Today, we submitted to CMS our comments on the proposed changes to the Medicare Shared Savings Program. This year represents the second major revamp to the program and comes with a new name, Pathways to Success. On the whole we believe the ACO program is going to be stronger than ever before. Below are our full comments on the proposed regulation. Fair warning these are technical comments on a 600+page regulation so there are a few words more than a normal blog. For more background on what CMS is proposing we encourage you to take a look at our overview of the proposed changes and our deeper dive into the benchmark changes.

Aledade (www.aledade.com) partners with 339 primary care physician practices, FQHCs and RHCs in value-based health care. Organized into 20 accountable care organizations across 24 states, these primary care physicians are accountable for over 320,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than 10 clinicians. We are committed to outcome-based approaches to determine the value of health care. We are committed to using technology, data, practice-transformation expertise and, most important, the relationship between a person and their primary care physician to improve the value of health care.

We appreciate CMS’s effort to continue to align MSSP’s financial incentives with value creation in Medicare. Better alignment means that savings accrue from unnecessary hospitalizations that were avoided, wasteful testing that was eliminated, uncontrolled diabetes that become managed, and better quality of life for Medicare beneficiaries. Poor alignment can leave savings up to chance, or worse, contingent upon stinting and cost shifting or other factors that do not positively affect the lives of Medicare beneficiaries.  We offer our comments on increasing financial alignment and increasing participation in the Medicare Shared Savings Program (MSSP) so that more Medicare beneficiaries can receive the benefits of lower costs and higher quality that physician-led ACOs offer.

By every measure, the MSSP is saving Medicare money and improving quality. Today it is simply the most cost effective way to provide Medicare benefits to the American people. Yet performance among ACOs is uneven, and with the right policy environment, the potential for much greater cost savings and even better quality is within our grasp.

In the proposed rule, CMS provides a comprehensive and in-depth assessment of the MSSP. CMS found that Medicare ACO efforts reduced total FFS Medicare Parts A and B spending in 2016 by about 1.2%, or $4.2 billion (after accounting for shared savings payments but before accounting for additional savings from the potential impact on MA plan payments). If FFS spillover effects are included,  the savings rise to 1.7 percent, or $5.95 billion. CMS should include the full FFS spillover effects in the savings calculations of the final rule. CMS also found that the savings varied markedly between low revenue ACOs and high revenue ACOs with low revenue ACOs accounting for nearly all of the savings to Medicare. This finding is supported by recent research from Harvard that found savings concentrated in ACOs composed solely of physicians, rather than those that include hospitals. We also compared MSSP performance to the Next Generation ACO program and found that low revenue ACOs even outperformed Next Generation ACOs.

It is this performance that should drive Pathways to Success. First, CMS should encourage more low revenue ACO participation. Second, CMS should increase financial alignment with value, particularly for high revenue ACOs. Our comments all emanate from these two objectives, which will ultimately promote cost savings in ways that are good for patients, good for health care providers and good for society.

As CMS charts the evolution of MSSP into the Pathways to Success program, we encourage CMS to value a dollar of cost savings generated through ACO performance more highly than a dollar saved through reduced shared savings payments to ACOs. The current impact analysis of the proposed rule has Pathways to Success saving $330 million in “net federal impact”  through 2024 compared to the current state, but that was accomplished through $390 million in reduced payments to 169 fewer ACOs. The loss of participation- especially by low revenue ACOs- causes $60 million in INCREASED claims costs, and comes at a real cost to beneficiaries. CMS should prefer reduced costs that represent fewer unnecessary hospitalizations, less waste in the system and healthier people. We encourage CMS to set a goal for the final regulation to generate more savings from reduced costs than from reduced shared savings payments.

The most direct way to further reduce medical costs is to increase low revenue ACO participation. To achieve this, we suggest the following:

  • Increase the proposed range of the shared savings rate in Basic (A-E) from 25 – 50% to 40 – 60% to provide an adequate return on investment and to encourage more risk taking
  • Reduce the minimum savings rate for low revenue ACOs to decrease uncertainty and provide early returns on investment to support the transition to risk
  • Eliminate or, at minimum, increase the proposed cap on the regional benchmark to create long term stability and strong incentives for ACOs to achieve and, just as important, maintain a high level of regional efficiency
  • Finalize the proposal to allow ACOs to choose retrospective or prospective assignment so that ACOs can match their interventions to their preferred assignment methodology

We offer greater detail on each suggestion later in this letter.

Greater financial alignment with value creation can also generate more cost savings. CMS’s proposals greatly increase financial alignment. To increase it even further, we suggest the following:

  • Remove the ACO assigned beneficiaries from the regional benchmark and regional trend because their inclusion disadvantages rural ACOs, and the “small numbers problem” can be easily addressed as other CMS programs demonstrate
  • Do not finalize the blended regional/national trend proposal; it does not address the problems created by the inclusion of the ACO’s assigned beneficiaries in regional trends and it creates uncertainty for the ACOs
  • Increase the cap on changes in risk score from +/- 3% to +/- 5% to focus only on outliers and to remove any incentive for ACOs to avoid risky beneficiaries
  • Increase the final regional benchmark percentage to 70% from the proposed 50% to create long-term stability in the program and move to a structure more similar to Medicare Advantage
  • Finalize the proposed glide paths to two-sided risk
  • Finalize the ability to transition to higher levels of risk as soon as the ACO is ready
  • Shorten the time frames for surety bonds to reduce the costs of going to risk without compromising the financial guarantees to CMS
  • Do not increase the administrative burden on ACOs with either disproven or unproven beneficiary notification methods

We offer greater detail on each suggestion later in the letter.

We greatly appreciate the considerable thought and analysis that CMS has devoted to the proposed Pathways to Success program. Our comments focus on refining the proposals to create even greater participation and alignment; only rarely are we in opposition to the proposals. We look forward to working with CMS to increase the savings to Medicare through Pathways to Success, and ultimately deliver better Medicare experience for beneficiaries.

Increasing ACO Participation

CMS enjoys a remarkable return on its investment in MSSP; Track 1 low revenue ACOs generated savings to Medicare of $73 per beneficiary against benchmark in 2016 and those savings appear to be growing each year. Each additional low revenue ACO that joins the MSSP represents future savings and better care for Medicare beneficiaries. But for an ACO to join Pathways to Success, a reasonable return on investment to the ACO must also be attainable. In order to determine a rate of return to the ACO, assumptions on the investment must be made.

To calculate the type of return an ACO needs to achieve, we look at CMS’ own estimates of what it costs to run an ACO from the AIM and CPC+ models.  For a 10,000-person ACO, AIM makes a $1,570,000 investment in the first year and a $960,000 investment in the second year, totaling $2,530,000. For a 10,000-person practice, CPC+ Track 2 makes a recurring annual investment of $3,360,000 – considerably more than the AIM. The average benchmark for an MSSP ACO in 2017 was $10,554 making the total spend for this same 10,000 person ACO $105,540,000. For AIM, this represents an investment of 1.5% of the total cost of care in the first year. For CPC+, the investment is a whopping 3.2% of total cost of care every year. It is against these investments that CMS should consider appropriate shared savings rates and other policies in order for Pathways of Success to succeed.

Increase the Proposed Basic Shared Savings Rate

We cannot recommend that CMS finalize its proposal to reduce the shared savings rate from 50% to 25% for one-sided risk. While we support the principle of rising share rates with rising risk,  a 25% share rate is simply inadequate to support the investments an ACO makes. We recommend that CMS use 40%–60% as the range for Basic (A-E) because this will justify the requisite ACO investments and encourage ACOs to take on more risk.

At a share rate of 50%, ACOs must reduce costs by 3% to break even on AIM-level investments and 6.4% to break even on investments at the CPC+level. Only 16% of first-year ACOs achieved 3% savings and only 6% achieved 6.4% savings. So the vast majority of ACOs will begin at with an  investment deficit, and it can accumulate year over year. If CMS were to lower that rate to 25%, only 7% of first-year ACOs would break even at AIM levels of investment, and not a single ACO would have repaid CPC+ levels of investment. By raising the share rate to 40%–60%, CMS maintains the possibility of a return on investment for the best performers in the early years of ACO participation, while maintaining its proposed glidepath to risk in the Basic track.

Basic Level A Level B Level C Level D Level E
NPRM 25% 25% 30% 40% 50%
Aledade Recommendation 40% 40% 50% 55% 60%

 

By encouraging greater participation in Pathways to Success, CMS would be making its own investment in future savings that will more than offset the greater shared savings payments under our recommendation.

Lower the Minimum Shared Savings Rate for Low Revenue ACOs

We support encouraging low revenue ACO participation by offering a lower MSR. As discussed in the previous section, even at higher levels of sharing rates, the first few years of population health are unlikely to generate savings against a historical benchmark that are sufficient for an early return. As ACOs begin to generate savings and shift the cost variation curve to the right it becomes more likely that they will cross the MSR, but not guaranteed until later years. This makes it difficult for low revenue ACOs to achieve sufficient returns to bear risk with adequate reserves. We recommend that CMS lower the MSR for low revenue ACOs in Basic Level A and Level B by 2% from the current MSR. For example, a 10,000 person ACO has a current MSR of 3%; under this recommendation it would be 1%.

This proposal would make it much more likely for low revenue ACOs to see early returns on their investments, which would support earlier transitions to risk and prevent ACOs from dropping out of the program. Although we understand  CMS is concerned about ACOs that do not make investments and still receive savings payments, we believe several forces mitigate this possibility. First, low revenue ACOs generate net savings to Medicare even in Track 1. Second, the availability of the lower MSR is time limited to two years under the proposed Basic track. Third, as shown in the analysis that accompanied the NPRM, savings against benchmark under represents the total savings to Medicare. CMS still retains 100% of the savings not reflected in benchmark performance regardless of MSR. According to the analysis in the regulation, a low revenue ACO with 10,000 Medicare beneficiaries would have saved Medicare $730,000 in 2016. CMS simply can’t afford not to have more low revenue ACOs. We believe that the performance of existing ACOs will continue to improve, but if we ever hope to turn 2016’s $6 billion in savings into $60 billion, we will need considerably more ACOs. Creating a more predictable, reasonable return on investment will spur the private investment needed to make this happen.

As part of this proposal, CMS should be vigilant about potential gaming of the low revenue designation. We define gaming as a scenario in which owners of ACO participants are not official  participants in the ACO, thereby allowing the ACO to qualify for the low revenue designation. We suggest two possible solutions to address this concern. CMS could simply lower the low revenue designation from 25% to 15%. We note that the actuaries’ impact analysis used the even lower 10% to draw the distinction. Alternatively, CMS could continue the Track 1+ policy of requiring ownership attestations from ACO participants.

Apply Regional Adjustment Earlier but Remove the Proposed Cap

We support CMS’s proposal to apply a regional adjustment in the first contract period, but we do not recommend that CMS finalize its proposal to cap the regional benchmarking adjustment. At a modest 25% or 35%, this adjustment provides a duly-earned incentive for efficient practices in their first contract period, without discouraging less efficient providers to enter an ACO and improve. It also provides predictability and simplicity for ACOs as they seek to understand the nuances of the regulatory environment.  Finally, it accelerates the process of making MSSP more like Medicare Advantage, which is a CMS goal that we support. However, we are concerned about the 5% cap on the regional adjustment, and we propose eliminating it while CMS gains more experience with Pathways to Success. If CMS does not eliminate the cap, we recommend increasing it to 8% and applying it at the aggregate level not the eligibility category level, which is an efficiency return similar to what Medicare Advantage plans can receive net of their administrative costs for administering the plan (~7%).

We understand CMS’s concern about allowing large windfalls for regionally efficient practices, but such a cap should capture only true outliers, which would suggest a cap greater than 5%. In considering a cap, it is imperative to consider the inherent policy tradeoff, and we believe that CMS is overly concerned with biased ACO selection, in which ACO participants skew heavily towards already efficient providers. There are several reasons why this should be less of a concern, and why increasing the cap to 8% at the aggregate level strikes a better policy balance. First, even if ACOs were able to identify such practices using historical data and to sign up a portion of those practices, such efficiency is likely to revert to the mean, including during the gap between when data is available, and when the performance period starts. Furthermore, by capping the regional adjustment of an ACO at 5%, CMS is reducing the incentive for the practices within an ACO to continue to improve. Such a policy would create essentially a 100% tax rate that sends the wrong behavioral message to ACOs, to rest on their laurels. This is especially true if CMS applies the cap at the individual eligibility category level. If an ACO were to cap out on ESRD patients or dually eligible patients, the ACO would be incentivized to no longer improve on those patients even though much more may still be done for them. It is extremely difficult to achieve regional efficiency, and even more difficult to sustain it. Medicare should not implement policies that penalize physicians for further improving on high-quality, cost-efficient care.  Finally, just as in Medicare Advantage, a dynamic free market, profits will allow providers that have achieved and sustained ever higher levels of patient care and efficiency to expand their practices and attract greater number of patients, which is beneficial to both patients and taxpayers.

The proposal to cap the regional adjustment is also not in keeping with CMS’s desire to promote physician-led ACOs, which are organizationally and empirically in a better position to succeed in shared savings arrangements. In a changing landscape of value-based care, these physicians face immense pressure to join hospital systems, which can offer them higher salaries and technological and regulatory support. However, we know that independent physicians would prefer to remain autonomous and hope to resist the financial temptation of the hospitals. We also know that such hospital-physician vertical consolidation is harmful to Medicare and our health care system more broadly. Hospital acquisition of physician practices reduces patient choice, promotes more concentrated markets, increase prices and reduces incentives to deliver high-quality care. Rewarding physician practices for their efficiency compared to large hospital systems may very well be the best way to keep them independent. At a minimum, CMS ought not to implement policies that reduce the financial proposition of remaining as an independent.

Allow Choice of Assignment Methodology

We support the proposal to allow all ACOs to choose between retrospective and prospective assignment. We appreciate CMS’s efforts to include waivers in both methodologies. The inclusion of the waivers in both methodologies is key to making this policy a true choice for the ACO. It is not obvious that one approach is better than the other for population health. It is also very likely that ACO characteristics mean the better approach may vary by ACO. For example in a recent National Association of ACOs report, prospective assignment only assigned 79% as many beneficiaries that retrospective assignment did. Smaller ACOs might not cross the 5,000 threshold with prospective assignment. Other ACOs might prefer the “tune-up” period for new patients that prospective assignment creates where they are a new patient in say June of 2018, but won’t be assigned until 2019. Given the variability, we believe CMS makes the right proposal to leave the decision in the hands of the ACO.

