Recently, Aledade announced a new agreement to expand value-based care in Delaware, West Virginia, and Utah. Aledade has now signed 24 value-based agreements covering commercial fully insured, self insured, Medicare Advantage, and Medicaid lives. Our providers now have over 260,000 attributed patients in these contracts (in addition to over 300,000 lives attributed through the Medicare Shared Savings Program). We are proud to be bringing high-value care to more people across the country.


Aledade’s primary goal is to maintain independent practices as the foundation of our health care system. We help independent physicians succeed in value-based care arrangements. We start by enrolling them in the Medicare Shared Savings Program, but our physician partners want to provide high quality care to all of their patients regardless of their insurance. So, simply signing up for a Medicare ACO is not enough. We discuss with our physicians their goals and then find partnerships with other payers that align with those goals.

By taking a practice-centric approach, we ensure that the physicians in our network have a voice at the negotiating table with payers. Historically, primary care providers, particularly those in small and independent practices, have not had the opportunity to voice their opinions to national payers and, therefore, had little control over the design of  through value-based incentive programs. We’re changing that. And our payer partners welcome the opportunity to hear from primary care providers committed to transforming the care of their patients.


Part of what makes the Aledade approach to payer partnerships unique is the ripple effect of value-based care throughout the physician’s patient population. Every time we sign a contract, the payer agrees to share claims data with Aledade and our partner physicians; for the first time, our providers can see in the Aledade population health tool, our “App,” the opportunity to improve the health and cost of their patients. That’s important because it allows physicians to practice medicine the way they have always wanted to. When we establish ACO agreements with payers, we enable physicians to apply new workflows to these payer’s members. Providers can then use data-driven insights on more of their patients and be properly rewarded for all the value they are generating. This allows true practice transformation with benefits for payers, providers and patients.  


Our commercial contracts are good for doctors, good for patients, and good for society, because these contracts may generate revenue when patients get better care at lower cost. Aledade is proud to help align these interests in all of the work we do with practices and health plans.

Payers, physicians, patients, and Aledade all want the same thing—the best possible care at the lowest possible cost. We are excited to partner with Aetna so our providers in Delaware, West Virginia, and Utah are paid for health and cost improvement and not volume. Now begins the fun work of applying our analytics and practice transformation support so the patients who need extra support and care receive it.

For more information about how to join an Aledade ACO, please email us at

On Monday, April 22nd Secretary Alex Azar stood at the podium of the American Medical Association and said

“This initiative will radically elevate the importance of primary care in American medicine.”

The initiative he was talking about comprises two new value-based primary care models collectively known as the CMS Primary Cares Initiatives. Aledade believes that excellence in primary care combined with excellence in population health leads to better quality and lower costs. Achieving excellence in primary care in today’s health care system means more primary care that meets the needs of patients, not less. Excellence is defined by how well a practice meets the needs of its patient, not how many 10 minute appointments a physician can fit into a day. Excellence is measured by improvements in quality and lower costs.

The models represent an opportunity to move payment of primary care services away from a 10 minute appointment to a more flexible payment structure giving practices more freedom to both meet the needs of their patients and run a financially successful practice. When coupled with accountability for total cost of care, they represent opportunities to make people’s lives better and reduce the burden on the Medicare trust fund. We believe Medicare took a big step towards value based care today.

Primary Care First

This 5-year model is an evolution of the current Comprehensive Primary Care Plus (CPC+) model. Track 1 and Track 2 of CPC+ augmented fee for service with additional payments to provide more comprehensive services, such as care management. In contrast, Primary Care First seeks to replace fee for service and provide enhanced payments based on performance. Traditional fee for service payments would be largely replaced with three payment streams:

  • Per-Visit Payment: A flat, per-visit rate for each traditional office visit
  • Population-Based Payment: A prospective, risk-adjusted payment for each attributed Medicare beneficiary.
  • Performance-Based Adjustment: Quarterly incentive payment for performance on risk-adjusted acute hospitalizations, with an upside of up to a 50% increase in practice revenue, and a downside of down to a 10% decrease in practice revenue.

Practices would still submit claims for purposes of calculating co-insurance and risk adjustment. But breaking the link between the claim and payment allows practices to redesign their patient interactions (e.g., extended, at home, telephonic, virtual, or group) without fear of financial ruin or compliance penalty. There is also a sub track in the model focused on hospice and palliative care.

