The trillion dollar shift in healthcare payment “from volume to value” is well underway with both public and private payers and purchasers pushing provider organizations to participate in outcome-based risk contracts, stepping up from pay-for-performance and medical home models to a variety of accountable care and bundled payment programs.

But what are we to take away from the mixed results of these programs — from the lack of savings in the Comprehensive Primary Care demonstration, to the dropouts from the Pioneer program, the recently released underwhelming results from the first year of the Bundled Payment for Care Improvement Initiative, or the 2015 results from the Medicare Shared Savings Program?

One approach would be for partisans for each of these approaches to search for positive nuggets in the results from their preferred program, while heaping scorn on the other “competing” reforms.

Another would be to retreat altogether from the aspirations of achieving better care at lower cost, towards either resignation towards ever-escalating health care costs or more likely to (altogether regretful!) rationing of access to good healthcare for the most vulnerable in our society.

A third path would be to acknowledge that there is no magic bullet for “transforming healthcare” overnight, and that the work of redesigning our delivery systems to meet the expectations of the outcome-based payment models will be slow, hard, and uneven. We would accept that there are likely multiple payment reforms that will need to be implemented alongside each other, targeting different healthcare markets and different participants. (Capitated payments for truly integrated delivery networks. Mandatory bundled payments for proceduralists and hospitals. Accountable care for independent physician networks). And each model will need to be iterated and tweaked and incrementally improved.

That is what I choose to believe.

We are publishing today in the new issue of the American Journal of Managed Care, “A Report From the Field,” the detailed description of what our two ACO “freshman” accomplished in 2015, and openly discussing the challenges we faced, what we are doing differently now, and some policy changes that can put more wind to the backs of those in these trenches.

Here are a few of the key findings:

In the two of our ACOs that were part of the 2015 cohort, we successfully increased primary care utilization (and revenue). We saw significant quality improvements. We achieved rates of aspirin use for patients with ischemic vascular disease of 87 percent, screening and follow up for elevated blood pressure at 90 percent, and tobacco use screening and cessation at 93 percent.

Our independent primary care practices decreased emergency department (ED) visits by being more available and accessible to their patients and educating them about appropriate ED use. They increased contact with their patients after discharge (sometimes with the active help of hospitals, sometimes despite its absence), and substantially reduced readmissions and acute hospital utilization. (see table)

table

There are regulatory headwinds that ACOs in the MSSP program face. For instance, the calculated “benchmark” used to determine savings is a flawed measure of the counterfactual. By using national trends rather than regional comparators, MSSP program success is an inaccurate reflection of what costs would have been for ACO patients in the absence of the ACO (“difference in difference”). Regional trends (eg. in hospital coding, whereby utilization decreased but cost increased) will not be reflected in some ACO results, while others will benefit simply from downward regional trends. In addition, we (and I suspect many other ACOs) saw millions of dollars of savings evaporate due to downward risk adjustment, as a peculiar feature of the MSSP, wherein risk adjustment can decrease the benchmark, but never increase it. Aledade has the resources to understand and accommodate to these factors, but many ACOs do not. These are the sorts of regulatory tweaks that can make a true difference in health care delivery innovators staying with the program over the long run.

While physician-led ACOs do not have to contend with the “demand destruction” that stymie hospital-led ACOs, they need to pay particular attention to specialist costs. In particular, specialist practices that have been reclassified as hospital outpatient settings can double the cost to Medicare for visits and procedures. As we move forward, we are bringing more focus – and scale—to influencing downstream care through specialist tiering, referral management, and compacts.

There is a lot more detail in the full article. Overall, we have learned that given the right support and incentives, independent primary care practices can deliver better outcomes to patients, boost quality across the health care system, and lower costs. Achieving savings on the total cost of care takes time, but the benefits of the program to patients and taxpayers are not limited to those ACOs that received shared savings distributions. The movement “from volume to value” in payments must co-evolve with the delivery system’s ability to transform itself to deliver better care at lower cost. For the health of patients and the health of the health care system, we cannot retreat.

The comment period for Medicare’s 2017 proposed physician fee schedule closes this evening and as usual we take this opportunity to share on full comments on the proposed updates to the way Medicare pays for physician services.