Aligning Financial Incentives with Value

Remove ACO Beneficiaries from Regional Comparisons

We strongly recommend that CMS remove an ACO’s assigned beneficiaries from regional benchmarks and regional trends. We continue to believe that the adverse effects of this policy are underappreciated. In 2016, CMS introduced the regional benchmarking methodology for ACOs that included the ACO’s assigned population in the comparison group. This has two effects which increase as the ACO’s share of the county population grows. First, in order to demonstrate savings, ACOs must fight against the very progress they are creating. A rural ACO with 50% market share would have to generate 6% in real savings to be recognized for a 3% savings against regional trend. Second, the ill effects of this policy are exacerbated by imposing a cap an ACO’s risk score, yet still incorporating uncapped risk increases of an ACO’s population in the region’s risk score. Every ACO loses calculated savings compared to regional trends whether their risk score increases or decreases. This discourages ACOs from moving to two-sided risk and reduces  the Medicare savings ACOs create. Most egregiously, this policy systematically disadvantages rural ACOs compared to urban ones. By adopting the policy of removing ACO beneficiaries from regional comparisons, CMS will increase the participation of rural ACOs in Pathways to Success.

The table below demonstrates the effects of this policy on ACOs. In our example, we have an ACO with a historical benchmark of $9,000 in a region where all the beneficiaries outside the ACO have average annual expenses of $10,000. For simplicity, risk is held constant; hence, beneficiaries in the ACO cost $1,000 less per person, risk adjusted, than the beneficiaries outside of the ACO. We also assume that the ACO reduces costs by 5% in the performance year, from $9,000 to $8,550, generating $450 in historical savings. Assuming a regional bonus of 35% of the regional benchmark difference, the combined regional savings and historical savings of this ACO is $800 per person ($1,000 x 35% + $450). Yet, as the table illustrates, if the ACO’s beneficiaries are included in the regional comparisons CMS starts to capture 100% of those savings at a rate that increases in direct proportion to market share.

Clearly, an ACO that represents 5% of its market and captures 95% of the generated savings is more likely to move to risk than an ACO that represents 35% of the market and only captures 65% of its generated savings. It is also true that the ACO with 5% market share is almost certainly urban, while the ACO with 35% market share is likely rural. We include the market share of Aledade ACOs in 2016 as an example. The primary driver of the percent market share is location, not size nor composition, as all the ACOs are all made up of primary care physician offices.

*ACO 15 includes Philadelphia

*ACO 14 includes New York City

*ACO 13 includes Orlando

*ACO 12 includes Philadelphia

CMS has raised one concern with the removal of an ACO’s beneficiaries from the regional benchmark. This concern is that without the ACO’s beneficiaries, some rural counties will not be large enough to calculate a meaningful regional benchmark and/or regional trend. First, while this poses a challenge, simply sacrificing those most harmed by the policy cannot qualify as an tenable solution. Second, CMS has historically dealt with this small numbers issue in a much fairer way. Medicare Advantage, whose members are not included in the calculation of their rates, encounters the small numbers problems due to high MA penetration. CMS’s solution is not to put Medicare Advantage members back into the rate calculation, but simply to expand the geographic area under consideration from the county to the state. Given the variety of size amongst states, we recommend a more narrow geographic expansion. We recommend that for counties with small populations, the geographic area be expanded from the county of beneficiary residence to all the counties that are in the same hospital referral region (HRR). We considered recommending that all contiguous counties be included; however, for some suburban counties, this could result in the addition of one more urban county in the direction of the tertiary care, and several more rural counties further from tertiary care, ultimately distorting the comparison. By including all the counties in the same HRR, CMS would create a region that is based on common health care service utilization. HRRs are defined by zip codes, but for simplicity we recommend that CMS include all of the counties that are in the same HRR, even if the entire county is not in the HRR. Failure to address this easily solvable problem unjustifiably disadvantages rural ACOs and thereby discourages their participation.

We recognize that our proposal, which would necessitate county benchmarks unique to every ACO, may be burdensome for CMS if the underlying infrastructure is not flexible. While not as precise, CMS could apply a mathematical adjustment to the existing regional calculations to simplify the process. The regional efficiency (regional benchmark compared to ACO benchmark) and regional trend could be multiplied by 1 divided by (1-ACO’s market share).

True Regional Trend = (Regional Trend including ACO beneficiaries) x (1/(1-ACO Market Share))

True Regional Efficiency = (Regional Risk Adjusted Costs including ACO beneficiaries – ACO Risk Adjusted Costs) x (1/(1-ACO Market Share))

Because this adjustment would be a less accurate measure of the regional trend and regional benchmarks, we would encourage CMS to consider using assignable, rather than assigned, beneficiaries in calculating the adjustment, in order to capture spillover effects. We note that this does not directly address the small number problems and that expansion to HRR may still be warranted in some cases. Overall, we encourage CMS to calculate CMS regional benchmarks and regional trends without the ACO’s beneficiaries; however, if the burden is too high, we believe that this adjustment methodology is better policy than both the current inclusion of the ACO beneficiaries and CMS’s proposed blending of the regional and national trends.

CMS claims in the proposed rule that by blending regional trends with national trends at the percent of market share alleviates the problems created by including ACO beneficiaries in regional comparisons. First, it does not address at all the reduction in the regional benchmark. CMS’s own analysis shows that nearly half of ACOs already disadvantaged by this policy would see additional cuts as a result of the blended national rate. Referring back to our table, an ACO at 35% market share would only receive 68% of the regional bonus that an ACO at 5% market share would receive, even if it has an identical $1000 difference between its beneficiaries and the others in their regional. The blended trend does nothing to effect this disparity. Second, we do not believe the blended trend addresses the problem with including beneficiaries in regional trend. For example, consider a hypothetical ACO that has 20% market penetration and reduces costs by 5% in a region where trend increases by 5% in the 80% of beneficiaries not assigned to the ACO. Under current methodology, the regional trend would be 4% for the region (5% x 80% + 0% x 20%). Under the proposed rule, the regional trend would still be 4%, but it would only account for 80% of the trend (3.2%). National trend would make up the other 20%. If national trend is 3%, then the hypothetical ACO would be at a lower trend than the current policy would dictate (4% x 80% + 3% x 20% = 3.8%). This example ACO would have been been better off under the current policy. Even in a favorable scenario, where national trend is higher than regional trend would be under current policy, this is only adequate if national trend is higher than regional trend would have been without ACO beneficiaries included. This effectively shifts savings from high-trend to low-trend areas. We address this policy goal later. We believe we have demonstrated that the blended trend does not solve the problems created by inclusion of the ACO’s beneficiaries in regional trend, which moves savings out of rural areas and into urban areas.

Use Regional Trends as the Most Accurate Measure of Value

We cannot recommend that CMS finalize its proposal to blend regional and national trends based on ACO market share. We support the use of regional trends in all years. CMS gave two reasons for the blended trend rate. First, it was billed as a partial solution to the ill-advised inclusion of ACO beneficiaries in regional benchmark and regional trend. As discussed previously, it is a rare case in which the blend accomplishes its goal and, in those cases, it is merely by chance. This simply does not work and should not be the basis of a finalized CMS policy. Second, by including national inflation, CMS has yet again decided to reward low-trend regions and to penalize those areas with high trends. The original statute enacting MSSP, as well as the first regulation for MSSP, also sought to use national trends to similarly sacrifice direct measures of value creation, in favor of other policy ends. The flaw has always been that it measures ACOs based on uncontrollable factors: an individual ACO is not responsible for whether its area is high cost or low cost, and it is often not responsible for cost changes in the region.

The combination of these two policies has created a great deal of uncertainty in ACOs. For example, in the first performance year of one of Aledade’s ACOs, a new rehabilitation hospital opened early in the year. This increased rehab costs by ~1% of the total cost of care, creating a permanent headwind for the ACO. In another rural Aledade ACO, patients began receiving adequate access to certain Part B drugs, which increased Part B drug expenditures by 27%. This regional development was excellent for Medicare beneficiaries, but made it virtually impossible for the ACO to generate savings. Unobservable on national trends, both examples had profound effects in the region. Further, non-medical examples abound such as when hurricanes or other natural disasters impact any area, the regional trend justifiably deviates from national cost growth. CMS should move away from national trends because they confound the measurement of results that are controlled by and attributable to the providers in an ACO.

Improving Utilization of Risk Adjustment

We support CMS’s proposal to eliminate the the distinction between newly and continuously assigned patients and apply the HCC scores of the assigned population to adjust the benchmark. This simplifies the risk adjustment methodology, aligns it with value generation for greater predictability, and makes the MSSP operate more like Medicare Advantage.

To reduce gaming, the current model allows risk scores of continuously assigned patients to decrease, but not increase. Therefore, practices are inherently disadvantaged by changes in the acuity of their patients: if their population becomes sicker over the course of the contract period, the benchmark is not increased; if their patients become healthier, the benchmark is decreased to reflect the lower predicted spending. Considering the sensitivity of the benchmark to risk scores, these small increases in population acuity over the course of the contract period can meaningfully harm ACO performance. The disadvantage of asymmetric risk adjustment for continuously assigned patients is mitigated, in part, by allowing the newly assigned population to receive symmetric changes in risk scores. But the effect is minimal, and the bifurcation of the ACO population (newly and continuously assigned) introduces complexity and unpredictability. As such, we support the elimination of this distinction, coupled with a symmetric risk adjustment model.

We support CMS’s proposal to adjust benchmarks based on risk, in order to decrease actuarial risk, particularly for smaller physician-only ACOs. We are also sensitive to CMS’s concerns about gaming, and we thus support a risk adjustment cap. However, such a cap ought to be set as an outlier policy that prevents excessive upcoding. If CMS retains a cap, not only should it be raised, but CMS should also apply the cap at the aggregate level of the ACO, not the individual eligibility categories (ESRD, Disabled, Dual, Aged/Non-Dual), and CMS should consider overall ACO size when choosing an appropriate cap.

There are other reasons besides focusing on outliers to increase the size of the cap. If the cap is set too low, CMS is incentivizing “cherry picking” and “lemon dropping,” wherein providers face strong incentives to select healthy patients and avoid the sickest patients, once the contract period begins. We believe that the proposed 3% cap should be raised to 5%, in order to avoid these perverse incentives. Indeed, in the proposed rule, CMS reviewed trends in HCC risk scores in the MSSP and states that “a 3% cap…would limit positive risk adjustment for less than 30% of ACOs, even when there is a 5-year lapse between BY3 and the performance year.” Thirty percent is far too great of a proportion to harm in this way, and it will unjustifiably penalize ACOs who care for a population whose risk increases over the course of the contract period. We encourage CMS to re-run its analysis to determine a cap that would hinder 10% or less of ACOs. We hypothesize that a +/- 5% cap at the aggregate level of the ACO would be sufficient. As alluded to above, it is critical that the cap is applied at the aggregate level because some categories have much smaller populations and therefore will vary naturally more than the aggregate ACO population; this methodology will ensure that the risk adjustment cap is an outlier policy that discourages lemon dropping. Further, we encourage CMS to consider whether the cap should vary by ACO size, considering that, for example, a 5,000 assigned beneficiary ACO will have more variation than a 50,000 assigned beneficiary ACO.

Finally, as more ACOs bear risk and become efficient, high-quality alternatives to Medicare Advantage, CMS should consider policies that equalize current actuarial disparities that result from risk adjustment. Medicare Advantage allows for annual and uncapped changes in risk scores, creating strong incentives to code intensely. In 2016, risk scores were 8% higher in MA than FFS for similar patients, according to the Medicare Payment Advisory Commission (MedPAC). And accounting for the coding intensity adjustment, which applies an across-the-board coding reduction for MA patients, risk scores remained 2 to 3% higher in MA, compared to analogous FFS patients. By setting the MSSP risk adjustment cap as an outlier policy, and thereby allowing accurate and comprehensive diagnostic communication of risk for ACOs, CMS will begin to create more equivalence between MA and FFS.

Increase Regional Benchmark Percentage to 70%

As we noted in our comments addressing the regional adjustment cap, we support CMS’s proposal to introduce a regional component of the benchmark in the first contract period. We agree that the initial regional benchmark percentage should be set at 25%/35%, but this percentage should be increased to 70% in subsequent contract periods, rather than capped at the proposed 50%. It is worth emphasizing that CMS has proposed not only to reduce the regional benchmark percentage to 50%, but also to impose a cap of 5% on the regional adjustment. We understand CMS’s impetus for these proposals, but it is a substantial over-correction – and it creates a new set of ill-advised incentives that reduce the long-term viability of cost-efficient ACOs. We recommended eliminating the cap. Alternatively, we recommended an 8% cap tied to regional efficiency gains that can be expected in Medicare Advantage. If CMS does finalize a cap, we believe it is redundant to also lower the percentage from 70% to 50%.

ACOs are Medicare’s most efficient delivery system; the MSSP saves money relative to FFS and MA, and it performs better on quality metrics. Given that MA benchmarks are effectively calculated with a 100% regional component (no historial factor), CMS’s proposal of 50% regional adjustment for ACOs is a regression from the goal of MA-MSSP harmonization; it would codify a substantial divergence from MA and stymie cost-effective ACOs that wish to become risk-bearing ACOs. A 70% regional factor for second-contract ACOs justifiably aligns these risk-bearing providers with Medicare Advantage.

Finally, we anticipate that CMS may be deciding between finalizing the risk adjustment cap of 5% or reducing the regional factor to 50%. In this scenario, we would encourage CMS to choose to eliminate or raise the cap.

Create a Glide Path to Two-Sided Risk

We support the proposal to create a glide path to two-sided risk in Basic based on the use of revenue-based risk. We believe revenue-based risk properly motivates positive change without threatening the financial viability of physician practices. There has been considerable focus in the ACO community on the right time to require ACOs to transition to risk. We do not take a position on the optimal year and instead focus on the progression to risk. We support CMS starting with low levels of risk and progressing towards risk adequate to justify the AAPM bonus. We also support the proposal for ACOs to stay at revenue based risk for another full contract in Basic Level E. Finally, in light of all these proposed changes, we would encourage CMS to allow ACO participants to switch ACOs on the July 2019 start date, even if the ACO participant is in an ACO with an existing ACO agreement that runs past July 2019.

Allow ACOs to Transition to Risk Faster

We support the proposal for five year contracts, but only if ACOs can more quickly move to risk within Basic and can move to Enhanced in any performance year. CMS should not prevent ACOs from moving to risk as soon as they are ready to do so.  While a clear minimum glidepath advances the goals of risk bearing without deterring participation , the ability to assume risk more quickly is equally crucial for ACOs that are ready. If CMS wants to maximize ACO risk taking, this policy is key.