Practices in 26 regions can apply for January 2020 this summer or January 2021 next summer (practices already in CPC+ can switch for 2021). The regions include all existing CPC+ markets plus new markets: AL, AK, CA, CO, DE, FL, Greater Buffalo region, Greater Kansas City, Greater Philadelphia, HI, LA, ME, MA, MI, MT, Northeast NH, NJ, ND,  North Hudson-Capital region, Ohio and Northern Kentucky, OR, OK, TN, RI, VA.

We believe that this model will be most impactful when it is coupled with participation in an accountable care organization (ACO) responsible for total cost of care. Given the great alignment between Primary Care First goals and Medicare Shared Savings Program goals, the payments enable the work of the ACO even more so than the current Comprehensive Primary Care Plus (CPC+) model. CMS has not yet detailed how the details of that combination would work. We urge CMS to allow the programs to come together as they currently do in CPC+. The ACO would be accountable for payments in Primary Care First as they are responsible for the total cost of care. There are many details about both models still to be released by CMS and we look forward to seeing these interactions soonest.

Direct Provider Contracting

This model is an evolution from the Next Generation ACO model. It is much more complex than the Primary Care First and most of the crucial details (It’s all about the benchmark) are still to come. Here is what we know.

There are two versions of the model

  • Primary care services for ACO participants are paid for with fixed, capitated payments  to the ACO equal to 7 percent of the total cost of care and the ACO is responsible for 50 percent savings and losses on total cost of care.
  • Primary care services, plus other services for which the ACO can negotiate contracts, are paid for under capitation, and the ACO is responsible for 100 percent of the savings and losses on total cost of care.

The first version is not immediately interesting to us today because we can already get 75% of the savings and only 40% of the losses under Enhanced. However, we will be sure to look at the details as they become available.

The second version does offer more of the savings, but with a vastly increased downside. There is also the possibility of capitation for improved cash flow, even if most of it is passed on to other health care providers (this is a feature that was included in the Next Gen ACO, which allows the ACO to negotiate payment rates with providers/services outside of the ACO). The details of how much money, how you contract, how you pass it on to providers are all as of yet unavailable.

What little we know about the benchmark is that it will be a blend of historical and regional benchmarking, similar to MSSP. However, the regional methodology will be driven by more established Medicare Advantage (MA) rate setting methodology rather than the methodology used for MSSP.

The model is based on MSSP-like attribution methodology but CMS has also placed a heavy emphasis on supplementary voluntary alignment. CMS expects that most organizations would seek out voluntary alignment where a beneficiary chooses a physician in the ACO on To allow for that to occur, ACOs apply to be in the model this summer for January 2020; however, 2020 is Performance Year 0. The responsibility for total cost of care (and Advanced APM status) begins 2021.

Giving the ACO responsibility for paying for primary care creates even more options for excellence in primary care and population health. With that responsibility also comes accountability for total cost of care in the model itself. When taking on that accountability for total cost of care, an ACO must understand how that total cost of care is calculated. It does indeed become all about the benchmark as we explained when we considered the Next Generation ACO model. We are intrigued by the idea of using MA rates for at least a portion of the benchmark. We encourage CMS to be flexible and supportive of different mechanisms to pay for primary care and to maintain tight links to MA policies wherever possible. We are eagerly looking forward to learning more about this model.

CMS Primary Cares

In conclusion, we have always acknowledged that we are building value based health care models on a fee for service chassis. There is massive infrastructure already in place for fee for service that allows for the trillions of dollars in health care to flow between people and organizations in health care. These models do not replace that infrastructure nor do they really bypass it. What the models do is give primary care physicians the financial flexibility to put the needs of the patient ahead of what the code description thinks the patient needs. At Aledade, we look forward to putting that flexibility to work for better quality and lower costs supporting practices in the move to value as we have over the last 5 years for more than 400 practices.

As a care manager, I’m a patient advocate and the first line of defense for keeping high risk patients healthy. My regular calls help build a trusting relationship with these patients so that I can help them control their chronic conditions and prevent any new issues from becoming serious. During my monthly calls with patients, I quickly assess their health concerns and start evidence-based protocols to divert avoidable emergency room visits or unnecessary hospital admissions until they can be seen by their provider. Beyond that, I get to connect with individual patients in a personal way to help them along each step of their health journey.

