Yesterday, Aledade announced that we are forming the first primary care physician-led accountable care organization (ACO) in Arkansas. We are proud to bring independent doctors in Arkansas a new model of primary care that will allow them to stay independent, focus on delivering high-quality care, and be rewarded for keeping patients healthy.

ACOs are part of a significant transformation in health care to value-based care – care in which doctors are reimbursed not for the number of tests or procedures they undertake, but in how successful they are in managing the health of their patients. In Arkansas, practices in the Aledade ACO will benefit from Aledade’s regulatory expertise, best practices from our nationwide network of primary care doctors, technology and data analytics, and in-person practice transformation support.

However, ACOs are not the only way for Arkansas doctors to participate in value-based care.

Earlier this year, the Centers for Medicare and Medicaid Services (CMS) announced a massive new pilot program called Comprehensive Primary Care Plus (CPC+). CPC+ is designed to help practices build capabilities and care processes to deliver better care by offering them greater financial resources and flexibility in care delivery. The goal of CPC+ is to strengthen primary care to enhance the quality of care patients receive, improve patients’ health, and spend health care dollars more wisely.

CPC+ does this by paying physicians monthly care management fees tiered to the patient’s level of need; different from the current “one-size fits all” Chronic Care Management fee that practices have been using to support comprehensive patient care. These payments provide physician practices with much-needed resources to invest in the capabilities and tools to effectively manage population health and the total cost of care.

The good news is that, as Aledade had hoped and proposed to CMS, CPC+ is open to physician practices that are also participating in the MSSP ACO program. Furthermore, CMS recently named Arkansas one of the regions in which CPC+ is being implemented. Together, this means that practices in the state can participate in both CPC+ and the Aledade ACO. The unique combination of CPC+ and the ACO gives both the resources necessary to improve patient care and the incentives to reduce the total cost of care. Upfront care management fees and support with the ACO’s primary care-led efforts to generate shared savings offers great promise in the goal of improving care quality and lowering costs. For physician practices, this means getting the upfront financial resources and support to improve care access, care management and coordination, and patient engagement, while also being rewarded for the resulting improved health outcomes through ACO shared savings payments.

Aledade will help its partner practices in CPC+ work to fulfill the program’s practice, reporting, and care management requirements, much of which align with the efforts Aledade practices are already doing as part of an ACO. Aledade also will continue to monitor what comes out of Washington so that its doctors can understand, adapt, and thrive under whatever new rules or programs are introduced.

A lot is changing in health care delivery, and Arkansas is no exception. With these models and with the right partners, I am confident it will mean better health care for Arkansans and thriving practices for their doctors.


Over the last eight months, my solo practice in Delaware has seen a 60 percent reduction in our monthly Emergency Department (ED) utilization rate. How have we accomplished this? We have undertaken a number of measures to reduce unnecessary ED utilization since joining the Aledade Delaware ACO, but clear communication – both with our patients and with other providers – has made a tremendous difference.


I have always put a focus on being available for my patients. Patients can contact someone from my practice 24 hours a day, seven days a week, and 365 days a year. I know the value – in health and peace of mind – access to a doctor delivers for patients.


As part of joining the Aledade Delaware ACO, my practice placed an emphasis on strengthening our communication with our patients to ensure they know they can – and should – contact my practice about any health need at any time on any day or night. I have reinforced this principle through clear communication during patients’ visits to my office, through my office staff, and with signs in our waiting room, provided by Aledade, reminding patients to call us before they go to the ED or hospital. I also proactively identify frequent ED users in my patient population with the Aledade App, which helps me create a dialogue with these specific patients, while better understanding their health concerns and needs.


During a recent weekend, I received a call from a patient suffering from a cough. Comfortable the patient did not need to seek medical attention immediately in the ED, I arranged a convenient time to see him in the office the next day. Alternatively, I recently advised a patient with chest pain who called after hours to seek immediate medical attention. Given the severity of his medical issue, I called the hospital and had him directly admitted, bypassing what would have been a costly ED visit that would have resulted in a hospitalization.