Shorten the Time Frame for Maturity of Surety Bonds

We cannot recommend that CMS lengthen the time frame of the repayment mechanism from 5 years to 7 years. We suggest that CMS institute a 3 year repayment mechanism that is renewed annually. These recommendation are based on our experience securing surety bonds for risk taking ACOs.

In 2018, three Aledade ACOs entered into two-sided risk contracts under the current Medicare Shared Savings Program.  Of these three ACOs, two participate in the “higher reward – higher risk” Track 3 contract (representing 50% of all 2018 entrants into Track 3). We secured surety bonds to meet the 1% requirement for the Track 3 ACOs. We look forward to bringing many more of our ACOs into two-sided risk; however, the cost is already substantial.

Under the proposed rule, all ACOs will be required to take two-sided risk within three years. As a prerequisite to take on two-sided risk, ACOs must demonstrate their ability to repay shared losses by setting up repayment mechanisms.  The repayment mechanisms can be (1) cash in an escrow account, (2) surety bond, or (3) letter of credit from a bank.

The repayment mechanism amount required is significant and can range from $100,000 for an ACO with 5,000 assigned beneficiaries under the BASIC track, to $5,000,000 for an ACO with 50,000 assigned beneficiaries under the ENHANCED track. The proposed 7-year term required for repayment mechanisms raises the cost much more than simply adding two years would suggest.

Surety bonds or letters of credit can reduce the liquidity burden of the repayment mechanism, as they allow for lower cash collateral.  However, the requirement to maintain a 7-year term severely limits the availability and attractiveness of surety bonds as an alternative to posting cash in escrow which limits the ability of an ACO to invest in savings.

Typically, surety bonds are nearly always issued for a maximum of 5 years, due to reinsurance and regulatory complications surfacing beyond this time frame.  Most notably, reinsurance treaty prohibits insurers from writing bonds with terms exceeding 5 years.

Aledade has brought CMS’s proposal to the attention of One Beacon Surety Group, Philadelphia Insurance, Liberty Mutual and Swiss Re. After discussion and analysis both organizations came to the conclusion that if the proposed  7-year term is finalized, all surety bonds would require the full 100% collateral. This would impose a significant liquidity and capital burden, limiting a ACO’s ability to invest in innovations that deliver higher quality care at lower cost.  This would be especially problematic for physician-based and small, rural ACOs, neither of which have access to low-cost capital.

As noted in the proposed rule, the 7-year term would also introduce challenges regarding repayment mechanism amount estimations at the start of each performance year, as well as changes to the estimated amount upon contract renewal with term extensions.  While the proposed rule attempts to allow ACOs to re-use existing repayment mechanisms, in practice these repayment mechanisms (other than escrowed cash) will be re-underwritten and reissued on an annual basis.

Therefore, Aledade strongly urges CMS to set the Pathways to Success repayment mechanism duration to 3 years, with a required annual renewal with the appropriate updated repayment mechanism amount. We also recommend that CMS only require the value of the repayment mechanism to change if it increases by 10 percent or more. CMS’s proposal to use the lesser of 10 percent or $100,000 would require nearly all ACOs with a total cost of care of $200 million or more to reset every year, which would greatly increase the burden on CMS and the ACO. These recommendations would allow CMS to (1) continue to protect the financial integrity of the program by ensuring that all continuing and renewing ACOs will remain capable of repaying losses, (2) streamline to one consistent repayment mechanism, and (3) preserve the viability of surety bonds and letters of credit so physician-led and small, rural ACOs access capital and liquidity.

Reduce, Do Not Increase, the Administrative Burden on ACOs

We cannot recommend that CMS finalize its beneficiary notification of voluntary alignment as proposed. We believe in voluntary alignment as an important expression of beneficiary choice. However, the proposed division of labor – wherein CMS crafts the message and the ACO delivers it – does not work. When ACOs were required to send out mailers regarding data sharing, the most frequent response was that the beneficiary did not want the government to have their data. The message was misunderstood by the beneficiaries and ACOs and physicians were left with the fallout from a message they did not craft. We believe CMS should take ownership of the process. It should both craft the message and disseminate it to assigned beneficiaries. If CMS does finalize a requirement for ACOs to educate beneficiaries about voluntary alignment, then CMS should delegate the entire process – both crafting and delivering the message – to ACOs.

Avoid Beneficiary Opt-In Requirements for Shared Savings Programs

We believe that requiring opt-in of all ACOs in the Pathways to Success program would end participation in the Pathways to Success program. The shared savings economic model simply does not support the type of investments that Medicare Advantage makes in an opt-in model. CMS would undoubtedly lose the cost savings demonstrated by ACOs in 2016 and 2017 and certainly would have no chance of greatly increasing those savings in future year. As hypothesized by CMS in the proposed rule, enrollment in Pathways to Success would fall dramatically and CMS would have to implement a much higher shared savings rate in order to support the large ACO investments that enrollment would require.

CMS also discusses the possibility of ACOs opting in to an enrollment model. We believe that anytime a beneficiary is subject to a restriction in providers or a less generous benefit than in traditional Medicare, the beneficiary should choose to enroll in a model. CMS is not currently proposing to offer ACOs either ability in the Pathways to Success program. If CMS were in the future to offer these options in Pathways to Success or in another model, we would encourage CMS to revisit enrollment as an option for ACOs wishing to include more advanced benefit design in their ACO work.

We look forward to continuing to work with CMS to incentivize more value creation in health care. Please contact me or Travis Broome (travis@aledade.com) if you have any questions about our submission and/or if we can be helpful to you and your staff as you consider the finalization of this regulation.

Today, we submitted to CMS our comments on the proposed changes to the 2019 Physician Fee Schedule. This year was more exciting than most with CMS proposing significant changes to how physician’s bill for evaluation and management services i.e. the traditional office visit. We worked with our partner physicians and analyzed over 700,000 claims to inform our comments on this proposal. Below is our full comment letter and analysis to CMS.

Dear Administrator Verma:

Aledade (www.aledade.com) partners with 272 primary care physician practices, FQHCs and RHCs in value-based health care. Organized into twenty accountable care organizations across 18 states, these primary care physicians are accountable for over 240,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than 10 clinicians. We are committed to outcome-based approaches to determine the value of health care. We are committed to using technology, data, practice-transformation expertise and, most important, the relationship between a person and their primary care physician to improve the value of health care.

For our comments on the 2019 proposed physician fee schedule, we focus on those issues closest to value-driven health care and to independent physician practices, including:

  • Changes to evaluation and management (E&M) documentation and payment
  • New codes for physician time spent with patients that is not face to face
  • Updates to the Quality Payment Program (QPP)
  • Changes to the quality measures in the Medicare Shared Savings Program (MSSP)

E&M Documentation and Payment

We are pleased that CMS is seeking to reduce the burden of E&M documentation. Despite being outdated and misvalued, E&M codes have remained largely unchanged in the last twenty years. This is mainly due to a lack of consensus on the best way to revise the documentation guidelines and payments in the physician and payer community. We evaluated the proposed changes with a belief that reducing physician burden is a worthy and long overdue goal.

Deciding which E&M Level
We support CMS’s proposal to allow for two new, streamlined approaches to determining the E&M level.

  • Basing the level of E&M solely on the complexity of the medical decision making required
  • Relying on time as the deciding factor for the level of visit without the focus on counseling or care coordination

By providing two alternative methods of documentation, CMS would allow physicians to match their choice to their practice style and patient population. CMS would also gain experience with the different methods that will inform future efforts to improve documentation focused on worthwhile medical record keeping and care coordination.

However, our partner physicians have given us important feedback that the impact of CMS changes are limited. CMS documentation requirements are not the sole driver of the current level of documentation in most practices. Commercial payers or malpractice concerns would continue to necessitate documentation even if CMS finalizes these proposals. We encourage CMS to continue to work with the AMA CPT editorial panel to revise the guidelines at their source to minimize unnecessary documentation across the entire patient panel.

E&M Single Payment Rate
We cannot recommend that CMS finalize the single payment rate for level 2 through 5 E&M visits, even with CMS’s efforts to use G codes to minimize the variance that a single rate would cause. This decision informed both by feedback from our partner physician practices and from our analysis of the effects the rate and G-codes would have on practice revenue. Specifically, we analyzed 771,011 2017 claims of 213 Aledade practices. We provide details of that analysis and detailed feedback from our partner physician practices in the appendix. Our key takeaways are:

Neither the documentation not the single payment rate can be evaluated with consideration of interaction with other Medicare policies and with policies outside of Medicare from other payers and regarding liability

  • Without the G-codes, the practices would lose 2.3% of their revenue from E&M
  • With the addition of the primary care-focused GPCX1, the practices would gain 3.2%
  • Practice level effects vary widely with a range of -19% to +41% (see graph below)
  • To eliminate the negative effects on 99% of the practices, the extended time code, GPRO1, would have to be billed on 29% of Level 4/5 visits
  • Beneficiary risk scores do not significantly account for practice level differences in utilization of level 4 and 5 visits versus level 2 and 3 visits

 

The graph below shows the distribution of change at the practice level:

This variation creates substantial revenue uncertainty for practices. Considering Medicare’s limited effect on overall documentation requirements faced by a practice and this uncertainty, we do not believe that payment rates are an appropriate tool to reduce physician documentation. We are also concerned about introducing harmful incentives. A single payment rate combined with the MPPR policy (discussed later) incentivizes frequent limited visits that inconvenience Medicare beneficiaries, at a minimum, and possibly create less cohesive care. While the G codes mitigate this to some extent, the incentive remains both to shorten visits and to prefer patients who can be well cared for in a short visit and patients who can easily make multiple trips to the office.

Home Visits
We support the CMS proposal to remove the requirement to justify the medical necessity of a home visit. Given the challenges of providing a home visit and the obvious convenience to the beneficiary, requiring justification is an unnecessary step.

Reducing the Least Expensive Procedure by 50 Percent
We cannot recommend that CMS finalize its proposal to require modifier 25 when a procedure is combined with an E&M visit. The savings from these policies are applied to the single payment rate by CMS, but the cost that they impose on our practices are not included in our analysis. This means that if both policies were finalized then the impact on practices would be more variable and more negative than in our analysis. However, we do not recommend this proposal for more than its interaction with the E&M single payment rate.

We disagree that there is significant enough overlap between resource use of procedures and E&M to justify a 50 percent reduction. The main overlap is in physical location of the office and administrative components that do not make up 50 percent of the RVUs for most procedures and E&M services. Nothing we have experienced with our partner practices would indicate that the savings to the practice for doing multiple services in a single visit would account for the 50 percent of the costs. Finally, this adds yet another financial incentive to the practice shorten visits. Even if CMS were to finalize the single payment rate for E&M we encourage CMS to not finalize these proposal in conjunction even if it means making adjustments to the single payment rate.

Non-Face-to-Face Physician Time

Chronic Care Management Services by a Physician or Other Qualified Health Care Professional
We support the creation of a separate code for CCM that focuses on and is valued on physician time. The lack of this code creates a disincentive for physicians to step into the care coordination process. By creating this physician valued code, CMS continues its movement to supporting comprehensive chronic care management that began with 99490.

Brief Communication Technology-Based Service
We support the creation of this code because we believe that this service falls between those which are obviously incidental and those which are defined and require direct financial support. However, we acknowledge that the low reimbursement of this code combined with the high administrative cost of the claims process creates concerns. In particular, we are concerned that the collection of the minimal beneficiary coinsurance could result in administrative collection costs that exceed the amount of the coinsurance. To the extent allowed by statute, we encourage CMS to allow practices to routinely waive the coinsurance for this code due to the high financial cost for the practice to collect it.

Updates to the Quality Payment Program
Promoting Interoperability
We support the proposal to apply the individual or group-level score for Promoting Interoperability (PI) for purposes of MIPS score even when the MIPS-eligible clinician participates in MSSP. Even in our more homogenous ACOs (same state, independent primary care), we have seen significant variance in the practice level-PI scores. As with any measurement program, high levels of measure performance requires not just good process and use, but a focus on measure monitoring. Some practices monitor their measures and seek to perform high on the measure. Other practices implement processes focused on workflow, not measure performance. Unsurprisingly the former scores better than the latter. Using the ACO average hides these differences and disincentivizes high scores. By moving the the score to the individual or group level, the choices made by the practice are accurately reflected in the MIPS score of the practice.

Qualifying Professional Determination
We support CMS’s proposal for making the QP determination at the TIN level in addition to the AAPM level. This is a particularly acute issue as the threshold rises to 50 percent. Even primary care-only ACOs receive attribution for only 60-75% of their patients, depending on ACO characteristics such as geography (rural areas have higher attribution than urban). The inclusion of specialists in the ACO, particularly specialists who do not drive attribution, quickly moves the ACO close to the 50 percent AAPM threshold. Having the 50 percent threshold at the AAPM level discourages additional inclusion of specialists in the ACO because it is difficult to predict whether a given specialist will take the ACO below the threshold and therefore remove the AAPM bonus for all ACO participants. We do not believe it is desirable for the QP determination to solely dictate whether an ACO includes a specialist. By moving the QP determination to look both at the TIN and AAPM level, CMS’s proposal to use an -and- methodology removes this disincentive to include specialists while maintaining the attractiveness of the AAPM bonus to ACO participants.

Quality Measurement in the Medicare Shared Savings Program
We support all the measure changes that are being proposed by CMS.
The table below is our measure-by-measure reasoning for this support.
Web Interface Changes

As we continue to look towards outcome measures over process measures, we urge development of a “time spent at home” (https://catalyst.nejm.org/time-spent-at-home-a-patient-defined-outcome/) or “days spent at home” (https://www.nejm.org/doi/pdf/10.1056/NEJMp1607206) patient-centered outcome measure using administrative data.

CAHPS Measures
We support both the inclusion of measuring ACO-45, “CAHPS: Courteous and Helpful Office Staff” and ACO-46, “CAHPS: Care Coordination” and the movement of ACO-7, “Health and Functional Status” to pay-for-performance. While it was not a proposal by CMS, we want to call attention to the increasing weight of CAHPS scores in accounting for differences between ACO performance. As an increasing number of Web Interface Measures top out (only three are not topped out) and as the claims-based measures are reduced in this proposal, the remaining measures for an ACO to distinguish themselves are in CAHPS. We are supporters of CAHPS measurement and do not believe CMS needs to take action in the final rule. However, it is something that CMS should monitor as the program progresses.

We look forward to continuing to work with CMS to incentivize more value creation in health care. Please contact me or Travis Broome (travis@aledade.com) if you have any questions about our submission and/or if we can be helpful to you and your staff as you consider the finalization of this regulation.