What follows is a story about the power of these relationships. It’s a story about how I was able to help a patient get through a high-risk situation, in the middle of the ocean, because of the trusting relationship we’d built over time.

Recently, one of my care management patients began experiencing symptoms related to his heart failure while on a cruise ship in the Bahamas – a cruise he was advised not to go on by his cardiologist. Throughout the day the patient had been experiencing dizziness and shortness of breath. During dinner on the formal night of the cruise his symptoms worsened. In a panic, he and his wife called me from the next port.

Building Trust
I wasn’t always the patient’s first call for any healthcare concern. I had been working with this patient since I started at this practice eleven months ago, and it took us time to establish our rapport. We enrolled him in our care management program and began a monthly call to discuss how he was doing and talked through his challenges that could negatively impact his health. When I first met with him his wife was on a month-long visit with their grandkids. One day he came to the office and, very upset, he explained he could not afford his medications and that he was all alone at home. I worked with his primary care physician (PCP) to switch his insulin to a less expensive brand and told him to call me anytime, not to hesitate, and reinforced that I’m here to help him in any way that I can. During these initial conversations about his care, he thanked me over and over again for listening to him and helping him make good decisions about his health. That’s when I knew we were making a connection.

Staying Connected
Three months later, I noticed during our monthly call that he sounded a little off. I called his wife to make sure everything was ok and that’s when she told me what was going on. He was not taking his medications correctly, sometimes forgetting a dose and he had started to increase his alcohol consumption. Right away, I made an appointment for him to come to the office so that we could discuss these new concerns with his PCP. Because of my trusting relationship with the patient we were able to have an open and honest conversation with his care team and develop a plan of care to address the impact of his alcohol use.

A Call During Crisis
It was this relationship that enabled me to extend him a lifeline, even from far away.
When we connected from the cruise port, the patient and his wife were both scared and nervous and had no idea what to do. I reached out to the provider who recommended diet modifications to the patient and to stay on the ship for the remainder of the time. I also made an appointment for him to see his PCP immediately after he and his wife were back on land and I followed up to make sure he attended that visit.

During that appointment, we addressed ways to help get his health back on track. After following the new plan, his health improved!

Lasting Impact
This story is so impactful because it reminds me that Aledade’s care management program works. With support and training from Aledade, care managers across the country are able to help build relationships that keep patients healthier and out of the hospital. That’s what we’re here for – to help patients, even if they’re stuck on a boat in the middle of the ocean.

In communities across Mississippi and Tennessee, a group of primary care doctors are changing health care for their patients, their practices, and society: they are practicing the kind of patient-centered care that inspired them to go into medicine and their efforts are creating measurable value.

The work started in January of 2016 when 16 independent primary care offices across Mississippi and Tennessee took a chance on improving quality outcomes and lowering costs for their patients. These practices teamed up with Aledade to form the Aledade Mississippi Accountable Care Organization (ACO) that is now composed of 22 participants. Aledade partners with independent practices, health centers, and clinics across the country to build and lead ACOs anchored in primary care. As a part of the ACO, member practices work collaboratively and share in the savings they create.

The work paid off. The Aledade Mississippi ACO was successful in earning a quality score of 95% while saving Medicare $9.8 million in 2017. We reduced hospital admissions by 9%, cut unnecessary home health spending by $4.8 million and decreased hospital readmissions by 3%. We were also able to increase the number of office visits performed by primary care providers by 33% and increase the number of transitional care visits performed by 7%. These numbers mean healthier patients receiving higher quality care from their local primary care doctors – doctors who are now better-positioned to sustain their independence.

Utilizing Aledade’s combination of resources, technology, and local support, the practices in the Mississippi and Tennessee ACO have influenced a change in the health care system in our region. Dr. Katie Patterson, of Indianola Family Medical Group in Mississippi, recently stated that the ACO work has allowed her to better care for her patients with the knowledge of what’s happening outside of the office walls. “It’s provided me with greater knowledge of total patient care versus just the snapshot we are given in the office.”

Dr. Stephen Hammack of Premier Medical Group in Mississippi also vocalized the impact on his practice: “I am able to be more proactive about my patients’ needs…and identify patients with needs that may have gone unnoticed previously.”