 

 

Dear Administrator Slavitt:

Aledade partners with 205 primary care physician practices, FQHCs and RHCs in value-based health care. Organized into sixteen accountable care organizations across 18 states these primary care physicians are accountable for over 190,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than ten clinicians. We are committed to outcome based approaches to determine the value of health care. We are committed to using technology, data, practice transformation expertise and most importantly the relationship between a person and their primary care physician to improve the value of health care.

As fee-for-service continues and will continue to underpin health care financing for the near term, we support CMS’s continued efforts to refine fee for service. Specifically:

  • The expansion of the chronic care management code is a necessary refinement of care management to match the needs of the Medicare beneficiaries who need it the most.
  • The integration of mental health care management is long overdue and with the history of confusion that exists in Medicare coverage of mental health we encourage CMS to not only adopt the measures, but to spend considerable effort in making the requirements clear and availability of the service wide spread

On improving the Medicare Shared Savings Program

  • We have long advocated for an option for Medicare beneficiaries to choose their primary care physician and are fully supportive of CMS’s proposal. The level of beneficiary engagement this option brings to the MSSP cannot be measured simply in changes in attribution.
  • The proposed changes to quality measures mostly strike a good balance between the impact of the measure, the evidence behind it and the feasibility of accurately reporting the measure

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

Medicare Shared Savings Program

Incorporating Beneficiary Preference into ACO Assignment

We strongly support voluntary beneficiary choice of their primary care physician in all tracks of the MSSP. Currently, CMS only acknowledges primary care physicians when beneficiaries vote with their feet by walking through the practice’s door. However, there are many times where for a particular year that may not be an accurate reflection of the beneficiary’s wishes and normal care pattern. Simple and common examples, such as dealing with an acute illness or condition requiring specialized evaluation and management services, extended time away from primary residence, low health care utilizers where a single service plays a big role in determining the plurality of primary care services, or primary care physician (PCP) switching for a patient when they enter a skilled nursing facility (SNF), etc all could lead to inaccurate attribution. Beneficiaries should be able to also vote with their voice and declare that despite the data from a single, peculiar year, “this physician, this nurse practitioner, this physician assistant is whom I have a special relationship with, this is who I want to coordinate my care.” Thus we promote patient engagement and make known an active patient and physician relationship.

However, the benefits of giving beneficiaries this choice cannot simply be measured in improvements in ACO attribution. Empowering beneficiaries by creating a method for them to record their choice strengthens the physician-patient relationship, can serve as a driver for beneficiaries to access www.mymedicare.gov and the wealth of information stored there and generally increase engagement. This makes the implementation nearly as important as the decision to give beneficiaries the choice.

We appreciate the difficulty of implementing a system to accommodate this choice. Both for the difficulties in implementation and the difficulties in beneficiary education we recommend a single method for recording beneficiary, the beneficiary portal www.mymedicare.gov. As stated previously, we believe the benefits extend beyond improvements in attribution accuracy. Many of those benefits are dependent on increased beneficiary engagement shown by the beneficiary and/or their authorized family/friends interacting directly with Medicare not just filling out a form.

We do not support all of the various contingencies laid out in proposed rule. The manual process developed as a test within the Pioneer model was a significant administrative burden for ACOs, and the language provided by CMS for the outreach letter was highly confusing and often at odds with how beneficiaries think about their medical providers. The combination of these barriers resulted in low participation by ACOs. The process should be automated from the beginning even if that results in a delay in implementation.

Furthermore, the variations by track could lead to confusion among ACOs and difficulty to track beneficiary choice’s effect on attribution. We recommend simply that the most current choice of primary care physician at the end of the performance year be the driving choice. Therefore, a patient could switch out of a Track 3 ACO into a Track 1 ACO or switch out of a Track 3 ACO into no ACO at all. This does raise a concern for prospective assignment Track 3 ACOs and whether they would attempt to use beneficiary choice to move expensive beneficiaries out of the ACO to generate savings. While the corresponding decrease in risk scoring should prevent most unearned savings, we agree that CMS should track this carefully for signs of abuse, but should not complicate the process at the beginning in anticipation of a pattern that may not emerge.

Quality Measurement

Aledade, Inc. participates in the Health Care Transformation Taskforce and supports the principles laid out by the Taskforce for quality measurement.

  • Quality measurement should focus on outcomes;
  • Quality measurement should be consensus-based;
  • Quality measurement should allow for the rapid accommodation of changes in evidence-based medicine;
  • Quality measurement should cross over different payers and programs and every program should prioritize alignment with other programs; and
  • Quality measurement should materially impact the financial performance of value driven health care models.