Sincerely,
/s/
Farzad Mostashari, MD, ScM
CEO and Co-Founder
Aledade, Inc.

Appendix: E&M Payment Rate Effects Data Analysis
To inform our views on the proposed movement to a single payment rate for E&M levels 2 through 5 and the addition of new G codes we analyzed billing data of 213 practices that were in ACOs participating in the Medicare Shared Savings Program in 2017. There were 771,011 claims that would have been affected by the proposed changes and, therefore, were included in the analysis. We used the 2019 conversion factor to value the RVUs of the 2017 claims in 2019 dollars. We then replaced the RVUs with the proposed RVUs of the single payment rate for the comparison. We adjusted for geography using the Geographic Adjustment Factor File included with the proposed rule. Finally, we applied GPC1X and GPRO1 to variable percentage of the 2017 claims to finish the comparison between 2017 revenue in 2019 dollars to 2019 revenue under the proposed rule

We were interested in the following questions:

  1. What was the mean effect of the policies on the 213 practices accounting for different use of GPC1X and GPRO1?
  2. Does the mean vary by geography?
  3. What were the practice level effects and what was the variation in the mean?
  4. Does practice risk score explain practice utilization of level 4 and 5 visits?

Mean Effect on the 213 Practices
For this first analysis we calculated the mean payment without GPC1X and with full use of GPC1X, by state. Later, we looked at the effects of GPRO1. It is unclear to us at what level GPRO1 would have been used in 2017 had it been available and therefore we account for it separately.


The effect of the practice level distribution with no G codes is negative with state level variation ranging from -$28,377 to gaining $23,104.

As these are primary care practices we ran the analysis assuming 100% of established visit claims use GPC1X.


As CMS expected the addition of the primary care focused G code moves the mean. For the practices in the analysis this means a now positive 3.2%. The geographic variation is essentially unchanged.

Next we looked at the practice level variation. This was the biggest area of concern raised by our analysis and directly led to our decision to not recommend that CMS adopt the proposal.

The above graph should the distribution of % change in practice revenue with 100% GPC1X use. Each block is a practice. As you see the range is dramatic from -19% lose to 51% gain.

While variation has its own costs it is the negatively impacted practices that are most affected. Whether a practice is positively or negatively financially impacted is a direct relation to the ratio of level 4 and 5 visits to level 2 and 3 visits.

We believe it stands to reason that the use of GPRO1, the prolonged visit code would be more likely to be used in level 4 and 5 visits and therefore would disproportionately and positively affect practices who without GPRO1 are negatively impacted financially.

The next graph assumes 15% of Level 4 and 5 Claims with Prolonged Visit Added On

As you can see this greatly reduces the number of practices negatively impacted from 93 to 25 while not increasing the range on the positive side of the graph. However, it does shift the mean from a 3.2% gain over 2017 to a 9.1% gain. We were not able to determine whether that shift can be adjusted for without increasing the number of negatively impacted practices. The ratio of visits with GPRO1, the value of GPC1X and the value of the single payment rate can be tweaked to create a variety of results. We are unable to estimate the rate GPRO1 would have been used in 2017 so the 15% of this graph is illustrative purposes only.

In another distribution we found that it would be necessary to have a GPRO1 use rate of 35% of Level 4 and 5 Claims to eliminate any practice with a loss. This would move the mean to 17.0%.

The final question we attempted to answer was whether HCC risk score controlled for differences in level 4 and 5 variation and could therefore be used to vary the single payment rate in a way that did not require documentation. While risk did reduce some variation (see three graphs below) it did not control for level variation enough to be a viable solution.

In addition to our analysis, the other driver of our decision to not recommend the proposal was feedback from our partner physicians. Below is a summary of the key points they provided to us. The feedback did include both support and concerns; however, unlike the revenue impacts which overall were favorable, the overall feedback was unfavorable.

  • If a physician is paid the same for 10 minutes as for 30 minutes and needs to maintain positive margins as a business owner, the incentive is to limit the volume of complex patients and maintain a practice that leans towards low acuity patients
  • Proposal adds yet more change without addressing the chronic underfunding of primary care
  • Malpractice concerns are the main driver of documentation levels not billing
  • Many visits that should be level 4 and 5 go out as 3s because the documentation is so onerous on a solo practitioner. This levels the playing field between small practices and large practices with billing departments.
  • If CMS can figure out how to level the reimbursement differences, the same principles apply to home visits (CPT 99341-99350) and CMS should do the same for those codes
  • As much concern for the 50 percent reduction in multi-service visits as for the single payment rate combined with G codes. Certainly that the 50 percent policy will reduce revenue, but the effects of the single payment rate on revenue is uncertain so lots of concern that the combined policies will reduce revenue

The comment period for Medicare’s proposed rule on the Quality Payment Program closed last night, so as usual we’ll take this opportunity to share our full comments on the proposed updates to how Medicare shapes the path to a value-based future.

August 21, 2017

Seema Verma, Administrator

Centers for Medicare & Medicaid Services

7500 Security Blvd

Baltimore, MD 21244

 

Re:       CMS-5522-P: Medicare Program, CY 2018 Updates to the Quality Payment Program

 

Dear Administrator Verma:

Aledade partners with 205 primary care physician practices, FQHCs and RHCs in value-based health care. Organized into 16 accountable care organizations across 15 states, these primary care physicians are accountable for more than 190,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than 10 clinicians. We are committed to outcome based approaches to determine the value of health care. We are committed to using technology, data, practice transformation expertise and most importantly the relationship between a person and their primary care physician to improve the value of health care.

Creating a path for independent practices to thrive in the transition to value-driven health care

  • Whole hearted endorsement of the inclusion of “the preservation of independent practices as a guiding principle for the Quality Payment Program (QPP)”
  • Virtual groups provide a needed step on the path to transition to value-driven health care by allowing independent practices to come together for QPP even if they are not ready to take on the total cost of care
  • Virtual groups are part of the path to value-driven health care that must be carefully crafted to be attractive to independent physicians
  • The low volume threshold proposal leaves too much of the Medicare spend and therefore too many Medicare beneficiaries out of the program. We recommend that no more than 10 percent of the Medicare Part B spend should ever be excluded from QPP.

Measuring QPP performance and reducing administrative burden

  • We recommend that the cost category for total cost of care be included for 2018.
  • We recommend that the AAPM bonus move forward a year with bonuses earned in 2018 paid in early 2019 or even in 2018 itself
  • We recommend that CMS value simplicity and minimizing administrative burden above other characteristics of the all-payer determination for APMs

Below is a full explanation of those positions. Thank you for your consideration as we move together through this exciting time in health care. Please feel free to contact Travis Broome (travis@aledade.com) if you or your staff have questions or would like to explore these positions further.

Sincerely,

/s/

Farzad Mostashari, MD

CEO and Co-Founder, Aledade, Inc

Independent Physicians Thriving in Transition to Value

Principle of Independent Practice

It would be difficult to overstate the importance of CMS’s inclusion of the preservation of independent practices as a principle of the QPP. Independent physician practices have proven to be the most successful in accountable care[1] and key to maintaining competitive health care markets.[2] The same characteristics that make the independent physician practices successful also make this principle particularly challenging for CMS to deliver on. Physicians must feel the change in their practice. There is no board room in small practices where a government affairs team will explain slight tweaks in policy that increase revenue by a half a percentage point. The preservation of independent practice in QPP will be felt by CMS’s continuous effort to reduce the administrative burden of participation in QPP through technology, policy and measure design and a continuous effort to link performance with incentives as tightly as possible.

Virtual Groups

We support CMS’s proposal for virtual groups. CMS specifically asked for comment on several additional requirements for virtual groups. We do not believe that at the onset it is advisable to set additional standards on virtual groups. We recommend the following principles to guide CMS’s finalization of the virtual groups.

  • Voluntary election by physicians to be in a virtual group prior to the start of the performance year
  • Agree to work together to improve their performance in QPP
  • Must agree to be scored on quality
  • Can elect to be scored on
    • Clinical Practice Improvement Activities
    • Advancing Care Information
    • Resource Use
  • Can utilize any reporting method including Group Practice Reporting Option (GPRO)
  • Identify to CMS the officer responsible for the virtual group’s reporting
  • The virtual group is responsible for ensuring group reporting (i.e. CMS should not be responsible for aggregating the data across practices except in the area of resource use and other claims based measures)

CMS has proposed that all virtual groups would be scored on all categories as a group. We believe that this could be a limiting approach. For example, it would dissuade any virtual group from admitting members who do have 2014 Certified EHR Technology due to the effects on the advancing care information score.

Finally, we recommend that CMS allow third-party entities to organize and report for QPP on behalf of smaller practices. The practices making up the virtual group should not be required to manage this process internally.

Successful Transition to Value Based Care

We continue to work together with CMS to define a path that both transitions to value based health care and preserves independence.

It is helpful to remember what the path looked like just 5 years ago:

These are all huge leaps. First, physicians must take responsibility for total cost of care in a way they never had before. Second, they must take on a level of risk that could ruin an independent practice. Third, they must develop health insurance operations. The size of those leaps simply prevents many physicians from taking the next step.

Today, with the proposal in this rule for virtual groups the path looks more achievable:

With this proposed rule CMS has smoothed out the move from FFS to total cost of care. In prior regulations, CMS made incremental progress on the move from one-sided risk to two-sided risk. While not specifically for this regulation, we recommend a path to CMS that bases risk on the financial wherewithal of the participants in the total cost of care model and lets physicians move to Medicare Advantage to assume full risk without the burden of claims processing and network development. Our recommendations for the former can be found in the blog for the American Journal of Managed Care[3] and for the latter in the blog for Health Affairs[4].

Our recommended path is:

We believe this path is ideal for encouraging independent practices to continue to make the transition to value based care where they have proven they can succeed at all levels in various pockets of the county. We know they can succeed not just here and there, but in nearly every health care market in the country.

Low Volume Threshold

CMS has proposed to raise the low-volume threshold to exclude individual MIPS-eligible clinicians or groups who bill less than $90,000 Part B billing OR provide care for less than 200 Part B enrolled beneficiaries. We do not support raising the low-volume threshold, and recommend maintaining the current policy of excluding clinicians or groups who bill less than $30,000 to Part B or care for less than 100 Part B enrolled beneficiaries.

In the transition year final rule, CMS estimated that about 32.5 percent of providers would be exempt from MIPS because they do not meet the low-volume threshold, but the number of providers actually exempted for 2017 was higher than anticipated. The increased low-volume threshold creates an arbitrary cut-off for performance in the MIPS program without first assessing the impact of the current low-volume threshold on Part B providers. CMS should continue to transition a greater percentage of total Medicare spend away from fee-for-service to payment arrangements that account for quality, cost, and patient outcomes, rather than further reducing the number of providers eligible to participate.

Further, the modified threshold would mean that some clinicians who were eligible to participate in 2017 will be excluded from MIPS in 2018. We recommend that CMS extend the option for clinicians to voluntary participate in MIPS reporting in 2018 for a performance score and performance-based payment adjustment.  Clinicians who made investments and preparations to participate in MIPS during the transition year should not lose out on the opportunity to earn a positive payment adjustment in 2018.

QPP Measurement AAPM Determination

Resource Use Category

Aledade supports a transition to value-based payments that hold providers accountable for patient experience, quality of care, and total cost. By statute, in the QPP’s third performance year, the cost performance category must be weighted at 30 percent and the MIPS performance benchmark must be set at either the mean or the median score of all MIPS participants. Introducing cost performance into the MIPS score should be done incrementally, rather than creating a steep cliff from 0 percent weight in PY2 to 30 percent in PY3. Therefore, Aledade does not support reweighting the cost performance category to 0 percent of the final score, and recommends this category be weighted to at least 10 percent of the final score.

Measuring cost is an integral part of measuring value because clinicians play an important role in managing care so as to avoid unnecessary services. We appreciate the ongoing CMS efforts to better align the episode cost measures across programs and to better attribute beneficiaries to specialists for purposes of QPP. However, the lack of finality in these efforts should not slow the inclusion of total cost of care in QPP for 2018.

 

Aligning the AAPM 5 Percent Incentive with Action

Currently, a physician chooses to join an AAPM in the summer of 2017 (CMS’s 2018 deadline for the Medicare Shared Savings Program was July 31st), they participate during 2018, they receive their performance in the AAPM in August of 2019 and then they receive their lump sum bonus for participation in the AAPM in May of 2020. Almost three years have passed between a physician’s decision to join an AAPM and the reward for that decision.

When we talk to physicians about AAPM participation they naturally assume that since the 5 percent is contingent only on participation that they will receive the bonus in not May of 2020, but May of 2018 or even sooner. More than one physician has naturally assumed that the bonus would come January 1, 2018. Every minute explaining why this isn’t the case is a minute spent decreasing the likelihood of AAPM participation, the very thing Congress funded the 5 percent bonus to incentivize. While we understand that not all AAPM models require full year participation and therefore within-year bonuses may not be possible, CMS should explore every proxy to bring action and incentive as close together as possible. At a minimum, CMS should use the same year for the QP determination period and the claims period to pay out the bonus the year following participation. So in 2018 participation in AAPM would pay the 5 percent bonus in May 2019 based on the 2018 claims instead of May 2020 based on 2019 claims. To have the bonus for mere participation come seven months after the savings for actual performance in the AAPM strikes physicians as so backwards that it calls into question the credibility of the AAPM itself and negates the positive effects of the 5 percent bonus.

 

All-Payer AAPM Determinations

As members of the Healthcare Transformation Taskforce (www.hcttf.org), we worked closely with other health care providers, health plans, patient groups and health care payers to make recommendations on this area and we would refer you to those comments for the details.

In our comment letter, we want to emphasize the importance the health care providers place on the simplicity of this process. We do not desire to impose a high administrative burden on either health plans or on CMS in order to make the all-payer AAPM determinations. In this case, we would recommend that CMS value simplicity over every other characteristic of this program.

 

 

 

 

 

[1] http://www.nejm.org/doi/full/10.1056/NEJMsa1600142#t=article

[2] https://www.brookings.edu/research/making-health-care-markets-work-competition-policy-for-health-care/

[3] http://www.ajmc.com/contributor/travis-broome/2016/03/changing-stop-loss-formula-can-drive-interest-in-risk-based-models

[4] http://healthaffairs.org/blog/2017/07/06/spurring-provider-entry-into-medicare-advantage/

There has been no shortage of health policy news out of Washington in the past few weeks. Which means that one major announcement nearly slipped under the radar, but since this was the most relevant to Medicare, here’s our analysis.