As a solo physician, I know it takes support to provide this level of communication and service to my patients.  Dr. William Funk, a fellow member of the Aledade Delaware ACO, and I alternate our weekend on-call hours to benefit both our patients and our schedules.


Delivering high-quality care takes much more than clear communication. However, establishing communication between patients and providers goes a long way to increase the quality, timeliness, and cost of care. Ultimately, this benefits our patients’ health and well-being, and that’s what value based care is all about.



When CMS released its proposed MACRA rule in April, Aledade immediately dove in to understand how it would influence important issues ranging from health care market competition to the advancement of health IT. Overall, we believe the rule is a step in the right direction toward creating greater value in health care and encouraging the move of eligible clinicians out of fee-for-service and into advanced alternative payment models (AAPMs).


However, we believe there are some changes that CMS could make to help create a path for independent practices to thrive, deliver high quality care, and reduce costs. We highlighted these changes in a formal comment letter to CMS during the recently closed public comment period.


One of the primary changes we called for focuses on the “more than nominal risk” taken on by practices participating in AAPMs. Specifically, we believe that the level of financial risk needs to be more than nominal as it relates to the organization.


With nearly 50 percent of eligible clinicians still in small practices, health care organizations of all sizes must consider AAPMs a viable option. The proposal to base the determination of “more than nominal” on the benchmark of the APM will not succeed in moving more providers to financial risk. If left unchanged, the rule will create vastly different amounts of risk depending on the type/size of the organization and depending on the APM model.


Instead, as we said in our formal comment to CMS, we explained that we believe financial risk would be best measured as a percentage of revenue so that the risk is based on the size of each organization. We proposed:


“CMS should base the level of risk on how much revenue the organization and/or its members received from Medicare. This approach was appropriate for Medical Home Models and will also make sense for all APM entities at a higher threshold. We propose 15% of the APM Entity’s participant aggregate Medicare Parts A and B revenue.”


We told CMS this is the single most important policy change it could make for the implementation of MACRA and is absolutely crucial to encouraging eligible clinicians to embrace AAPMs.


We are happy to see that many of our peers agree with our assessment.


On the risk provision, the American Academy of Family Physicians (AAFP) said: “Entities of all sizes will be able to assume varying levels of risk. It is critical that CMS ensures the success of these entities by allowing for risk structures that will support this success.”


The American College of Physicians said a revenue-based risk level “would reflect significant nominal risk to the practices within the entity, but not place them in unreasonable financial jeopardy.”


Others voiced support for a revenue-based level of risk, including:

  • American Medical Association
  • Federation of American Hospitals
  • Health Care Transformation Task Force
  • Medical Group Management Association
  • National Association of ACOs
  • National Committee for Quality Assurance
  • Premier


Aledade hopes that when CMS reviews all of the comments and finalizes the rule, it considers making these small but important changes that will benefit patients, doctors, and the health care system overall.

At Complete Family Care, we’ve learned that a small magnet can make a big difference. Since the start of the year, we’ve been giving magnets to all our Medicare patients. The magnets have a simple message: “Call Before You Go.” It’s a reminder to our patients that we have a doctor on call 24 hours a day, and if they are feeling ill, they should call us first. In recent months, we’ve seen that the magnets have had an impact.

One story vividly illustrates how the magnets are helping patients avoid unnecessary Emergency Department (ED) visits. A Complete Family Care patient with a history of congestive heart failure started to have lower extremity edema late at night. This was the seventh time over the last several months he had swelling in his legs, and every time, the patient went to the ED. Each time the swelling was not a blood clot. After receiving the magnet, the patient decided to call Dr. McBratney. After reviewing his medical history, Dr. McBratney talked to the patient and recommended he take an extra Lasix pill. By morning, the swelling had gone down, and the patient avoided a costly and unnecessary ED visit. We believe that reducing unnecessary ED visits is both good medical practice and good business sense. Patients do not want to spend hours in an emergency room when there are better, less costly options.

Another example highlights how the magnets can aid transitions in care management. A Complete Family Care patient was having a hypoglycemic event, again late at night. His wife called 911, but then, triggered by the magnet, remembered to contact the on call doctor as well. She told the on call doctor that her spouse was on the way to the ED, enabling the doctor to contact the ED and provide background information on the patient. That one-minute phone call helped the ED better prepare to receive the patient and our office was able to follow up with the patient upon discharge.