The MSSP generally follows these principles. We urge CMS to accelerate its efforts to replace process with outcomes measures for the MSSP program.

We support:

  • The addition of ACO-37 and ACO-38, two outcome measures that report on inpatient hospital admissions of patient with clinical conditions that could potentially be prevented with high-quality outpatient care.
  • The change to ACO-12 (NQF #0097) for medication reconciliation. This measure emphasizes a robust medication reconciliation at the time it is needed most – care coordination with post-acute care providers – and aligns with Core Measures Collaborative recommendation.

We do not support the inclusion of ACO-44 (NQF #0052) Use of Imaging Studies for Low Back Pain in the Medicare Shared Savings Program. The measure specifies patients aged 18-50, which represents a small population of the Medicare program. We ran analysis showing that only 0.11% (98 out of 92,075) attributed MSSP beneficiaries would be in the denominator. This is across eight ACOs with three ACOs having 5 or less patients in the denominator. In addition, this is proposed as a claims-based measure which does not allow an opportunity to include information from the chart.  We do not believe that the administration of this measure in the MSSP adds sufficient value to the ACO program to justify its inclusion.

We support the proposed retirement and/or replacement of the four CMS web interface measures:

  • ACO-39 Documentation of Current Medications in the Medical Record – Replaced by ACO-12 (NQF #0097)
  • ACO-21 Preventive Care and Screening: Screening for High Blood Pressure and Follow-up Documented – Evidence base
  • ACO-31 Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)
  • ACO-33 Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy—for patients with CAD and Diabetes or Left Ventricular Systolic Dysfunction (LVEF <40%)

We support the proposal to eliminate ACO-9 and ACO-10, which both measure condition-specific admissions, and replace them with all cause admission measures for heart failure and chronic conditions. These will be easier for ACOs to track and trend internally for performance improvement purposes.

We fully support the Taskforce’s comments regarding TIN level participation, alignment and quality assurance.

Behavioral Health

One critical driver of medical costs is unmet behavioral health needs (mental health and substance use disorder issues). The most established model for addressing this challenge is the collaborative care model (CoCM) for integrating behavioral health and primary care. (http://icer-review.org/wp-content/uploads/2015/01/BHI_Final_Report_0602151.pdf)

We wholeheartedly support the new proposed regulations aimed at encouraging broader implementation of the CoCM for integrating mental health and primary care. However, we have concerns regarding the requirement that the “behavioral health care manager would be on-site at the location where the treating physician or other qualified health care professional furnishes services to the beneficiary.”

As you are aware, 55% of U.S. counties have no psychologist or mental health-trained social worker https://store.samhsa.gov/shin/content/PEP13-RTC-BHWORK/PEP13-RTC-BHWORK.pdf). Because of this, the proposed CMS regulations will likely be of great benefits to areas of the country meeting two conditions:

  • A trained mental health workforce is available locally for employment to provide on-site treatment.
  • The volume provided at the primary care provider’s office is large enough to support the employment of an on-site behavioral health specialist.

Both of these conditions are unlikely to be met in small, rural medical practices, and it is in these areas where access to behavioral health services is most lacking. Being able to integrate primary care and behavioral health services is an excellent proposed solution to these access issues. In order to help achieve this benefit throughout the country, we propose that the requirement for an on-site behavioral health manager be removed and that it be permissible to provide behavioral health care management via an off-site care manger using telephonic or video technology.

Should CMS not agree with this proposal, we would ask that you consider, at a minimum, to waive the requirement for on-site care management in areas that have been designated by HHS to be Health Professional Shortage Areas in Mental Health. Under this proposed change, we recommend that it be permissible specifically in these areas to provide behavioral health care management via an off-site care manger using telephonic or video technology. This would be similar to the current CMS waiver system for Rural Health Centers.

Chronic Care Management

More than any administrative burden, the biggest barrier to implementing CCM is the current one size fits all CPT 99490 valuation and payment. This one size fits all payment creates inverse financial incentive to provide the service for those who qualify, but need it the least and to stay away from those who are going to require intensive care management work. We applaud CMS on recognizing this need and proposing a high complexity code and additional time add-on to the CCM service. Both of these codes address deficiencies in using just the one code and should be finalized.

