rate. (MACRA p 492)

Back to what was proposed. For most advanced APMs, there are three financial tests that must be passed. The marginal risk rate must be 30%, and the loss protection in the form of a minimum loss rate must be 4% or less. Conversely, loss protection in the form of a stop loss must expose the organization to at least paying 4% of the denominator in question (total cost of care or target price) to CMS. So for example if an ACO split losses 50/50 with CMS then the stop loss would need to be at least 8%. Under these definitions all two sided tracks of MSSP would meet the definition. The regulation contains more examples of these factors, but to sum up.

  • Entity must be on the hook to pay back at least 30% of the losses that are greater than 4% of the denominator to qualify, or
  • Entity must be on the hook to pay back losses totaling 4% or more of the denominator

Confused yet? To simplify, we recommend that CMS simply say that organizations must be on the hook to pay losses amounting to at least 15% (one percent more than MIPS combined with the APM Bonus) of their Medicare Parts A and B revenue. This is the same denominator proposed by CMS to use for Medical Home Model participants, but with a higher percentage to reflect CMS desire to make advanced APMs riskier than MIPS.

What makes measures comparable to measures under MIPS?

The easiest of the criteria. All APMs introduced by CMS to date have robust quality measures and I don’t see them ever introducing an APM that would have problems meeting the quality definition.

What is use of Certified EHR Technology?

Advanced alternative payment models adopt the current definition of Certified EHR Technology as certified EHR technologies that meet the definition of meaningful use. The definition refines with the evolution of that definition under the Merit-based Incentive Payment System. The use part of the requirement is left to be defined by the advanced payment model itself.

To sum up:

  • Always use certified EHR technology
  • Know the stance on use that your advanced APM choose (for example, the Medicare Shared Savings Program uses the EHR Incentive Program meaningful use requirements currently)

Conclusion

Advanced APMs are what is going to drive the movement to value based health care. We need a framework for becoming an advanced APMs that scales across models and across different organizations. By shifting the risk basis to Medicare revenue from model benchmarks and prices, CMS can easily achieve these goals. We look forward to working with CMS on developing APMs that work from all providers. If we are really going to increase value across the spectrum, we need to have 50% of physicians looking after total cost of care not 5% of physicians with only some of them looking after total cost of care.

We have a principle at Aledade that drives everything we do: good for patients, good for doctors, and good for society. This nearly magical combination ensures that we create value and are not just shifting money around between constituencies in the health care system. It also demands balance. Balance is what CMS is striving for in this new regulation on how Medicare will compensate ACOs. Reading the 199 pages, it is abundantly clear that a lot of study and thought went into the proposals and I want to take a moment to applaud CMS for their efforts.

We define ACO value as “did people in the ACO get better care than people not in the ACO,” a “difference in difference” approach. In today’s health care system, better care leads to lower costs. Financial models like the Medicare Shared Savings Program (MSSP) create a way to reward doctors for that better care and resulting lower costs. But better care is hard. Creating a financial model that rewards lower costs due to better care, but not due to avoiding care (stinting) is hard. In this regulation, CMS gets closer to rewarding value as measured by the ACO success in delivering better care so let’s dive into the details.

CMS introduces the concept of regional benchmarking and blends it over time with historical benchmarking in an effort to strike the right balance – an approach we support and advocated for. In plain English, a regional benchmark means beating your neighbor and a historical benchmark means beating yourself. Currently, the MSSP requires continual improvement as measured against yourself. CMS recognizes that this has a limited shelf life as improvements get harder and harder and lower costs get dearer and dearer over time. Yet a pure regional benchmark is obviously not good for society. Doctors above the regional benchmark have no incentive to join the program and doctors below the regional benchmark have little incentive to continually improve. This creates the need for balance. The balance CMS struck is to blend the two to create a path for long-term sustainability for an ACO. The first 3 years continues to be 100 percent historical benchmark, years three through six is 65 percent reset historical benchmark and 35 percent regional benchmark and years six through nine is 30 percent reset historical benchmark and 70 percent regional benchmark. This blend requires continual improvement from the ACO, but at the same time rewards the ACO more and more for the true measure of value in a difference in difference approach.