Last week, CMS released a 1,058 page proposed rule to update the Quality Payment Program for 2018. The Quality Payment Program is the implementation of the Medicare and CHIP Reauthorization Act, passed in 2015 – one of the key pieces of legislation in the movement to a value-based health care system. We’ve talked about MACRA and CMS’s proposals to implement it before, so feel free to revisit our feedback on the Aledade blog.

Our key takeaway is that the rule is a win for small and independent primary care practices. That starts right near the beginning (page 9 to be exact), when CMS lays out the aims of the Quality Payment Program.

As the rule says:

“The Quality Payment Program aims to:

  1. Support care improvement by focusing on better outcomes for patients, decreased clinician burden, and preservation of independent clinical practice;
  2. Promote adoption of APMs that align incentives for high-quality, low-cost care across healthcare stakeholders; and
  3. Advance existing delivery system reform efforts, including ensuring a smooth transition to a healthcare system that promotes high-value, efficient care through unification of CMS legacy programs.”
    (emphasis ours)

“Preservation of independent clinical practice.” That new phrase guides not only this proposed rule, but should guide future program decisions as well. When CMS is looking at the best way to transition to value, they are committing to a key consideration of independent clinical practice.

Here’s how CMS puts that commitment into action in this rule: The rule sets up guidelines for virtual groups, allowing small practices to band together while keeping their independence. It preserves the excellent work CMS already did on the interaction between ACOs and MIPS, and adds some relief for small practices who are not yet ready for virtual groups or ACOs.

Let’s walk through some of the changes that are proposed:

  • The creation of a virtual group option for practices
  • Another year-long delay before cost performance becomes part of the MIPS score
  • Bonus points in the MIPS score for small practices (small defined as 15 clinicians or less)
  • Another year-long delay in the requirement to use 2015-edition certified EHRs
  • A significant increase in the low volume threshold to exclude clinicians from MIPS

The Stepping Stone of Virtual Groups

Virtual groups are a completely new option for physicians in 2018. The move to value-based care isn’t immediate. Not every practice can immediately leap into an ACO that puts them on the hook for any higher costs, especially if they want to stay independent. Some need a longer runway, and virtual groups create that option.

Here’s the proposed criteria for virtual groups:

  • A virtual group will be a combination of a solo practitioners or practices (defined as a single TIN) with 10 or fewer eligible clinicians who band together for at least one-year performance period. As of now, there are no geographic, size or specialty limitations on the groups (though CMS is open to comments on this).
  • The group’s participants need to send a written agreement to CMS by December 1, before their performance period starts.
  • At least one member of each participating practice needs to be eligible for MIPS, and the entire group will be assessed as a group on every MIPS category.
  • As the formation requirements are relatively light, these groups will be much easier to form and operate than a typical ACO with fewer responsibilities.

The purpose of creating virtual groups is to create a better path to valued based care. We believe it is worth taking a moment to review the current pathway, compared to the proposed pathway.

Here’s how the runway currently looks as providers move from the old fee-for-service system to two-sided risk:

MACRA Blog 1 pt2

 

In there are at least two major hurdles, especially for small, independent practices. First, the initial step out of fee-for-service and into one-sided risk. Practices want to band together in high-value networks, especially if there’s a chance to share in savings. But many practices don’t want to sacrifice their independence for a hierarchical ownership structure. That’s why we called for CMS to create “virtual groups” last year.

Second, the jump from one-sided risk to two-sided risk can be devastating to practice revenue. If a small, independent practice faces headwinds in one year, losses based on the total cost of care could be devastating. This is why the rule contains practice-revenue based risk. CMS created Track 1+ ACOs to take advantage of this revenue-based risk and they should roll that principle out to all two-sided risk ACOs.

Here’s what the proposed path looks like:

MACRA Blog 2

We’ll dive into this pathway more in a future post. Virtual groups are a key component to making the hardest transition between fee for service and accountability for total cost of care.

Delaying the Cost Factor in MIPS

CMS is proposing to delay the cost category in MIPS for another year. In the vacuum of a single year, this is no big deal. However, MACRA requires a certain transition to the cost category. So every year the transition is delayed, the cliff gets steeper. Right now, CMS is proposing to go from 0 percent cost in 2018 to 30 percent cost in 2019, trying to catch up to the law. There are consequences to kicking the can down the road.

Bonus Points for Small Practices

CMS is proposing 5 bonus points to the total MIPS score for small practices. Small practices are individual practices (defined by Tax Payer ID or TIN) with 15 or fewer physicians, nurse practitioners, physician assistants and other MIPS-eligible clinicians in the practice. The minimum threshold is 15 points, to ensure a practice is not penalized for 2020 based on 2018 performance. So these 5 points immediately get a small practices a third of the way there. This means that a small practice can avoid a negative adjustment in 2020 simply by reporting on at least two quality measures.

Delaying the Required Use of 2015 Edition Certified EHR Technology

Practices will be able to report on the advancing care information category with either 2014 or 2015 edition EHRs. While there are very important improvements to EHRs in the 2015 edition, we have seen firsthand the delays in rolling out 2015 edition EHRs to practices. CMS is proposing that rather than penalizing practices who don’t use the 2015 Edition, they would award 10 bonus points if practices do. As only 100 points are needed for full credit in the ACI category, this is a significant bonus. 

Increasing the Low-Volume Threshold – How Much is Too Much?

In this new proposed rule, CMS suggests they might raise that threshold even higher – from an initially proposed combination of $10,000 in Medicare revenue and less than 100 patients to this year’s proposal of either $90,000 of Medicare revenue or 200 patients. That means nearly half of all physicians could be exempt from this requirement. In other words, more than one out of every ten dollars spent by Medicare Part B. By significantly increasing the low-volume threshold, CMS risks slowing the transition to value-based care and, worse, create a two-tiered system of physicians moving forward opposed to those who are exempt and doing what they can to stay that way.

We believe that American health care needs to avoid a bifurcated or two-tiered system – one in which some providers are paid for improving quality and outcomes, and other providers stay in the old fee-for-service model with different incentives.

This proposed rule estimates that 70 percent of Medicare Part B dollars will flow either through MIPS or Advanced Alternative Payment Models.

That number can never go down.

Every patient deserves to be in a system of better care and lower costs, and every provider deserves to be rewarded for high value care. Instead of kicking the can down the road on cost and exempting more physicians, CMS should concentrate on making the program itself better. They make good strides in that endeavor with this proposed rule.

We will be working closely with our physicians and with other stakeholders to submit complete comments on the regulation in the weeks to come. We look forward to working with CMS on its commitment to move to value, and its clear commitment to preserve independent clinical practice.

President Trump’s administration has made it clear that they plan to greatly alter, if not repeal, the Affordable Care Act. To both sides of the political isle it may come as a surprise that altering the Affordable Care Act will likely have little impact on a core outcome of health reform: the fact that private insurance companies increasingly pay primary care providers for improved health outcomes. Since the presidential election, we have met with a dozen payers in both red and blue states: Arkansas, Florida, Louisiana, Mississippi, Missouri, New Jersey, Pennsylvania, Utah, and West Virginia. Not one payer has mentioned that they plan to stop their efforts, or pull back resources dedicated to moving physicians away from the fee-for-service paradigm and towards paying for outcomes. In fact, every payer we meet is intent to continue to innovate by paying providers in a manner that lowers cost and improves health.

A key piece of the Affordable Care Act created the Medicare Shared Savings Program, and private payers quickly followed with their own efforts to move physicians to shared savings contracts. Years later, private payers continue to dedicate significant resources to move providers away from fee for service and towards value payments. And payers have committed to move all of their providers, across all business lines (commercial, Medicare Advantage, and Managed Medicaid), to value. This investment has been significant. For example, Cigna established CareAllies, a service company that works with provider organizations of all types to focus on improved patient outcomes and better health care quality and affordability. Similarly, UnitedHealthcare (via Optum) has gone further and purchased providers in order to create high value networks and their own Accountable Care Organizations. Humana has a well-established value path (the Accountable Care Continuum) that moves its Medicare Advantage providers away from fee for service on a path towards global capitation. Each of these national payers have undertaken vast strategic efforts that require significant resources for staff and infrastructure, and a change in culture.

Commercial payers believe, and have the data to demonstrate, that paying for value lowers their cost and improves the health of their members. For example, UnitedHealthcare has noted up to 6 percent lower medical costs across a range of value-based care programs, and overall, commercial ACOs have lower expenses per Medicare enrollee and slightly higher quality-of-care scores.

Despite the threat of repealing parts or all of the Affordable Care Act, our payer partners continue to move ahead with their payment reform efforts. The political battle over Obamacare has had no impact on payers’ dedication to reform provider payments; the future of primary care provider payment remains value-based. Though there is still much unknown about the potential repeal and replacement of the Affordable Care Act, the future of physician payment reform is clear.

December 20, 2016

Andy Slavitt, Acting Administrator
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Re: CMS-5517-FC: Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models (81 Fed.Reg. 77008 (Nov. 4, 2016))

Dear Administrator Slavitt,

Aledade partners with over 200 primary care physician practices, FQHCs and RHCs in value-based health care. The physicians are across 15 states and are accountable for over 170,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than ten clinicians. As an organization that is dedicated solely to helping independent physicians lead the transition from volume to value, we have a particular set of experiences and perspectives that are highly relevant to the key policy issues faced by CMS in implementing the MACRA legislation.

As described in more detail in our comment letter, a few critical improvements to the final MACRA regulation could improve the uptake of accountable care.
1. Creating a new MSSP model that takes advantage of the breakthroughs in the MACRA regulations regarding risk and matches that risk with proper rewards
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. Simplifying provisions related to other payer APMs and Certified EHR Technology
Thank you very much for your consideration as we move together through this exciting time in health care. Please feel free to follow up with me or Travis Broome (travis@aledade.com) if you or your staff have questions or would like to explore these positions further.

Sincerely,
/s/
Farzad Mostashari, MD
CEO and Co-Founder, Aledade, Inc.

Advanced APM Revenue-Based Nominal Amount Standard

CMS seeks comment for future consideration on the amount and structure of the revenue-based nominal amount standard for QP Performance Periods in 2019 and later. This includes: (1) setting the revenue-based standard for 2019 and later at up to 15 percent of revenue; or (2) setting the revenue-based standard at 10 percent so long as risk is at least equal to 1.5 percent of expected expenditures for which an APM Entity is responsible under an APM.

In our comments on the MACRA proposed rule we supported a 15 percent of revenue standard out of the gate to simplify the requirements. We continue to believe that 15 percent represents more risk than any other path under MACRA and more than satisfies the Congressional standard of more than nominal risk. In response to CMS’s request for comment, we want to highlight the critical nature of maintaining both a revenue based standard and a percentage of model benchmark standard. Using a percentage of model benchmark standard creates vastly different amounts of risk depending on the organization and depending on the APM model. How risky something is to an organization is dependent on the level of risk relative to their financial situation. This variation creates a situation where CMS will not be able to gauge the amount of financial risk any APM entity is actually taking on. What could be disastrously risky for one organization could be less than nominal for another organization.

Reintroducing a model benchmark standard to the revenue standard reintroduces all that was wrong with the standard in the first place, namely that the financial risk would in no way be related to the financial standing of the organization. If Congress had not asked CMS to measure financial risk this would not be a concern; however, Congress clearly wanted the APM entity to take on more than nominal financial risk. This means financial risk should be measured and it should be measured in relation to the APM entity not the AAPM. For these reasons CMS should maintain a pure revenue-based standard that stays well ahead of the risk in MIPS and finalize in the future a 15 percent of revenue standard.

CMS furthers asks for comment on cases where the APM Entity is one component of a larger health care provider organization and using the larger organization as the basis for a revenue-based nominal amount standard. To minimize the revenue based standard, a health care organization could limit the composition of its APM entity to only those health care providers who drive attribution in the model. We do not believe it is necessary for CMS to consider this in determining the revenue-based nominal amount for several reasons. First, by limiting the participants in the AAPM the health care provider organization would lose all the benefits of having those health care providers in the AAPM and that in and of itself has cost. Second, not all models use the same attribution methodologies and certainly do not have the same economics so what might seem wise in one model to include the larger health care organization may not make sense in another model and could inadvertently drive large health care organizations out of some models. Finally, by including the alternative pure percentage of benchmark standard for nominal financial risk CMS already has an alternative for larger health care organizations for whom the benchmark standard may only represent 15% of revenue or less for larger health care organizations. By having both a pure revenue standard and a pure percentage of benchmark standard, CMS ensures that all APM entities are taking on more than nominal financial risk while still allowing flexibility to account for the incredible diversity that is some larger health care organizations.

ACO Track 1+ Model
The most obvious work left undone by MACRA is having an ACO that matches the risk standards finalized in MACRA. We believe it is imperative that CMS implement an ACO model that does so as quickly as possible. We field questions everyday as to whether our ACOs will move to two-sided risk. Every day that goes by where we have to say we do not know is a lost opportunity. We continue to believe that the most straightforward way to implement just the new risk standards would be through the MSSP itself.

This risk can be easily integrated as a stop loss scenario into Track 2 and Track 3 with the addition of one line of regulation text each for Track 2 and Track 3 MSSP ACOs. Changes are in bold with higher risk for Track 3 due to its higher reward.

For Track 2: 42 CFR 425.606 (g)
(3) 3 percent in the third and any subsequent performance year, or
(4) 8 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year 2017 and 2018.

For Track 3: 42 CFR 425.610
(g) Loss recoupment limit. The amount of shared losses for which an eligible ACO is liable may not exceed 15 percent of its updated benchmark as determined under § 425.602 or 15 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year.

However, we understand that CMS is on the path to implement it as an innovation model. This means there is at a minimum additional one additional piece of work to be accomplished. CMS must outline the reward that ACOs receive for taking on risk. While CMS may be tempted to see the 5% fee-schedule bonus as sufficient, we assure you it is not. First, many ACOs include participants who do not receive Part B payments in a significant way such as FQHCs, RHCs and hospitals. Secondly, most physicians (rightly or wrongly) believe they can achieve 5% in MIPS. Combining these two factors essentially negates the value of the 5% bonus for taking on risk. Finally, even in the rare scenario where all ACO participants only receive Part B payments the risk is still mathematically higher than the reward. The combination of these factors means it is imperative that the model itself offer reward for taking on risk. We recommend that CMS include in the model the potential for 60 percent shared savings for 8% of revenue risk and 75 percent shared savings for 15% of revenue risk.

As CMS is developing a new model we believe CMS can take this opportunity to focus on more than the risk reward tradeoff. The model can test other ways to bring the ACO model closer to measuring whether a person in the ACO get better care at lower cost than if the person had not in the ACO or a “difference in difference” approach.