While we appreciate the lack of uptake in the first year of CCM we continue to urge careful monitoring of the utilization of CCM and the benefit it generates. Nationwide, substantial capital investment has been made in utilizing the CCM code and that investment will continue to increase utilization over time. CMS should carefully monitor utilization and benefit and be prepared to limit the higher payment codes. Specifically, we had suggested last year that the high risk beneficiaries who are in the top 20% of HCC risk scores for the country.

We understand the difficulty many physicians have had utilizing health information technology (HIT) in providing chronic care management and the physicians we work with have experienced this as well. Therefore, we support CMS’s proposal to back off the requirements of HIT in the provision of chronic care management services. We would recommend that CMS make it clear in the final rule that if this proposal is finalized that the goal is to eventually reinstate the requirements as HIT continues to improve in the area of chronic care management.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

Yesterday the leadership at CMS wrote a blog entitled “Focusing on Primary Care for Better Health” and we couldn’t agree more. Administrator Slavitt and Dr. Conway articulated four principles for CMS:

• Improve how we pay for care that we value.
• Provide more opportunities for primary care providers to practice the way they think is best.
• Reduce practice expenses associated with operating a primary care or other small practice.
• Explore and encourage far-reaching innovations to connect people with primary care in new ways.

Achieving these principles while ensuring the independence of primary care practice is what Aledade is all about. We are very pleased that the leadership of CMS is aligned with these goals and look forward to continuing to work with CMS on achieving them. So for the first time we post another blog in its entirety on Aledade.com.

Focusing on Primary Care for Better Health
By Andy Slavitt, CMS Acting Administrator (@aslavitt) and
Patrick Conway, MD, MSc, CMS Acting Principal Deputy Administrator and Chief Medical Officer

In the United States, we have historically invested far more in treating sickness than we do in maintaining health. The result of this imbalance is not only poorer health, but more money spent in institutions, hospitals, and nursing homes.

The road to a better health care system means correcting this imbalance. We should reinvest in what we value — primary care — as a practice, as a profession, and as an abundant resource for patients. In recent years, we have begun taking a number of meaningful steps to begin this reinvestment process. Today, we are proposing significant actions to improve how we pay primary care physicians, mental health specialists, geriatricians, and other clinicians. By better valuing primary care and care coordination, we help beneficiaries access the services they need to stay well. In addition to keeping people healthy, health care costs are lower when people have a primary care provider and team of doctors and clinicians overseeing and coordinating their care.

There are four parts to our strategy to emphasize primary care:
1.We are improving how we pay for care that we value. Today, through the Medicare physician fee schedule proposed rule, we are announcing an important set of changes that would improve how Medicare pays for primary care, care coordination, and mental health care. We conservatively estimate that these changes would result in approximately $900 million in additional funding in 2017 to physicians and practitioners providing these services. Over time, if the practitioners qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase could be as much as $5 billion in additional funding for care coordination and patient-centered care. These changes build on the work we’ve done to improve access to care in Medicaid by finalizing long-anticipatedrules that help support state delivery system reform efforts, and strengthening new policies to align payment with better, more cost-effective care and ensure that access to care is sufficient in key specialties.

2.We are providing more opportunities for primary care providers to practice the way they think is best. Medicare is transitioning to policies that reduce burden on both patients and clinicians by better rewarding coordinated, quality care. We’ve recently launched a new advanced primary care Medical Home model called CPC+, which will be broadly available across the country and will support primary care doctors’ and clinicians’ efforts to spend more time with patients, serve patients’ needs outside of the office visit, and better coordinate care with specialists.

3.We are finding ways to reduce practice expenses associated with operating a primary care or other small practice. We have been convening meetings with physician practices across the country to find ways to reduce reporting and compliance burdens, while at the same time increasing support to their practices. This spring, we proposed to streamline how Medicare pays for quality and value through the new Quality Payment Program, which includes features intended to reduce the reporting burden for clinicians. Through this new program, we’ve moved beyond meaningful use to the new Advancing Care Information category, which supports the vision of providers leveraging health IT to promote efficiency and clinical effectiveness based on their unique needs. In addition, the Transforming Clinical Practice Initiative supports more than 140,000 clinicians in sharing, adapting, and further developing their comprehensive quality improvement strategies.