We are achieving these results through a number of initiatives, such as “Home for the Holidays”. There is often an uptick in illness as well as emergency room visits around the holidays and this program helped practices to educate their patients and keep them healthy. This program included proactively calling patients, mailing postcard reminders, and focused conversations during office visits. Practices used same day appointments and twenty-four hour call lines to help patients avoid spending their holidays in a hospital waiting room.

Another initiative we pursued related to managing transitions of care through timely health information sharing with inpatient facilities. We work closely with a few local hospitals and utilize innovative strategies for gathering additional information from others. One clinic hired a nurse to follow patients from admission to discharge, ensuring the patient’s needs were met and that they received timely follow up. Another clinic assigned a nurse to use the local hospital’s health record to monitor the daily patient census, identifying when patients were discharged and then following up with them promptly.

While the revenue generated from savings is a great incentive to keep doing the work, one of our local medical directors, Dr. Syed Zaidi, points to a broader benefit: “We’re able to be a better practice now. We can help our patients more efficiently and provide a higher level of quality care.” That is the goal: efficient, quality care.

The holidays are fast-approaching. For some it is a celebratory time with family and friends, while for others it is more difficult.

Many patients with chronic diseases struggle to stay healthy during the holidays. Some tend to eat or drink too much during the holiday season and unfortunately, holiday foods are usually high in fat, salt, or sugar. Traveling and change in routine can lead to skipping or missing important medications. Additionally, holidays can increase stress and depression. Unfortunately, during this time, the hours for primary care clinics and pharmacies are reduced and patients are not always able to get the support they need.

As you gear up for the holiday season, here are our top five tips for helping your patients to stay healthy and “Home for the Holidays.”

1. Focus on high-priority patients. In many Aledade ACOs, partner practices are reaching out to high-priority patients via phone call, email, or mail. High-priority patients are those who frequently visit the Emergency Department (ED), have been recently hospitalized, or are on the chronic care management worklist. Many ACOs are running phone banks, where Aledade staff or contractors call high-priority patients to inform them about their practice’s hours around the holidays. They also remind the patients about same day/next day appointments, the availability of an on-call provider 24/7, and the flu shot. Almost all of our partner practices are hanging Home for the Holidays posters and mailing postcards or emailing high-priority patients. These materials are customized with the practice’s office hours and holiday closures, as well as any specific after-hours information.

2. Reach out to high-risk patients under care management to make sure they have everything they need to avoid a visit to the local hospital. If they are frequent ED users, consider bringing them in for a visit, especially if they lack social support.

3. Take the time to update voicemail with holiday closing and on-call coverage information so patients and families know when you will be available for them. Try to avoid recordings that advise patients to go directly to the ER, rather, encourage them to call the on-call provider and if necessary, go to urgent care.

4. Ask your team to ensure that prescription refills are up-to-date for patients on your “worry list” and or reach out to local pharmacies who may be willing to fill your patients’ prescription by protocol for a short time if your office is closed.

5. Share your closing message about holiday plans through waiting room posters, mailings, website/patient portal, social media, or better yet with a friendly reminder in person with each office visit. The materials mentioned above can be a great place to start!

We know that the holidays can be stressful for some of your patients but hope that you will find a way to help them stay safe and at home while you and your staff enjoy some well-deserved time with your own families.

Download Customizable Poster & Flyer Template

Deborah C. Stamps, Marcella L. Carr, Holiday Season for a Healthy Heart, Critical Care Nursing Clinics of North America, Volume 24, Issue 4, December 2012, Pages 519-525, ISSN 0899-5885,

David P. Phillips, Jason R. Jarvinen, Ian S. Abramson and Rosalie R. Phillips Cardiac Mortality Is Higher Around Christmas and New Year’s Than at Any Other Time: The Holidays as a Risk Factor for Death Circulation. 2004;110:3781-3788,

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 ( 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 ( 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 ( 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” ( or “days spent at home” ( 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 ( 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.

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

I’m a Care Manager from Dixie Primary Care in Utah. I am responsible for contacting patients on a regular basis to monitor their care outside our practice. Our calls establish a reliable point of contact for patients with the greatest care demands. This allows us to stay on top of their health. Care Management shows our patients they have someone fighting in their corner, providing the support to make difficult lifestyle changes needed to turn their health around.