We recommend CMS address two additional areas that are crucial towards moving physicians towards taking risk. First, CMS should change how it views risk adjustment. Rather than the current view of fear that it will lead to paying for coding, CMS should focus on the true purpose of risk adjustment which is make different populations comparable to one another. We have advocated, along with many others, for the last two years that to measure real ACO value risk scoring must accurately reflect the measured population. The artificial cap imposed by CMS on risk scoring turns ACOs into mini-insurance companies. This in turn scares ACOs away from two-sided risk because they are no longer responsible for just population health, but also statistical anomalies. This is the only area where CMS is not leading the accountable care movement, but falling behind commercial health plans.

The second important step CMS can take to measuring ACO value is to include regional inflation update factors instead of national inflation update factors in all contract years. CMS should seek to reward ACOs for the work they do in creating difference in difference ACO value not because they happen to be in a low cost or high cost area in any given year. CMS’s own analysis for their last regulations on the MSSP shows that very few ACOs can individually impact their area’s cost curve. Every ACO can impact whether the person got better care in the ACO than they did out of it. A regional inflation update ensures that the work of the ACO impacts the ACO’s financial future instead of regional cost arbitrage. ACOs have begun to calculate headwinds and tailwinds (i.e. is the benchmark lower or higher than the most recent year’s costs) to determine their likelihood of success. This is what CMS intended to reward areas with falling costs with more ACO participation. However, this intent has gone awry. First, rarely does any individual ACO have significant impact on their regional costs so the reward or penalty is not due to the past work of the ACO participants. Second, ACOs have not been able to determine these headwinds or tailwinds prior to receiving ACO data from CMS so the phenomenon cannot drive increases or decreases in ACO participation. Given that the hoped for effects of this policy have not materialized it is time to revert to the more accurate measurement of regional inflation in benchmarking and annual update factors in the first contract and end the unnatural arbitrage opportunities national inflation updates are causing across the MSSP.

Other Payer Advanced APM Financial Risk Criteria
We strongly believe that CMS should use the exact same criteria for qualifying other payer APMs as advanced as those used for Medicare. Both payers and health care providers should be able to submit the parameters of their program for qualification as an AAPM. CMS should be as open as possible in disclosing the specific qualifying terms of the other payer APMs, but should offer enough proprietary protection so that a health care provider is able to submit the parameters on their own.

Definition of Certified EHR Technology
We believe that CMS should not attempt to create different versions of meaningful use (now referred to as Advancing Care Information) through the AAPM requirements. CMS should, as they finalized in this regulation, define use simply as use of Certified EHR Technology in the AAPM. Different AAPMs will have different health information technology needs. They will all have a need to keep medical records and to make those records available to patients, care givers and other health care providers which is why we support the requirement that the EHR Technology be certified, but specific uses, measurement of those uses and the effects on the financials of the AAPM should be allowed to vary significantly from AAPM to AAPM.

Virtual Groups
Not all MIPS eligible clinicians are ready to participate in an APM. By laying out the framework for the virtual groups, CMS can make it a viable alternative for physicians in 2018. By serving as an alternative to consolidation, virtual groups can stem the revenue shift from small to large practices projected in the impact statement which in turn stems consolidation and preserves competition. We put forward a potential outline of virtual group as part of our comments.

How a virtual group is formed:

  • Voluntary election by physicians to be in a virtual group prior to the start of the performance year
  • Agree to work together to improve quality and other elected components of MIPS
  • Must agree to be scored on quality component
  • Can elect to be scored on
  • Clinical Practice Improvement Activities
  • Advancing Care Information
  • Resource Use
  • Can utilize any reporting method including Group Practice Reporting Option (GPRO)
  • Identify to CMS the officer responsible for the virtual group’s reporting

CMS already has several online systems for physician interaction regarding quality such as Quality Net, EIDM and HPMS. Any one of this could be adapted to record the grouping of the Taxpayer Identification Numbers that represent practices and to collect the election of which components of MIPS to be scored on.

Governance of the Virtual Group:

  • Establish a board with beneficiary representation to govern the virtual group
  • Empower an officer to take responsibility for the virtual group’s reporting
  • Establish a compliance officer
  • Conduct at least quarterly group reviews of their work toward improved quality

Responsibility of the Virtual Group:

  • The physicians and other eligible professionals agree to be scored as a group for purposes of MIPS
  • The virtual group is responsible for ensuring group reporting (i.e. CMS should not be responsible for aggregating the data across practices except in the area of resource use and other claims based measures)
  • The virtual group should have the capability to generate practice level information within the group (CMS will provide scoring at the virtual group level)

Limitations of the Virtual Group:

  • The sole purpose of the virtual group is to comply with MIPS reporting and it does not infer other advantages to the practices in regards to waivers or other exceptions
  • Virtual groups seeking additional group activities should seek to become an existing, more advanced group such as a clinically integrated network and/or an accountable care organization
  • Practices commit to a minimum of one year to being scored under MIPS as part of the virtual group

Last Friday, the Centers for Medicare & Medicaid Services (CMS) released the highly anticipated final regulations implementing the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA creates two value driven ways of interacting with CMS: Advanced Alternative Payment Models (AAPMs) and the Merit-Based Incentive Payment System (MIPS). Here is what you need to know about each. CMS listened to and responded to a vast array of comments from health care stakeholders. I believe the rule will move the country to where doctors are reimbursed for quality and value not volume. In creating a clear path for small, independent physicians to embrace the transition to value, CMS makes it possible for leading independent practices to reduce costs, boost outcomes, and thrive.

Advanced Alternative Payment Models: What You Need to Know

Most commonly taking the form of accountable care organizations and bundled payment initiatives, the defining characteristic that make an alternate payment model “advanced” is risk. Risk is usually simply defined as poor performance means I will have to write CMS a check. The critical question was how big does the check have to be to qualify. CMS originally proposed that the check had to be a percentage of the denominator in the model so in an ACO a percentage of total cost of care or in bundles a percentage of the total bundle price. Yet as we detailed in blog posts (here, here and here) as well as in our formal comments to the proposed rule this would have disadvantages smaller, physician-led groups that represent only a small percentage of the total cost of care.

Therefore, we are very pleased to see CMS simplify how they measure the amount of risk and relate it to the financial resources of those participating in the APM entity. CMS recognizes that not all APM entities have the same financial resources so it is impossible to use the same standard for all and claim that the risk is merely more than nominal for all of them.

CMS finalized for 2017 and 2018 that risk representing 8 percent of the Medicare Part A and Part B revenue received by participants of the ACO or other APM would qualify the APM as advanced. CMS also indicated that this could ramp up over time to as much as 15 percent in later years. This would ensure that participation in an AAPM always entails more risk than participation in MIPS, a goal we support.

Advanced Alternative Payment Models: What to Watch For

This is just the first step. Today no two-sided risk APM takes advantage of this motivational level of risk. CMS indicates in it regulation that updates to existing APMs are coming very quickly. In particular CMS talks about a MSSP Track 1+ that would take advantage of this lower risk track in time for physicians to be in it for 2018 which would affect their payments in 2020. We look forward to seeing CMS move quickly to catch their various models up to this final rule.

While not an issue for most ACO participants, physicians should be aware that they must have at least 25% of their Medicare Part B services or at least 20% of their Medicare Part B patients attributed to the APM to individually qualify for the 5% bonus payment. Nearly every primary care physician in an ACO model will easily push past these thresholds, but specialists and physicians in other models should be wary of this provision especially as it ramps up to 50% and 35% respectively in 2021 (reporting year 2019) and all the way to 75 and 50% in 2023 (reporting year 2021).

Medicare Incentive Payment System: Need to Know

CMS recognized that with 2017 starting in just two and a half months and calls 2017 what it was always going to be: a transition year. To successfully navigate the transition year there are two number to know: 3 and 70. 3 is how many points you need in 2017 to avoid any penalty in 2019. 70 is how many points you need to gain access to the $500 million exceptional performance bonus pool that Congress created.

MIPS is divided into four categories that total up to 100 possible points.

2017 Breakdown of Points by Category

Category

MIPS only Points

MIPS with ACO Points

Quality

60

50

Improvement Activities

15

20

Advancing Care Information

25

30

Cost

0

0

 

2018 Breakdown of Points by Category

Category

MIPS only Points

MIPS with ACO Points

Quality

50

50

Improvement Activities

15

20

Advancing Care Information

25

30

Cost

10

0

 

To get the 3 points you need only successfully report one measure for one category. This prevents any 2019 negative payment adjustments. A low bar to be sure, but you must interact with CMS in 2017 at least this much or you will receive a negative 4% adjustment in 2019.

Because CMS expects most physicians to at least report one measure, there will not be a lot of positive payment adjustments available under budget neutrality rule. This means most of the positive potential in MIPS is tied to the exceptional performance bonus pool. To access this pool, you must report at least 90 days preferably the whole year and earn at least 70 points. While it appears possible to get there while ignoring one of the categories other than quality this is not advisable. Each category has some built in low hanging fruit (for example you get 50% of the points in Advancing Care Information just for having 5 specific EHR capabilities) that should not be missed. Every organization should look into the three scored categories and plot their best way to get to at least seventy points.

To start you on that path, improvement activities is the easiest category and as mentioned you get 50% of the points in ACI just for fully implementation of your EHR. That is 22.5 points right there in MIPS only and 35 points in MIPS with ACO, certainly a solid base to start from. If you have done PQRS before, if you have done meaningful use before and certainly if you are in an ACO or other “non-advanced” APM then look into how you can be in that exceptional performance pool right away. If those things are new to you then take full advantage of 2017 as a transition year.

Medicare Incentive Payment System: What to Watch For

There are a lot of reporting submission options. Claims, registry, EHR, CMS web interface, CMS wants your data and they will take it however they can get it. If you are in an ACO your ACO quality reporting does double duty. If you aren’t in an ACO or ACO won’t be in its performance year in 2017 then you have to choose which option to use. The first consideration is what options are available to you. Is there a registry for your specialty, are you on an EHR those type of capability question. If you are capable of more than one, the second thing to keep in mind that each has its own benchmarks. So the benchmarks for CMS web interface are the same as the benchmarks used for the Medicare Shared Savings Program whether you are in an ACO or not. The benchmarks for EHR submission are based on past performance of those who submitted through EHR, etc. Benchmarks for most measures are published in advance and could influence your choice of submission method.

Bottom Line:

AAPM – Excellent news on right sized risk, but models that use it will come out in 2017

MIPS –   Must minimally interact with MIPS in 2017 to avoid penalty and if you are ready the bonus pool is within reach.

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.

These are unedited comments on proposed Federal regulation. They aren’t short and they aren’t ACO 101. 

 

Dear Administrator Slavitt,

Aledade partners with 159 primary care physician practices, FQHCs and RHCs in value-based health care. Organized into eight accountable care organizations across 14 states these primary care physicians are accountable for over 130,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than ten clinicians. As an organization that is dedicated solely to helping independent physicians lead the transition from volume to value, we have a particular set of experiences and perspectives that are highly relevant to the key policy issues faced by CMS in implementing the MACRA legislation.

  • Independent and small practices are not only capable of taking accountability for the total cost of care, but –unburdened by concerns of “demand destruction”-they may be uniquely positioned to do so[1]. A focus on outcomes moves practices beyond mere compliance with quality measure reporting, health IT use, or medical home processes. Creating a viable pathway for them to participate in Advanced Alternative Payment Models (AAPMs) must be prioritized.
  • Independent and small practices are feeling intense pressure from multiple fronts, which is contributing to the continued consolidation of local provider markets. A lack of healthy competition in local markets results in higher societal costs with no apparent improvement in patient care. Creating a viable pathway for these practices to stand on “equal footing” with larger and more integrated groups is a key policy priority.

As described in more detail in our comment letter, a few critical changes to the proposed MACRA regulation could dramatically improve the attainment of these policy objectives.

  1. Defining “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.

Thank you very much for your consideration as we move together through this exciting time in health care. Please feel free to follow up with me or Travis Broome (travis@aledade.com) if you or your staff have questions or would like to explore these positions further

 

Summary

Advanced Alternative Payment Models

Financial Risk

Before defining financial risk, the purpose of financial risk must be established. As most alternative payment models (APMs) are voluntary, CMS should not expect that any organization will continue to participate over multiple years of losses. Medicare will benefit from APMs primarily from sharing in positive value created by health care providers. The non-financial effect of risk is to be a motivating factor making positive value creation more likely and of greater magnitude. CMS should evaluate the definition of financial risk through the lens of whether it motivates APM participants more than having no financial risk.

More than Nominal Financial Risk

Congress highlighted the use of risk-based models for motivation with the phrase “more than nominal financial risk.” The risk needs to motivate, it needs to be enough to matter, it needs to be more than very small in amount, but more than nominal clearly does not translate into financial ruin. The lack of participation in downside risk in APMs to date is a clear signal about how serious entities consider downside risk and the effect it would have on organizations that take on downside risk. However, just as the lack of participation is a signal of its effectiveness it should also be a signal to CMS of the need to strike the right balance in using MACRA to create a better model of two-sided risk.

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 and clearly does not meet the Congressional intent of the “more than nominal” provision. Using the benchmark creates vastly different amounts of risk depending on the organization and depending on the APM model. How risky something is to an organization is dependent on the level of risk relative to their financial situation. This variation creates a situation where CMS will not be able to gauge the amount of financial risk any APM entity is actually taking on. What could be disastrously risky for one organization could be less than nominal for another organization. Rather than trying to collect information about each organization in order to be able to minutely evaluate the level of risk, CMS should utilize a key factor it already knows about each organization: how much revenue the organization and/or its members received from Medicare. CMS proposed this approach for Medical Home Models and it makes sense for all APM entities. We propose

  • 15 percent of the APM Entity’s participants aggregate Medicare Parts A and B revenue

Not only is this far more significant than the threshold under the Medical Home Model Standard, it also represents considerably more revenue than is at risk under MIPS even in the later years of MIPS. Yet at the same time it a level of risk that every organization of any size can contemplate undertaking without risking their entire business to a single, abnormal year.

MIPS

We support CMS’s proposal to use APM quality reporting for the quality aspect of MIPS for the Medicare Shared Savings Program (MSSP). The same logic behind this proposal also supports ACO level reporting in clinical practice improvement activities (CPIA) and advancing care information (ACI) as well. This not only simplifies administration for both the ACO and CMS it represents a better measure in all three areas than the mere summation of practice level performance. As other APMs increase the robustness of their quality reporting requirements we encourage CMS to consider APM level reporting beyond the MSSP.