4.We are exploring and encouraging far-reaching innovations to connect people with primary care in new ways. We have included telemedicine in a number of care models. The Rural Health Council is also helping to promote a strategic focus on access, economics, and innovation issues across rural America.

Today’s Proposals for Primary Care Payments in the Physician Fee Schedule

•With today’s primary care payment proposals, Medicare continues to move toward a health care system that encourages teams of doctors to work together and collaborate in order to provide more personalized care for their patients. Doctors will be compensated for spending more time with their patients, serving their patients’ needs outside of the office visit, and better coordinating care. These changes will deliver improved health outcomes that matter to the patient. Some examples of today’s proposals include:

•Increasing payments for routine office visits for treating patients with mobility-related disabilities. Currently, Medicare pays approximately $73 for these visits, even though the patient might need to spend more time with the physician or require more physical and staff support during the visit. Under today’s proposal, Medicare would pay approximately $119 for the visit.

•Increasing payments to geriatricians or family practice physicians – specialists who provide core services for the Medicare program. Under our conservative assumptions, we anticipate that these clinicians could receive a two percent increase in their payments for providing the care we propose to recognize under the Physician Fee Schedule. Over time, if all of the practitioners that can provide these services provide them to all eligible patients, we estimate that the payment increase could be as much as 30 and 37 percent respectively to these specialties.

•Proposing to pay for care using the behavioral health Collaborative Care Model. The Collaborative Care model supports mental and behavioral health through a team-based, coordinated approach involving a psychiatric consultant, a behavioral health care manager, and the primary care clinician and which extends beyond the scope of an office visit. Payment for care using this model will help address access issues for behavioral health and improve care for patients. This model, increasingly used by primary care practices, has demonstrated benefits in a variety of settings to improve patient outcomes. CMS is also proposing to pay for other approaches to behavioral health integration.

Strengthening Primary Care Beyond Medicare

As more people age into the Medicare program, we know that access to primary care is an essential tool for their health and wellbeing. We know that effective primary care, care coordination and planning, mental health care, substance use disorder treatment, and care for patients with cognitive and functional impairments can improve outcomes and result in smarter spending. Today’s efforts aim to better value primary care to ensure continued – and strengthened – beneficiary access to these valuable services.

We expect to see the impact of this proposal far beyond Medicare beneficiaries and hope that it will help strengthen the fabric of primary care throughout the country.

For more information, please visit: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-07-07-2.html.

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

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

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

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

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

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

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

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

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

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

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

 

Dear Administrator Slavitt,

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

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

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

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

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

 

Summary

Advanced Alternative Payment Models

Financial Risk

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

More than Nominal Financial Risk

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

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

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

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

MIPS

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

Quality

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

Clinical Practice Improvement Activities

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

Advancing Care Information

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

Resource Use

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

AAPM: Use of Certified EHR Technology

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

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

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

AAPM: Quality

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

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

AAPM: Defining Financial Risk

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

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

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

AAPM: What is More than Nominal?

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

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

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

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

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

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

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

 

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

AAPM: QP Performance Period

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

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

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

MIPS: Composite Performance Score

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

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

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

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

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

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

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

MIPS: Quality

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

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

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

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

MIPS: Clinic Practice Improvement Activities

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

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

MIPS: Advancing Care Information

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

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

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

 

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

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

Attestation Statements as Part of ACI

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

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

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

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

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

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

MIPS: Auditing

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

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

Implementing MACRA for APMs

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

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

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

A MACRA-era Two-Risked Risk Track for MSSP

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

For Track 2: 42 CFR 425.606 (g)

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

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

For Track 3: 42 CFR 425.610

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

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

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

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

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

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

Creating Time: Supporting Informed Decisions by Eligible Clinicians

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

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

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

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

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

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

**Alternative**

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

 

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

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

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

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

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

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

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

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

Let’s look at these questions.

What is a Medical Home Model?

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

What is financial risk?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The same three as before plus

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

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

How much financial risk is “more than nominal”?

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

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

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

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

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

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

What makes measures comparable to measures under MIPS?

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

What is use of Certified EHR Technology?

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

To sum up:

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

Conclusion

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

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

Dear Administrator Slavitt,

Today Aledade, Inc partners with 111 primary care physician practices, FQHCs and RHCs in value-based health care. Spanning eight accountable care organizations in 11 states these primary care physicians are accountable for over 90,000 Medicare beneficiaries. We are committed to outcome based approaches to determine the value of health care. We are committed to using technology, data, practice transformation expertise and most importantly the relationship between a person and their primary care physician to improve the value of health care in the United States.