It is impossible to get those percentages precisely right, but getting it as close as possible is critical to the future of health care in our nation, and we will be working hard with CMS, other ACOs and other stakeholders to do our part to making that decision as informed as possible. Overall, this regulation is a huge step forward to creating a system that rewards value – and is good for patients, good for doctors, and good for society.

Five years ago, I sat in an imaging center in southern Florida as a group of independent physicians discussed the newest – and one of the most unfamiliar – concepts in the world of health care: Accountable Care Organizations (ACOs). What were they? What were shared savings? Would ACOs force all of these doctors to give up their independent practice and be subsumed by hospitals? As lively discussion escalated to more heated conversation, I was struck with one thought.

If ACOs had the potential to be this disruptive to the status quo, I needed to be involved.

I decided then to learn as much as possible about ACOs and the Medicare Shared Savings Program (MSSP). As one of the doctors said to me at the time, “We – physicians – want to be part of the solution.” But too many of these doctors had no idea how. With ACOs, I saw a chance to empower independent physicians, and place them back at the center of their patients’ care.

Months later, the organization I co-founded – Palm Beach ACO – received the first number in the history of the Medicare Shared Savings Program: A1001. When our program year began on July 1, 2012, we were one of the only ACOs to be physician-led; 78% of our doctors were solo practitioners. When our year one performance results were tallied, we generated $39 million in savings for Medicare – including $19 million for our own doctors.

Since then, I’ve helped build successful physician-led ACOs – leading my own firm and consulting physician-led groups,while also working with CMS to identify the parts of MSSP that are working, and those can be improved.

So today, I’m ecstatic to announce I am joining Aledade as a Senior Advisor and Executive Director of the Florida Division.

ACOs present a unique opportunity for primary care physicians to be at the forefront of positive, industry-wide change – I’ve been fortunate to work with other visionary physicians who share the mission, values, and passion for that transformation.

But I joined this company for two specific reasons.

First, Aledade has assembled an all-star team of health care policy, technology, and operations experts unmatched anywhere else in the field. With Farzad and Aledade, I’ve found a home that enables me to share this vision for health care with the widest possible audience. Over the last four and a half years, I’ve spoken with around 2,000 doctors – they’ve told me what they need to succeed in providing the highest quality care while improving outcomes and lowering costs. Aledade shares that understanding, and instead of spending time and energy simply fighting rules, this team has embraced them – and wants to work within those rules to maximize the impact and efficiency of independent doctors.

Second, Aledade couples that vision and passion with the most sophisticated approach to creating and operating ACOs that I’ve seen anywhere in the field. Aledade is able to understand the intricacies of electronic health records, health information technology, and interoperability – because members of the team here were integral in creating the rules that govern this technology. Our success in South Florida was predicated on empowering physicians. But integral to that strategy was using data to drive strategic decisions about patient outreach and intervention.

In my time with Aledade, their approach to the same problem is miles ahead of where most ACOs are. Aledade’s understanding of interoperability enables them to mine data from public domain or outgoing billing claims (instead of waiting for returned claims); the team’s analytic capability turns this raw data into actionable information for their partner doctors – highlighting patients at the highest risk, those in need of more outreach, and those in need of intervention before serious health problems develop or worsen.

No other team combines Aledade’s commitment to the triple aim of health care improvement with the technology capable of empowering independent physicians to lead the way. As I embark on my first assignment – recruiting primary care physicians to form an Aledade ACO in Florida – I couldn’t be more confident about this team’s ability to help physicians lead the way in transforming medicine, or more excited for the work ahead.

Dr. Bob Kocher and Dr. Farzad Mostashari

Earlier today, Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced that HHS is doubling down on the historic shift taking place across the health care industry towards value-based care, and is setting a target of having 50 percent of Medicare payments under value-based care arrangements by 2018.

This would mean that in less than three years, around a quarter of a trillion dollars of health care spending would be made to providers who are being compensated not for ordering more tests and more procedures, but for delivering better outcomes – keeping patients healthier, keeping them out of the hospital, and keeping their chronic conditions in check.