Quality

In addition to our support for ACO-level reporting, we encourage CMS to measure like sized practices to like sized practices. There are two components to measuring quality. The quality of the care itself and the collection and reporting of the data. The administrative burden of collecting and reporting creates a situation where much larger practices with much greater administrative abilities score higher and therefore potentially earn bonuses disproportionate to their quality. This hurts the small businesses that are small practices and encourages consolidation.

Clinical Practice Improvement Activities

We propose the CMS should go beyond the minimum required by the statute and grant full credit to eligible clinicians who are participating in an APM. Participation in an APM moves eligible clinicians beyond just process measures of CPIA and focuses them on the outcomes of those processes.

Advancing Care Information

In addition to our support for ACO-level reporting, we encourage CMS to consider the effects of APM participation on ACI beyond the use of certified EHR technology. Specifically, we propose a 20-point bonus structure for integrating clinical and claims data into a population health tool and for timely notification of transitions of care. Using a bonus point structure allows CMS to reward advanced use of health information technology without penalizing eligible clinicians within or without an APM for not yet having access to these cutting edge integrations.

Resource Use

After much consideration, we support the exclusion of resource use from MIPS for APMs. However, we carefully considered and urge CMS to carefully consider the argument that the different comparison made for costs in MIPS versus the APM means the concept of “double dipping” is not as clear cut as it may appear.

AAPM: Use of Certified EHR Technology

We support the proposed definition of Certified EHR Technology and the requirement for a percent of eligible clinicians to be using CEHRT in order to be an AAPM. We do have some concerns about the discussion CMS included in the proposed rule that seem to indicate that CMS is contemplating creating significant additional requirements to define use. Congress specifically referenced meaningful use for MIPS and just use for AAPM. We believe that distinction is good policy that accounts for the differences between the goals of MIPS and AAPMs.

We believe that CMS should not attempt to create different version of meaningful use (now referred to as Advancing Care Information) through the AAPM requirements. CMS should, as they proposed in this regulation, define use simply as use of Certified EHR Technology in the AAPM. Different AAPMs will have different health information technology needs. They will all have a need to keep medical records and to make those records available to patients, care givers and other health care providers which is why we support the requirement that the EHR Technology be certified, but specific uses, measurement of those uses and the effects on the financials of the AAPM should be allowed to vary significantly from AAPM to AAPM.

In addition, many eligible clinicians working in facility settings would potentially be in an AAPM. CMS should make it clear that CEHRT certified to either inpatient or ambulatory standards qualifies for use in an AAPM.

AAPM: Quality

We support the principles proposed by CMS while leaving the measure selection itself up to the AAPM. Principle 5 of other quality measures as determined by CMS is a needed provision to allow flexibility in measure inclusion in AAPM, but we urge CMS to always have the goal of any measure included by principle 5 to qualify under one of the other principles as soon as possible. We recommend that CMS express its intent to have no measure qualify for more than 2 years based solely on principle 5.

We also encourage CMS to continually look at measures that monitor for any perverse incentives that may occur as CMS experiments with AAPMs. For example, stinting or the forgoing of care to save costs in the short term is a risk not usually prevalent in fee for service, but could be a risk in certain AAPMs. In developing all APMs, CMS should always ensure that they contain a quality component that meets the proposed criteria and that the measures in the APM reflect monitoring for the desired outcomes of the model. While Congress outlined this as a requirement for Advanced APMs, we see no reason why all APMs developed by CMS should not be designed to meet this criterion.

AAPM: Defining Financial Risk

There are two primary sources of risk for an APM entity. The first is the investment that the APM entity and/or its participants are making in work that will only generate financial returns if the APM entity is successful in their APM. The second is the risk that due to failure in the APM the APM entity and/or its participants will owe money or otherwise receive less money for the same services than they would have had they not participated in the APM. The second risk would always be layered on top of the first risk. While to the accountant these risks might be the same, we believe they influence behavior differently. The experience of MSSP and our own experiences demonstrate that APM entities are more likely to undertake the investment risk while extremely unlikely to undertake the levels of contract risk that currently exist in MSSP.

This is primarily because that while the investment made be at complete financial risk, there are always perceived ancillary benefits such as increased quality and being the right thing to do for patients. Contract risk is not seen as having any ancillary benefit so is viewed in pure financial terms i.e. the APM entity gets x more revenue if they take on y risk. This would indicate that taking on contract risk will create additional motivation due to the lack of ancillary benefits and the lack of sunk cost effects. All three of CMS proposed definitions are likely to be additionally motivating over just investment risk.

The fourth definition of financial risk used for Medical Home Models by CMS (today the Comprehensive Primary Care Plus) is not obviously additionally motivating over investment risk. We are concerned that the only revenue that is at risk is revenue not available outside of the APM. We encourage CMS to continue to evaluate the inclusion of the fourth definition to ensure that it truly serves as an additional motivating factor beyond investment risk.

AAPM: What is More than Nominal?

Working with primary care physicians across the county, we have found that they view losses as mostly beyond their control and savings as within their control. Because of this they focus on the work case scenario when considering risk. Almost in anticipation of this very situation, Congress set financial risk as more than nominal or more than very small in amount. This aligns completely with the physician perspective of worrying about the worst case scenario and will my practice, the source of my livelihood and the livelihoods of my staff, survive if it happens? However, CMS’s proposal does not align with this perspective or what we believe Congressional intent is. This is due to the extreme variability in the amount of financial risk the AAPM nominal amount standard would impose on any given APM entity. Financial risk is best measured as a percentage of revenue so that it is the right amount of risk for each organization.

For these reasons we strongly recommend that CMS add a revenue measure to the AAPM more than nominal amount standard.

While the proposed rule and the MACRA statute use graduated thresholds over time, we recommend that CMS simplify and set a percentage for all years for the Medicare revenue that is greater than the Medical Home Model in any year and greater than the potential financial risk under MIPS which is 9 percent of Medicare Part B revenue. Similarly, the AAPM bonus payment is 5 percent of Medicare Part B revenue. By including Part A and by setting the percentage at 15 percent we believe it is incontrovertible that our proposal represents more risk than any other path under MACRA and more than satisfies the Congressional standard of more than nominal risk.

We strongly recommend that CMS include 15 percent of the APM Entity’s participants aggregate Medicare Parts A and B revenue in the AAPM normal more than nominal amount standard.

We view that as the single most important policy change in MACRA implementation and absolutely crucial to encouraging eligible clinicians to embrace AAPMs.

Below is a table that shows how the addition of the revenue measure would play out if a total cost of care AAPM choose to adopt it as its stop loss in the model. Denominator is the label for CMS’ current proposal as exists in Track 2 Year 2 of MSSP.

Total Cost of Care $100,000,000
Total APM Participants Medicare Revenue Denominator Stop Loss Reached Shared Losses Rate Check to CMS Under Denominator in Stop Loss is Hit Denominator Stop Loss as % of Revenue Check to CMS on 15% Revenue Stop Loss
 $5,000,000 10% 50%  $5,000,000 100.00%  $375,000
 $10,000,000 10% 50%  $5,000,000 50.00%  $750,000
 $25,000,000 10% 50%  $5,000,000 20.00%  $1,875,000
 $50,000,000 10% 50%  $5,000,000 10.00%  $3,750,000
 $100,000,000 10% 50%  $5,000,000 5.00%  $5,000,000
 $200,000,000 10% 50%  $5,000,000 2.50%  $5,000,000

 

As you can see organizations with aggregate revenue greater than the total cost of are still advantaged under this model, but the disadvantage of facing catastrophic losses due to one abnormal year is removed for smaller organizations. We cannot believe that Congress intended for 100% of revenue to be at risk to meet a more than nominal standard. We understand the appeal of the symmetry on the shared losses and shared savings, but that symmetry is not necessary to achieve the motivational benefits of two-sided risk and is not an accurate measure of whether the financial risk being undertaken by APM entity is more than nominal. Maintaining the sole definition of using the benchmark of the AAPM as the denominator in determining financial risk creates an incentive for providers to consolidate to reduce their relative financial risk as clearly shown in the table above. This would decrease competition which is itself a powerful force to increase the value in health care.

AAPM: QP Performance Period

In addition to changing the way risk is measured, we recommend that CMS change the timeline over which it is measured. We believe that the QP performance period can be slightly altered to create additional time for eligible clinicians to join an AAPM and receive the bonus in 2019. The tight implementation timeline outlined in the proposed rule puts everyone at a disadvantage this year in having to decide on model participation before a final regulation comes out. Perhaps more importantly it creates a three-year lag on any new Advanced APM introduction. A new model announced in 2019 with an immediate application period for a start date of Jan 1, 2020 wouldn’t affect payments until 2022.

By moving the date from December 31st of the QP performance period to January 1st the day following the conclusion of the QP performance period, CMS and eligible clinicians gain an entire year. We note that CMS will already know which eligible clinicians have been approved for a start date of January 1st well in advance of January 1st. In most APMs the claims data that is the basis of the benchmark calculations is from the year or years prior so using data from the QP performance period to calculate payment threshold or patient counts is aligned with the importance of that period to success in the APM.

Many of our proposals create downstream effects requiring changes to APMs and changes in other regulations. We included at the end of our comment letter detailed comments on the implementation aspect.

MIPS: Composite Performance Score

We agree that MIPS should score Medicare Shared Savings Program (MSSP) ACO eligible clinicians’ CPIA and ACI performance categories at the ACO level to ensure consistency between performance measures across MSSP and MIPS. We also fully support CMS’s proposal to use the MSSP APMs’ quality reporting through the CMS Web Interface and for the MIPS quality reporting category. MIPS eligible clinicians participating in APMs have already agreed to be accountable for each other and encourage this shared risk and performance to be reflected in MIPS.

However, the logical extension of ACO level scoring in the three categories is to support ACO level reporting across all three categories. We would like to see consistent APM Entity level reporting across all of the performance categories in MIPS. We believe this would ensure the reliability of performance measures between MIPS and MSSP. For example, an ACO may focus patient engagement through the primary care practices funneling information from specialists to patients through the Certified EHR Technology of the primary care physician, measured at the individual clinician level this may create artificially high scores for the primary care practice and artificially low scores for the specialty practice. This is just one of many examples were actions that provide better care in the APM decrease the comparability of individual eligible clinician scores to those scores of individual eligible clinicians not in an APM.

Additionally, APM entity level reporting in CPIA and ACI would reduce administrative burden. CMS currently proposes that “any Shared Savings Program ACO participant billing TIN that does not submit data for the MIPS CPIA and/or advancing care information performance categories would contribute a score of zero for each performance category for which it does not report; and that score would be incorporated into the resulting weighted average score for the Shared Savings Program ACO. All MIPS eligible clinicians in the ACO (the APM Entity group) would receive the same score that is calculated at the ACO level (the APM Entity).” By allowing for APM entity level reporting CMS eliminates the compliance actions APM Entities will undoubtedly take up to ensure this happen. CMS also reduces its own burden by reducing the number of submissions dramatically and by not having to weight the scores themselves. We understand the strains on CMS’s own administrative budget that these programs create and believe this is an obvious area where good policy and lower costs line up.

Overall, we propose that if all MIPS eligible clinicians are held accountable for each other’s CPIA and ACI reporting measures due to being in an APM Entity, then the APM Entity should be able to report the CPIA and ACI reporting measures. This will allow for a more accurate CPS score to be captured for all MIPS eligible clinicians in the APM Entity group; and simplifies administration for both the APM Entity and CMS.

Not all MIPS eligible clinicians are ready to participate in an APM. Congress created another option for these eligible clinicians, virtual groups. We do not deny that CMS faces significant operational challenges in creating virtual groups; however, we do not understand why these operational hurdles prevent CMS from creating the regulations that will govern these virtual groups. CMS should go to extraordinary effort to implement the virtual group concept as soon as possible.

The Congressional mandate is reason enough; however, there are more fundamental policy reasons to creating the regulations for virtual groups now and implementing them as soon as possible. By servings as an alternative to consolidation, virtual groups can stem the revenue shift from small to large practices projected in the impact statement which in turn stems consolidation and preserves competition.

By at least creating the regulations for virtual groups and thereby defining what a virtual group is it allows eligible clinicians to include it as an option for their future even if it cannot be implemented next year. But a nebulous definition of what a virtual group is means that is not a serious option for eligible clinicians to consider. If CMs is not able to create a definition fo virtual group for this final regulation, they should consider how the impact of the unavailability of virtual groups adversely affects small practices in the first year and seek to mitigate that impact through the CPS score.

MIPS: Quality

Reporting on quality measured requires two significant components, (1) the action of providing and maintaining quality care, and (2) the collection, management and reporting of patient and operational data. The actions of providing and maintaining quality care are integrated into the practice’s daily operations and do not typically require significant additional resources. However, the actions of collecting, managing and reporting patient and operational data do require additional tasks that are time consuming and costly.

For example, many large practices have allocated funds to hire additional staff or outsource these tasks to vendors. This has given larger practices an advantage over smaller practices because smaller practices do not have the funds or administrative personnel to sufficiently perform these tasks. Moreover, small practices have to sacrifice time and attention that would have been dedicated to their beneficiaries’ care to reporting on their quality performance. Overall, it is more difficult for smaller practices to capture their true level of quality in their reporting measures compared to larger practices.

This administrative burden on smaller practices creates a situation where larger practices can receive quality performance scores reflective of their administrative prowess not their quality of care and earn inaccurate bonuses. Considering the disadvantages outlined above we encourage CMS to compare quality scores from like sized practices to like sized practices. The practice breakdown used in the value-based modifier is well understood and could be incorporated here. This is an area where simplicity should be paramount; therefore, we recommend comparing practice size at the TIN level regardless of reporting mechanism.

We applaud and support CMS’s extensive efforts to include specialists in the quality component of MIPS.

MIPS: Clinic Practice Improvement Activities

We believe that MIPS eligible clinicians or groups that CMS identifies as participating in APMs for MIPS should receive the full 60 credits for the CPIA performance category. The activities that lead to success in an APM directly overlap with the activities CMS outlines as clinical practice improvement activities. The incremental value of reporting on just 2 or 3 additional activities is simply not enough to justify the administrative burden to both CMS and the eligible clinicians in the APM. Section 1848(q)(5)(C)(ii) of the Act states that “MIPS eligible clinicians or groups who are participating in an APM for a performance period must earn at least one half of the highest potential score for the CPIA performance category for the performance period.” CMS clearly has the latitude to do more than “at least.” APMs incentivize eligible clinicians to not only focus on activities within the subcategories of the CPIA measure such as expanded practice access, care coordination, population management and beneficiary engagement but also puts great emphasis on the outcomes of these processes. Putting the value of APM participation at just two clinical practice improvement activities undervalues the work required to participate in an APM.