At Complete Family Care, we believe patient communication is paramount. Having a doctor on call reinforces that we care about our patients and will respond to their needs and concerns all hours of the day. We take pride in providing high quality care, and we recognize that an important aspect of quality care is peace of mind. Patients take comfort in knowing they can reach a doctor at any hour, even if they never need to.

While the magnet isn’t the answer to everything, even in this digital age of emails, texts, and smartphones, sometimes a reminder posted on the fridge next to photos of the grandchildren can be the best medicine.

One of the keys to ACO success is ensuring that patients get the right care in the right place at the right time. 95 percent of Aledade’s physician partners provide 24 hour-a-day, seven-day-a-week patient access to an on-call doctor.  But what happens if a patient has an urgent health need after hours that can’t be addressed over the phone? Is the Emergency Room the best option?

Urgent care clinics offer an additional care option for patients, which significantly/crucially/measurably expands access to care. These clinics offer patient-friendly hours and a quicker, less costly care option than hospitals, when a primary care physician is not available. When urgent care centers are too far away or closed, patients resort to going to the ED. At the ED patients face chronically long wait times, expensive and often unnecessary care. It also may be difficult to reconcile patient records after a visit to the ED.

Effective urgent care clinics exemplify the key to coordinated care:  getting the right care at the right time in the right care setting. Urgent care centers can also make significant strides in reducing the strain on overcrowded hospitals, decreasing the wait for care, and shortening the distance patients travel for care – all while achieving the value-based care goal of high-quality care at lower costs.

For physicians, urgent care clinics ensure their patients are getting the care they need when they need it. And, by partnering with urgent care clinics, primary care physicians can be notified of when their patients receive care, get clinical notes and records, and coordinate transitional or follow up care. This informational sharing partnership is especially important for ACO physicians – as this care coordination updates physicians on pertinent information, helps keep patients out of the ED and hospital, limits unnecessary or repeated tests, and reduces overall costs.

Aledade’s Delaware ACO recently established a care compact with a large group of local urgent care clinics. This care compact enables data and record sharing between the urgent care clinics and Aledade ACO partner practices, improving patient care at the clinics and rounding out/filling in ACO practices’ knowledge of their patients’ care. To ensure patients are receiving the highest quality of care in an urgent care setting, Aledade has instituted a monthly case reviews with the urgent care center’s clinical team. In addition, Aledade plans to monitor key quality measures over time, ensuring the urgent care center is a good alternative for patients to obtain access to care as an alternative to the emergency department.

The Delaware urgent care clinic agreement is an important example of one the many ways Aledade is working to encourage and improve urgent care throughout our ACOs. Urgent care centers play a vital role in an effective, value-driven health care system. In each of our ACO markets, Aledade is looking for ways to model Delaware’s care compact, which both coordinates care between our ACO practices and urgent care centers, as well as expands access to urgent care for our ACOs’ patients.

However, in some areas where Aledade’s ACOs operate, urgent care clinics are few and far between.  In these cases, Aledade and our ACO partner practices have to get creative – finding the best ways to expand PCP availability to patients in order to compensate for a lack of other nearby providers.

Recently, physicians from one of Aledade’s Primary Care ACO  partner practices, the WVVA Health Care Alliance, came together to form their own urgent care clinic, providing access to care for the communities of western Virginia and southeastern West Virginia. Known as Alliance Express Urgent Care, this new clinic has not only expanded access to care for the community, but lightened the care load for the local hospital by seeing up to 50 patients per day. As an urgent care facility run by the local primary care physicians, Alliance Express is in full communication and coordination around patients’ care. After each patient visit, the urgent care provider calls the patient’s primary care doctor to fill the physician in on the patient’s health and health care needs.

Aledade believes that urgent care clinics play a vital role in the health care ecosystem, and Aledade is committed to partnering with and increasing access to urgent care clinics across all of our ACOs where possible. By connecting primary care practices with other health care stakeholders, we can help deliver coordinated, high-quality care.