High-risk patients, often those with multiple chronic conditions, benefit most from Care Chronic Management (CCM) Program. Reflecting on the success of CCM, one patient comes to mind. This patient had chronic pain, COPD, A-Fib, Depression, Heart Failure, Hyperlipidemia, Hypertension, and Prostate CA, relied on a walker and cane for mobility, endured a number of breathing complications, weighed 265 pounds, and followed a pain medication schedule, when he began CCM in June 2017.

When first enrolled in the program, this patient was not ready to engage with me. After undergoing a knee replacement surgery, he recognized the importance of my team’s support in his recovery, and over time, my calls with him grew increasingly positive. I could begin to hear him smiling. Since his surgery, he is mostly pain free, only taking an occasional pain reliever as needed. Best of all, he is now walking freely, without dependence on a walker or cane.

The patient underwent an additional procedure on his nose that improved his O2 stats. He is able to breathe better and participate in more activities. In fact, he has started exercising and losing weight, thanks to both procedures and our partnership during his recovery. He joined a gym and works out with his wife three times a week. Now, he weighs 255 pounds!

After persistent follow up and unwavering support, this patient is engaged in his health. I am confident CCM and his increased participation in the program benefited him. When this patient and I began working together, we created a plan with the goal of exercising and losing weight. He is accomplishing his goals! Calling him a couple times a month, checking up on him, and providing accountability has catalyzed this process. This patient relishes the fact that he has completed his goals. I would even say he is overall less depressed as he now looks to the future.

If our practice wasn’t a part of an Aledade ACO, he would not have received this level of lasting, proactive support from someone on his team. Once he no longer needed follow-up appointments, he would have been off his doctors’ radars. But, because the patient had a CCM, he had support in reaching long-term goals, attaining holistic wellbeing, and addressing concerns that arose outside of the doctor’s office.

The support that Aledade has provided has given me tools that I can pass along to my patients. Helping a patient achieve their goals and take monumental steps towards wellness does not happen everyday and in every practice, which makes this story- a true success story- all the more exciting!

Every day, physicians are evaluated by a myriad of sources. Think of all the websites with provider ratings: Health Grades, Angie’s List, and even Yelp. These sites ask patients to review the quality of care provided by healthcare providers, and yet give no control to those who are being reviewed. Now, consider insurance companies and other payers who may provide scorecards based on patient metrics. As physicians, we may see a patient four times out of the year for 15 minutes, but we have no control over how they spend the other 8,759 hours of the year.

Also, take into consideration that no physician gets a perfect score across all of these scorecards. In today’s medicine, anything short of perfection is a “ding.” The reality is that dings are part of the new value-based world, and it’s important that we recognize them for what they are—opportunities for improvement rather than points of frustration.

Let’s face it, medical providers do not like to be judged. Many of us, as physicians, have succeeded in our professions due to our hard work and dedication. But, more importantly, our pursuit of excellence is what sets us apart. Perfection is the gold standard and anything less will not suffice. We believe that our patients’ lives depend upon it.

When we see scorecards produced by a payer and see that we do not meet or exceed all measures, many of us find this as being insufficient in the care we provide. As a medical director for Aledade, my conversation with primary care physicians in our national accountable care organization (ACO) network generally go like this:

The Over-Utilization Ding: Frequent Emergency Department (ED) Visits
“You mean to tell me I’m getting dinged for that guy? There is no way I can keep him out of the emergency room. He loves going there.”

The opportunity for over utilizers “frequent flyers” is to have them utilize you more. Less ED visits are a step in the right direction, so rather than trying to “fix” or “make perfect” one frequent flyer, we will instead attempt to reduce a few visits among all of your frequent flyers. We do this by helping practices expand same day access, teach patients to call the physician first, and add robust care management that targets patients who “love” the ED.

The Over-Budget Ding: Costs More Than Expected
“So what you’re saying is that I am getting dinged for his liver transplant? How am I supposed to control his costs? I am just his primary care physician.”
The opportunity for high cost patients is to start thinking ahead. Ask yourself the “surprise question” are the high costs due to a specific medical condition, like cancer? Would it surprise you if the patient died in the next six to 12 months? If the answer is no, has the patient or family received an end-of-life conversation? If this is not an end-of-life situation, is chronic care management appropriate? Are the costs episodic? If so, there might not be much that you can do besides embrace the ding.