We also support the concession for small, rural or health Professional Shortage Areas (HPSA) Practices to submit a minimum of one activity to achieve partial credit or two activities to achieve full credit. If CMS were to not adopt our proposal of full CPIA credit for APM participation, we certainly would hope that CMS would grant full CPIA credit to eligible clinicians who fit in this category and participate in an APM as the point value CMS proposes to count as full credit equals the point value CMS proposed to give for APM participation.

MIPS: Advancing Care Information

We support the goal of the Advancing Care Information (ACI) performance category to increase clinician and patient engagement, improve the use of health IT to achieve better patient outcomes, and continue the use of Certified EHR Technology. Eligible clinicians participating in APMs lead many of the efforts to use Certified EHR Technology in innovative ways. In addition to the group reporting discussed earlier, we recommend that CMS encourage such innovative uses by making bonus points available to eligible clinicians participating in APMs. Specifically, we recommend that a 20-point bonus be available for integrating clinical and claims data into a population health tool and for timely notification of transitions of care.

For consistency, we adopted the CMS proposal of half of the points for use and half of the points for performance.

Goal Measure Points
Maximizing care information available for population health Successful integration of clinical information from a certified EHR technology and claims information from payers into a population health platform 5 points
% of eligible clinicians whose clinical information is integrated into the population health platform % of 5 points
Safety and Quality of Care Transitions through awareness Successful integration of admission, discharge and transfer event notifications  from a hospital into the population health platform within 48 hours of the event 5 points
% of patients attributed to the APM with an event when the notification of the event is integrated into the population health platform within 48 hours of the event % of 5 points

 

These points should be bonus points instead of replacing existing ACI points to recognize that not all APMs are capable of these advanced integrations. By integrating the bonus points, CMS would recognize those eligible clinicians participating in APMs that are able to go beyond the proposals laid out by CMS in their proposal for ACI while not penalizing eligible clinicians who are not yet capable of these cutting edge integrations.

Additionally, as an advocate for small independent practices we would like to urge CMS to extend a modified version of the special consideration for the CPIA performance category to the ACI performance category. As we previously stated we fully support the goals and incentives of the ACI performance measure but we also understand the resource constraints and reporting burden small, rural and HPSA practices experience. Implementing, managing and efficiently utilizing health IT are costly and time consuming tasks that are still relatively new to small, rural and HPSA practices. We appreciate the flexibility provided for MIPS eligible clinicians to focus on measures which are most relevant to their practice. Therefore, we recommend that CMS lower the required amount of 100 points to 75 points for small, rural and HPSA practices to receive full credit in this performance category. For example, small, rural and HPSA practices could receive 50 points in the base category and 25 points in the performance category to receive a total of 75 points and the full credit for the ACI performance category.

Attestation Statements as Part of ACI

We are concerned with the requirement for eligible clinicians to attest to CMS that he or she cooperated in good faith with the surveillance and ONC direct review of his or her CEHRT under the ONC Health IT Certification Program, as authorized by 45 CFR part 170, subpart E, including by permitting timely access to such technology and demonstrating its capabilities as implemented and used by MIPS eligible clinician in the field. The wording of the attestation assumes such cooperation already occurred at the time of attestation when in all likelihood it will not have occurred at the time of authorization. We recommend that the attestation be changed to he or she will cooperate or has cooperated in good faith. At the time of attestation CMS should make available links to descriptions of the surveillance program as it is likely that the majority of eligible clinicians will be unaware of the program until they reach this attestation statement.

The attestation statements regarding the support for health information exchange and the prevention of information blocking while well intended could be very difficult for eligible clinicians to implement. We attempted to envision an audit of these attestation statements and immediately encountered several concerns. Most notably the second and third statements include language that implies active monitoring.

the eligible clinician, EP, eligible hospital, or CAH would be required to attest that it implemented technologies, standards, policies, practices, and agreements reasonably calculated to ensure, to the greatest extent practicable and permitted by law, that the certified EHR technology was, at all relevant times: connected in accordance with applicable law; compliant with all standards applicable to the exchange of information, including the standards, implementation specifications, and certification criteria adopted at 45 CFR part 170; implemented in a manner that allowed for timely access by patients to their electronic health information; (including the ability to view, download, and transmit this information) and implemented in a manner that allowed for the timely, secure, and trusted bi-directional exchange of structured electronic health information with other health care providers (as defined by 42 U.S.C. 300jj(3)), including unaffiliated providers, and with disparate certified EHR technology and vendors.

the eligible clinician, EP, eligible hospital, or CAH would be required to attest that it responded in good faith and in a timely manner to requests to retrieve or exchange electronic health information, including from patients, health care providers (as defined by 42 U.S.C. 300jj(3)), and other persons, regardless of the requestor’s affiliation or technology vendor.

In the second statement there are many statements that would require clarification such as at what point is implementation complete, is compliance with standards a requirement to use those standards exclusively? Would an auditor expect to see an active monitoring system to detect connection down times and the timeliness of electronic responses or would written policy be sufficient? Rather than engage in the difficult task of determining what level of action these two statements require, we recommend that CMS remove the second attestation statement. This attestation is covered in the attesting to the availability of individual certified EHR technology capabilities as part of the ACI score. We then recommend combining the first and third statement to center around the did not knowingly and willfully take action to limit or restrict standard. Our recommended consolidated attestation statement is:

The EP, eligible hospital and CAH attests that it has established a workflow to respond in good faith and in a timely manner to requests to retrieve or exchange electronic health information, including from patients, health care providers (as defined by 42 U.S.C. 300jj(3)), and other persons, regardless of the requestor’s affiliation or technology vendor and neither in the development of the workflow nor in any subsequent action did the EP, eligible hospital and CAH knowing and willfully take action to limit or restrict the compatibility or interoperability of certified EHR technology.

MIPS: Auditing

If the audit includes chart review ten business days is far too short of a timeline to provide documentation to CMS. We are aware of no such audit process that requires source documents to be generated in such an unreasonable timeframe. We strongly recommend that CMS lengthen this time requirement to at least 30 days.

In addition in the year 2017, CMS should not expect that all primary sources for reporting quality, CPIA and especially ACI are available as documents that can be transferred. CMS should request access to systems when they are the primary source. This can be done through remote access or facilitated through scheduled screen sharing sessions with the remote auditor and the MIPS eligible clinician or their representative. This will save countless hours both for the MIPS eligible clinicians and for CMS. It would also be a far more rigorous audit than simply relying on printed reports. When designing an information technology, it is simply not possible to predict what the auditor might someday require to substantiate that a document was generated by a primary source. For example, in auditing meaningful use auditors requested that the EHR logo or other trademarked identifier be on the meaningful use data reports. Many if not most EHR developers did not anticipate this requirement. By relying on an antiquated audit methodology the relies on the ability to produce transferrable documents, CMS will undoubtedly create new, unanticipated requirements that while created with good intentions will detract from the work of ensuring the actual primary system works well. It is time for CMS to move past documentation based auditing.

Implementing MACRA for APMs

MACRA sets the rules by which APMs are judged. As most APMs already exist, if MACRA is to impact the transition from volume to value quickly CMS will have to engage in rapid cycle updates if eligible clinicians are to adapt to the changes in MACRA. The two implementation factors with the most urgency are:

  • CMS should alter existing APMs so they all have at least one track that qualifies as an Advanced APM by requiring the use of CEHRT, meeting quality requirements and contain only the minimal risk requirement to qualify as an AAPM
  • Eligible clinicians currently locked into APM contracts should be able to change APMs or move between tracks in their APMs before the APM contract expires for both 2017 and 2018 APM participation

We provide methods to accomplish both of these goals in the Medicare Shared Savings Program as that is the APM in which we currently participate; however, it is equally important that these goals be accomplished for all APMs if MACRA is to succeed.

A MACRA-era Two-Risked Risk Track for MSSP

The MSSP is one of CMS’s most mature and most popular APMs. Yet uptake in two-sided risk has been low. We believe MACRA outlines an opportunity to create a more desirable two-sided risk track in MSSP. Earlier, in this letter we proposed a risk measurement based on Medicare Part A & Part B revenue received by the ACO participants to meet the normal nominal risk standard for AAPM. This risk can be easily integrated as a stop loss scenario into Track 2 and Track 3 with the addition of one line of regulation text for Track 2 and Track 3 MSSP ACOs each. Changes are in bold

For Track 2: 42 CFR 425.606 (g)

(3) 10 percent in the third and any subsequent performance year, or

(4) 15 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year.

For Track 3: 42 CFR 425.610

(g) Loss recoupment limit. The amount of shared losses for which an eligible ACO is liable may not exceed 15 percent of its updated benchmark as determined under § 425.602 or 15 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year.

These straight forward changes could be proposed in the upcoming Physician Fee Schedule proposed rule which has been used to make changes to the Medicare Shared Savings Program in the past. Alternatively, another proposed regulation could be issued this year for this express purpose.

While this addresses the financial risk aspect of the move to two-sided risk in MSSP and its relationship with MACRA, we would be remiss not to include here other model changes that could encourage health care providers to move to two sided risk.

CMS should change how it view risk adjustment. Rather than the current view of fear that it will lead to paying for coding, CMS should focus on the true purpose of risk adjustment which is make different populations comparable to one another. We have advocated, along with many others, for the last two years that to measure real ACO value risk scoring must accurately reflect the measured population. The artificial cap imposed by CMS on risk scoring turns ACOs into mini-insurance companies. This in turn scares ACOs away from two-sided risk because they are no longer responsible for just population health, but also statistical anomalies. Nothing keeps ACOs out of two-sided risk more than the cap on risk scores. It is also the only area where CMS is not leading the accountable care movement, but falling behind commercial health plans.

The third important step CMS can take to measuring ACO value is to include regional inflation update factors instead of national inflation update factors in all contract years. CMS should seek to reward ACOs for the work they do in creating difference in difference ACO value not because they happen to be in a low cost or high cost area on any given year. CMS’s own analysis for their recent regulations on the MSSP shows that very few ACOs can individually impact their area’s cost curve. Every ACO can impact whether the person got better care in the ACO than they did out of it. A regional inflation update ensures that the work of the ACO impacts the ACO’s financial future instead of regional cost arbitrage. ACOs have begun to calculate headwinds and tailwinds (i.e. is the benchmark lower or higher than the most recent year’s costs) to determine their likelihood of success. This is what CMS intended to reward areas with falling costs with more ACO participation. However, this intent has gone awry. First, rarely does any individual ACO have significant impact on their regional costs so the reward or disincentive is not due to the past work of the ACO participants. Second, ACOs have not been able to determine these headwinds or tailwinds prior to receiving ACO data from CMS so the phenomenon cannot drive increases or decreases in ACO participation. Given that the hoped for effects of this policy have not materialized it is time to revert to the more accurate measurement of regional inflation in benchmarking and annual update factors in the first contract and end the unnatural arbitrage opportunities national inflation updates are causing across the MSSP.

Combining these three improvements to the MSSP will result in a significant increase in two-side risk participation which will in turn increase the value generated for beneficiaries and Medicare by health care providers.

Creating Time: Supporting Informed Decisions by Eligible Clinicians

There are two ways that CMS can create more time for eligible clinicians to make informed decisions about how best to participate in MIPS or AAPM. First, CMS can support eligible clinicians’ ability to make informed decisions by allowing all eligible clinicians to re-evaluate their APM participation in light of the finalized MACRA implementation regulations. Many APMs, including MSSP, have multi-year contracts. Eligible clinicians by definition could not have included adequate information about MACRA in their decision making process. Eligible clinicians currently locked into APM contracts should be able to change APMs or move between tracks in their APMs before the APM contract expires for both 2017 and 2018 APM participation. Not allowing this flexibility will inevitably slow the transition to AAPMs with no obvious gain from not allowing the transition. We strongly recommend that CMS include their intention to allow all eligible clinicians to make a choice on whether to participate in an AAPM in 2017 or 2018 after the eligible clinicians have the opportunity to review the finalized regulations governing MACRA.

The second as we addressed earlier in our comment letter is to make the AAPM qualifying participant determination on the day after the QP performance year instead of the last day of the QP performance year. The operational requirements for shortening the timeframe for AAPM measurement include: a) calculation of payment or patient count thresholds to determine eligibility b) calculation of total Medicare Part B revenue and c) incentive award payment by Jan 1, 2019.

The current proposal is to use qualifying AAPM participation as of Dec 31, 2017, combined with a 2018 analysis of 2017 total revenue and AAPM revenue to determine Jan 1 2019 payment.

However, AAPM participation begins far in advance of the performance period. ACOs must establish governance and recruit practices prior to the July 31 2017 application deadline. Individual NPIs and TINs are verified by CMS throughout the fall, and a final determination of ACO participation and preliminary beneficiary attribution is conducted well before Dec 31st 2017. This accurate list of eligible clinicians who will be participating in eligible AAPMs in 2018 can and should be used as the basis for calculation of payment or patient count thresholds to determine eligibility for AAPMs. Calculation of total Medicare Part B revenue can be done in Q1 2018 based on 2017 (benchmark year) revenue in order to establish incentive award payment by Jan 1, 2019.

In essence, we are proposing that the timeframe for AAPM participation be moved by one day from Dec 31, 2017 to Jan 1, 2018. By including one additional day for the determination date for AAPM the timeframe for model innovation can be shortened by a year.

In reality, practices interested in participating in AAPMs will be simultaneously applying for AAPMs and performing quality improvement activities under MIPS regardless of whether our proposal is adopted or not. Due to the application deadlines, no clinician can be 100% certain of their MIPS performance or exclusion during 2017. Alignment between MIPS activities and ACO performance should ensure that there is minimal duplication of effort. While the benefits of these changes are particularly acute for 2019 given the regulatory timeframe, it would have lasting benefits every time a new Advanced Alternative Payment Model is introduced.

**Alternative**

The statute specifically allows for the provision of less than a year. The first six months of 2018 (or the last six months of 2017 combined with the first six months of 2018) could be used for 2018 participants in at least annual commitments. This potentially creates a more accurate measurement of whether a participant met the threshold. However, it creates a new timeframe and would not allow CMS any opportunity to inform the participant during the MIPS submission window of whether they qualify. In this alternative all 2018 participants should submit for MIPS. It does still allow for plenty of time for CMS to make accurate FFS payments on Jan 1, 2019.

 

[1] http://www.nejm.org/doi/full/10.1056/NEJMsa1600142