The two strongest external forces for creating value are aligned incentives and competition. As the largest payer of health care in the world, the federal government is in a unique position to promote both. With the incoming Baby Boomer generation putting continued fiscal pressure on Medicare, creating greater value in health care is imperative to Medicare. How CMS sets up the new payment system under the MACRA law is critical to accelerating the transition from volume to value. As CMS considers the final rules for how to implement this law, we believe that there is an opportunity to use this new payment structure to increase aligned incentives for small physician practices and foster robust competition among health care providers. Both are critical to hasten the move of eligible clinicians out of fee-for-service and into advanced alternative payment models (AAPMs), a goal that the drafters of MACRA, the President, and many in health care agree on.

Of course, aligning incentives and fostering competition can conflict. Yet, one thing both goals have in common is the centrality of the independent, primary care physician practice. Responsible for a patient’s overall health and health spending, primary care doctors play a critical frontline role in controlling spending and delivering care[i]. In such a world, the independence of primary care physicians is important because any pressure to serve a larger health care system could run counter to these goals. These physician-led ACOs may lack the capital and resources of their hospital-owned brethren. However, they have the ability to act more nimbly with no internal conflicts between a business model predicated on hospital admissions, and a different one based on preventing them[ii]. This is why it is essential that independent primary care physicians are supported, not squashed, by these new rules.

To both move every physician who is ready towards aligned incentives and to foster competition, we encourage CMS to evaluate the MACRA implementation using these principles:

  • With nearly 50 percent of eligible clinicians still in small practices, health care organizations of all sizes must see themselves in AAPMs. Specifically, for MACRA implementation, the level of financial risk needs to be more than nominal as it relates to the organization, otherwise CMS policies will inevitably favor one type of organization over another.
  • Competition plays a key role in value creation even in health care. This is particularly true in the private health insurance market in which CMS now is a major participant through the Exchanges. CMS along with the FTC and DOJ must be vigilant in preserving competition.
  • Beneficial network integration does not have to be sacrificed to preserve competition. Through health information technology and aligned incentives, independent health care organizations can come to together to create beneficial networks that do not rely on hierarchical ownership structures. These groups go by many names — such as accountable care organizations, conveners, or virtual groups. CMS should support the concept that clinicians can be integrated in their delivery of health care without being in the same corporate structure.

In particular, if CMS creates AAPMs that favor larger organizations, further consolidation will occur, thereby eroding competition. The goal should be that no one will be able to claim that “MACRA forced me to consolidate.” To ensure this does not happen CMS should

  1. Define “more than nominal financial risk” such that smaller practices are motivated but do not face an existential threat. We propose basing financial risk on the participating APM Entity’s Part A and B Medicare revenue, and a pathway for making it available in time for 2019 payments.
  2. Allowing independent practices to come together in “virtual groups” now for all aspects of MIPS reporting, and rewarding their clinical practice and health IT advances as they work towards participation in APMs (like gain share only ACOs) and on to AAPMs.
  3. Providing administrative flexibility for these small businesses by comparing their performance under MIPS to that of their peers by practice size.

By making these small, but important, changes to the implementation of MACRA, we believe that CMS will create a path for independent practices to thrive, deliver high quality care, and reduce costs. This will benefit patients, doctors, and the health care system overall.[iii]

[i] Mostashari F, Sanghavi D, McClellan M. Health Reform and Physician-Led Accountable Care: The Paradox of Primary Care Physician Leadership. JAMA. 2014;311(18):1855-1856. doi:10.1001/jama.2014.4086.

[ii] The Paradox of Size: How Small, Independent Practices Can Thrive in Value-Based Care Ann Fam Med January/February 2016 14:5-7; doi:10.1370/afm.1899

[iii] J. Michael McWilliams, M.D., Ph.D., Laura A. Hatfield, Ph.D., Michael E. Chernew, Ph.D., Bruce E. Landon, M.D., M.B.A., and Aaron L. Schwartz, Ph.D. N Engl J Med 2016; 374:2357-2366 June 16, 2016 DOI: 10.1056/NEJMsa1600142

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)


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.