We believe this proposed rule addresses some of the most fundamental questions facing physician led ACOs and their place in the future of health care during and after the transition to alternative payment models. The move to regional benchmarking is the only sustainable course for a long-term financial model for population health. This is also an opportunity for CMS to right size two-sided risk in preparation for the transition to alternative payment models. Below is a summary of our positions on issues followed by an in-depth commentary of those positions. Thank you very much for your consideration as we move together through this exciting time in health care. Please feel free to follow up with me or Travis Broome (travis@aledade.com) if you or your staff have questions or would like to explore these positions further

Sincerely,

/s/

Farzad Mostashari, MD

CEO and Co-Founder, Aledade, Inc

 

Summary

Defining Value in Accountable Care

We believe ACO value is “did a person in the ACO get better care than if the person had not in the ACO,” a “difference in difference” approach. In today’s health care system, better care leads to lower costs. Financial models like the Medicare Shared Savings Program (MSSP) create a way to reward doctors for better care and the resulting lower costs. But better care is hard. Creating a financial model that rewards lower costs due to better care, but not due to avoiding care (stinting) is hard. Our comments all strive to get closer to measuring ACO value, but on a path that is good for physicians, good for patients and good for society. We recently published on value and sustainability of ACOs in the American Journal of Managed Care (http://www.ajmc.com/contributor/travis-broome/2016/03/creating-sustainability-in-accountable-care), which is also included as Attachment B.

Regional Benchmarking

We applaud CMS for recognizing in this rule that a policy of continually resetting historical benchmarks has a limited shelf life as improvements get harder and harder and lower costs get dearer and dearer over time. We also recognize that a pure regional benchmark creates such obvious financial winners and losers that it is not good for society or patients. Physicians above the regional benchmark would have no incentive to join the program and physicians below the regional benchmark would have little incentive to continually improve. This creates the need for balance. We agree with CMS that the balance is achieved by blending the two benchmark methodologies to create a path for long-term sustainability for an ACO.We encourage CMS to adopt this approach in Next Generation ACO as well and to make it available to 2012/2013 start MSSP ACOs. This blend requires continual improvement from the ACO, but at the same time rewards the ACO more and more for the true measure of value in a difference in difference approach.

Sustaining Successful, High Cost ACOs

After the first contract period all ACOs will fall into one of four buckets: above regional benchmark (or high cost) and successful; high cost and unsuccessful; below the regional benchmark (or low cost) and successful; low cost and unsuccessful. The inclusion of a regional benchmark benefits directly low cost ACOs. However, we believe there should also be an incentive for high cost and successful ACOs to continue in the MSSP. For this reason, we recommend that CMS include earned savings into the historical component of benchmark for the second and third contract.

Accurate Benchmarking for Population Health

We have advocated, along with many others, for the last two years that to measure real ACO value risk scoring must accurately reflect the measured population. The artificial cap imposed by CMS on risk scoring turns ACOs into mini-insurance companies. This in turn scares ACOs away from two-sided risk because they are no longer responsible for just population health, but also statistical anomalies. Nothing keeps ACOs out of two-sided risk more than the cap on risk scores. It is also the only area where CMS is not leading the accountable care movement, but falling behind commercial health plans.

The next important step CMS can take to measuring ACO value is to include regional inflation update factors instead of national inflation update factors in all contract years. CMS should seek to reward ACOs for the work they do in creating difference in difference ACO value not because they happen to be in a low cost or high cost area on any given year. CMS’s own analysis for this proposed rule shows that very few ACOs can individually impact their area’s cost curve. Every ACO can impact whether the person got better care in the ACO than they did out of it. A regional inflation update ensures that the work of the ACO impacts the ACO’s financial future instead of regional cost arbitrage.

Right Sizing Risk

While not directly addressed in the proposed rule, we believe CMS must consider today whether current MSSP Tracks work in the era of MACRA. Congress created the requirement for alternative payment models to have more than nominal financial risk. Congress could have said substantial financial risk or significant financial risk, but instead they said more than very small in amount. We translate this into motivating, but never ruinous. Enough to create concern, but not enough to instill fear. None of CMS’s current two-sided risk programs pass this test. All three (Track 2 and Track 3 of MSSP and the Next Generation ACO) create significant financial risk for a physician led ACO, potentially even ruinous financial risk. While across the program only a few will face such losses, the fear of being one of the few who are ruined is real and cannot be what Congress intended by the phrase “more than nominal.”