This shift will address a central problem of the US health care system, one that lawmakers and policy experts on all sides of the issue agree is a key contributor to runaway medical inflation.

The logic is straightforward: by simply paying for the volume of services delivered, every provider has a strong incentive to do more — more tests, more procedures, more surgeries. And under this system, there is no financial incentive to maintain a comprehensive overview of patient care – to succeed by keeping the patient healthy, and health care costs down.

In making this announcement, Secretary Burwell took a step that many within HHS had been advocating quietly for years, and which many outside it have advocated more loudly.

Skeptics may ask: what does this accomplish? And why announce it now, when health care costs are already rising at the slowest rate in decades?

As someone who has served on the frontlines of the policy and the practice of this transformation, the answer is clear: because dispelling disbelief and uncertainty about this shift “from volume to value” among decision-makers in the health care industry will be key to sustaining progress.

Part of the reason for the spending slowdown is the fear among some health care executives that their “build-it-and-they-will-come” fee-for-service model may not last. According to the Federal Reserve Bank of St. Louis, health care construction, on a continuous upwards trajectory for years, dropped sharply in 2009, and even as the rest of the construction industry rebounded, dropped again in 2013. The ubiquitous cranes building new hospital wings and proton beam pavilions have paused ever so slightly as uncertainty reigns.

But imagine if this announcement by the world’s largest payor is joined by private sector leaders, signaling urgency and determination. The skeptics and the straddlers will have a definitive answer, and it will accelerate the transformation already underway. Innovation in how healthcare is delivered can succeed only if there is a sustained commitment to change to go along with the technological advances in data and analytics that have revolutionized other sectors.

This is doubly important. There are still too many organizations deeply embedded in today’s payment models, who have chosen to wait and see if this value-based care movement is a passing fad.

Many have dipped a timid toe, or hedged their bets with low-regret moves like buying up practices and forming organizations that are Accountable Care Organizations (ACOs) in name only. These actions consolidate a health system’s referral base, but administrators have no intention of reducing costs, which are their revenues. Put differently, these “ACO squatters” say there are embracing new payment models, but remain stuck in the mentality of the do-more, get-paid-more system.

Unfortunately, this strategy is already too widespread, and likely to grow as long as large organizations are allowed to continue in “one-sided” (upside only) shared savings models, as recently proposed by CMS. It’s also a major reason why so few hospital-sponsored ACOs have actually achieved savings bonuses. Defensive moves by hospital systems provide a veneer of action, while consolidating regulator-blessed market dominance that can raise local prices without improving quality at all.

Without a doubt, the goal announced today by HHS will motivate widespread, real change across both the public and private health care sphere. But in order to achieve the spirit of the transformation – and not simply check the box of meeting numerical goals – I would suggest an additional metric to accompany the headline number.

In addition to tracking all dollars paid out under value-based systems (like the “fee for service” revenue generated by hospitals with an ACO contract), HHS should also separately count how much money was actually awarded or taken away as part of value-based contracts. The headline number will give a picture of how many providers are participating in value-based care programs; the second number will give a clearer policy goal of increasing the number of providers that are actually succeeding in these arrangement. This additional objective would discourage the “ACO squatting” described above, and challenge participant providers to embrace not simply the letter of the regulations, but the spirit of the program.

“You can give them a big number and you can give them a date, but don’t give them both.”

That was the sly advice on target setting given by a career bureaucrat to a newly appointed agency head. Bureaucracies protect themselves against embarrassment and deflect scrutiny, especially when they feel attacked, and the leadership of the Department of Health and Human Services (HHS) has felt intense scrutiny since the earliest days of the Obama Administration. In that light, HHS Secretary Sylvia Mathews Burwell’s announcement today of a target for reforming healthcare payments is both astonishing and courageous.

Dr Mostashari is the Founder and CEO of Aledade, a company that helps create and operate primary care-led ACOs. He was the National Coordinator for Health IT from 2011 to 2013. Dr Kocher is a Partner at the Venrock venture capital firm, an investor in Aledade, and a former special assistant to President Obama on the National Economic Council.