The Quality Measure Ding: Failure to Meet a Seemingly Arbitrary Content Management System Defined By Quality Measures that Make No Sense Clinically
“You mean to tell me I’m getting dinged by a patient with diabetes, who refuses to take my medical advice? I am going to dismiss that patient from my practice so I never get dinged again.”

This particular ding can provide the opportunity to improve quality measure performance for an entire population. Can the measure be addressed across the entire population? Are you leveraging standing orders? Are you seeing poorly controlled patients more frequently until they reach a specific goal? Do you recognize the opportunity to improve your risk coding for these complex patients?

It’s time to rethink the ding. It can feel frustrating to have someone tell you that you are not doing your job well, but embrace the ding and let it be your call to action. Keep providing the best quality care to your patients, always with positive outcomes in mind. If you get dinged, then you will know where you need to get better. Focus on providing better care at affordable costs.

Four years ago, enticed by the vision of a better healthcare system in the hands of empowered and elevated primary care providers, I joined my longtime mentors, Farzad Mostashari, MD and Mat Kendall, on our third collective adventure – Aledade.

Since that fateful day, I’ve served in a handful of roles – teacher, learner, confidante, road warrior, doctor, and mediator. I could write of the way our incredible mission has motivated me, kept me centered and determined, driven me to keep learning. I could explain the feeling I get when one of our Aledade physicians relays to me an a-hah moment, having realized that the Annual Wellness Visit they just conducted just saved a patient’s life, simply by opening up a conversation about the patient’s circumstances and risk factors. I could tell of the pride and exhilaration born of gaining momentum, of extending our reach to new patients across the country.

Instead, I want to share the story of Aledade’s four years through its people.

Year One introduced me to our Chief Technology Officer Edwin Miller, fabled builder of Electronic Health Record systems and incredible humanist, who literally feels the pain of our providers in a way I never thought possible. He shares his passion for working on old cars with his son and has quietly amassed the most incredible t-shirt collection I have ever seen. Edwin taught me what it means to serve our providers, to put their needs first, to dive in and do whatever is necessary to reach our goals.

In that first year, Edwin and I both got to meet Becky Jaffe, one of our original Delaware family physicians, a tireless advocate for the independent primary care provider, and the doctor I would choose for myself or any one of my family members. Becky and our indomitable physician partners in Delaware, Maryland, Arkansas, and Staten Island pushed us to be better and helped us build this incredible rocket ship without an instruction manual (and while flying it). Our first Delaware Practice Transformation Specialist, Robin Senft, taught me that you can accomplish anything with a smile – and a homemade, hand decorated cake pop.

In our second year, we blossomed. I was lucky to get to know so many new members of the Aledade team as our company grew, including Christine Dang-Vu, Golden State Warriors’ number one fan and tenacious, brilliant practice advocate and implementation strategist (and executor). A veritable One-Woman Band, Christine exemplified for me the discipline and work ethic necessary to move the needle in this complex ecosystem.

Our third year introduced me to the miracle of motherhood and the challenges of being a working mom. My daughter Nina became the light of my life on October 21, 2016, and even after an extended maternity leave, I was just not ready to suffer being away from her. My Aledade family rose up around me and held my hand, gracious, gentle and patient. Countless colleagues – friends – counselled and supported me and helped me see that there was a balance and serenity to be gained through persistence, self-love and incremental progress. My eyes were opened to so many awe-inspiring examples of Aledade parents – Candice Cortes, Spring Lane, Joe Neumann, to name a few – who have navigated this complex and often heart-wrenching dance. I can’t imagine going back to a time without Candice’s incredible EHR and practice workflow knowledge, Spring’s enthusiasm, can-do-it attitude and results-orientation, or Joe’s quiet progress behind the scenes to get us the data we need to promote practice change.

In our fourth year, our ranks continued to swell with the most inspiring individuals, personally and professionally. We count among us Peace Corps volunteers, foster parents, mountain climbers, church leaders, yoga instructors, acupuncturists, chefs, world travelers, and rodeo athletes. Every day, my colleagues carry our core values of Grit, Service and Inclusion to their communities. I am so proud and grateful to work alongside this incredible team and I cannot wait to see where, and to whom, Aledade’s fifth year takes us.