Our solution is for CMS to replace the current loss protection in the least risky Track 2 with loss protection that ensures no ACO will be liable for more the 15 percent of the Medicare revenues received by those who can share in the savings generated by the ACO. Two-sided risk coupled with this right-sized loss protection creates a concerning situation not a ruinous one. It motivates physician-led ACOs without making them fearful.

We support the inclusion of the optional fourth year as a mechanism to move ACOs to risk. CMS should consider whether it would benefit APM policies to have that year count as the 4th year of the current contract or the first year of a new risk-bearing contract.

Changes in ACO Composition Over Time

The benchmark must be reset using the same calculations and not proxies. ACOs live and die on single percentage points. If the proxy calculation is off by even a single percentage point an ACO could lose all their revenue if they dip below the MSR. Until CMS can clarify what the actual correlation of the proxy to current methodology is, no ACO can possibly support this change simply to alleviate the burden of calculation. CMS should not let expediency threaten the accuracy of the program.

Defining Value in Accountable Care

Value is a simple equation, benefit minus cost. Value is also in the eye of the beholder, defined by who gets the benefit and who bears the cost and in what proportions. In health care this is especially true because rarely is value determined in a two party transaction. Nearly every transaction has three parties: the health care provider, the person who receives health care services and the party paying for those services (society at large or a more limited group of people in the same insurance pool). The key to accountable care’s sustainability is to ensure that all three parties benefit as there can be no value without any benefit.

We believe the best definition of ACO value is “did a person in the ACO get better care than if the person had not in the ACO,” a “difference in difference” approach. In today’s health care system, better care leads to lower costs. This creates an opportunity for all three parties to see value creation. The person receiving the care gets more benefit in health and financially, the physician gets more benefit in satisfaction and financially and society gets more benefit financially. Higher quality leading to lower costs is a proven equation inside and outside of health care, accountable care gives us the vehicle to equitably share the value creation among the parties.

Since you have to start from where you are, the path towards the definition of ACO value is not necessarily measuring it directly in a classic difference in difference approach from day one. Our comments layout how to get from where we are today to a place where ACO value is measured most directly that is our view good for physicians and health care providers, good for people receiving their services and good for society.

Regional Benchmarking

ACO’s Regional Service Area

We agree that county is the best available geographic unit on which to base a regional benchmark. States simply vary too much in both geographic and population size to be used in a national program. CBSA, MSA, and CSA would generally be analogous to the counties that make them up as they are economically linked together by definition. There is one case where this may not be true and that brings us to our one recommendation to change the proposed ACO’s regional service area.

There maybe cases where an ACO covers such a high proportion of the residents of a given county that comparison population begins to suffer from small numbers. In those cases, we recommend including the contiguous counties in the ACO’s regional service area. The weight of those contiguous counties should reflect a weight necessary for the validity of the comparison.

Establishing the Benchmark Population for an ACO’s Service Area

In keeping to our definition of ACO value and a difference and difference approach, we must recommend that CMS exclude an ACO’s own population from the regional benchmark calculation. To include an ACO’s own assigned population would include historical benchmarking into regional benchmarking. CMS reported the median county penetration of ACOs as 12 percent. This means that 12 percent of the regional benchmark is actually historical benchmark if CMS does not remove an ACO’s assigned beneficiaries from the population. We appreciate the complexities of doing so, but we maintain that removing the ACO’s assigned population is imperative to an accurate measurement of the ACO’s value.

We fully support the following proposals:

  • Weighting the counties by the proportion of the ACO’s assigned population that resides in the county
  • Only including assignable beneficiaries in all ACO calculations

Determining County FFS Expenditures

We fully support CMS’s proposals for determining expenditures. We particularly note the importance of accurate risk adjustment between the two populations.

Applying Regional Expenditures to the ACO’s Rebased Benchmark

As a voluntary program, CMS should look at policies through the eyes of an individual ACO making a decision on whether to join or remain in the program. From a financial standpoint every ACO will fall into one of four groups at the end of their first contract.

ACO Status

We support the blending of the regional benchmarking into the ACO model as it creates the only truly sustainable path for accountable care and moves us closer to a difference in difference approach. However, we acknowledge that this is a financial disincentive for high cost ACOs. Of particular concern is the financial plight of individual ACOs who are successful at earning shared savings, but still above the regional benchmark at the end of the first three-year contract.

In considering the hundreds of different points on this graph that an individual ACO may find themselves we believe more flexibility is needed. First, hang on to good ACOs. We recommend that for the historical component of the benchmark continue to incorporate earned savings back into the benchmark as is done in the current rules. The adjustment for savings is a critical bridge for these individual ACOs as they work towards getting done to the regional average. The adjustment for savings would only apply to the historical portion of the rebased benchmark lowering its impact over time. Second, allow limited flexibility in the move to a blended benchmark over the first two contracts. We recommend the spectrum of that flexibility to be:

  • Year over year ramp up in the first contract (10% 1st yr, 20% 2nd yr, 35% 3rd yr) second contract is at 35% regional benchmark
  • Historical benchmark for the first contract leading to 35% regional benchmark in the second contract
  • Historical benchmark in the first contract with a year over year ramp up in the second contract (10% 1st yr, 20% 2nd yr, 35% 3rd yr)

This will increase the financial viability of individual ACOs while still moving all ACOs to the same place by the end of the second contract.

We support the move to 70 percent in the third contract period. If the true measure of ACO value is to be whether a person received better care at a lower cost in the ACO then they would have outside of the ACO then regional benchmarking must become the dominate measure. Moving only to 50 percent in the third contract would not be enough to move ACOs along in value.

While we understand that the Next Generation ACO is a model under the Innovation and therefore not subject to rulemaking, we take this opportunity to point out that the same arguments made here apply to Next Generation ACO. The arguments are arguably strengthening by the advanced two-sided risk aspect of the Next Generation ACO. We encourage CMS to adopt an in-contract ramp up of the inclusion of regional benchmarking in the Next Generation ACO model.

Updates to the Rebased Historical Benchmark

We support the move to regional update factors for resetting the benchmark. Furthermore, CMS should use regional inflation update factors instead of national inflation update factors in all contract years. CMS should seek to reward ACOs for the work they do in creating difference in difference ACO value not because they happen to be in a low cost or high cost area on any given year. CMS’s own analysis for the regional benchmarking rule shows that very few ACOs can individually impact their area’s cost curve with a median of 12 percent of the county. Every ACO can impact whether a person got better care in the ACO than they did out of it. A regional inflation update ensures that the work of the ACO impacts the ACO’s financial future instead of regional cost arbitrage. We disagree with CMS’s current view that having a higher hill to climb serves as motivation for the ACO in a high cost growth area to get even more savings. We believe that most ACO’s do all they can at any given moment and artificially raising the bar with inaccurate national updates is discouraging to ACOs not encouraging.

Updates Based on Assignable Beneficiaries

We support the proposed change to only include assignable beneficiaries in all calculations. This gets us closer to accurately measuring ACO value by comparing like beneficiaries to like beneficiaries.

Timing of Revised Rebasing and Updating Methodology

These updates should be made available to ACOs that started in 2012/2013. While we understand the complexities of rule making that appears retroactive, the ACOs that started in 2012/2013 are the pioneers of the MSSP. CMS should give them the option to enter a new 3-year contract at the start of 2017 that includes the regional benchmarking regulations that are finalized in this rule. It is only just that the pioneering ACOs be given the same opportunities as ACOs that came latter.

Risk Adjustment and Coding Intensity Adjustment

Because the same person cannot be both in the ACO and not in the ACO, risk adjustment is the most critical component of accurate measure of an ACO’s difference in difference value. While we understand CMS’s concern with coding intensity we continue to disagree that fear of the unknown justifies the obviously inaccurate comparisons and benchmarks created due to the artificial cap on continuously assigned beneficiaries. Any adjustments to coding intensity should reflect actual coding intensity and not perceived coding intensity. ACOs lack the mechanism of Medicare Advantage (MA) plans to submit codes independently. This will massively reduce coding intensity over what is done in MA because the primary tool is not available. Any residual coding intensity, if it is exists, should be accounted for by a measured adjustment not an arbitrary ceiling be it zero percent as in MSSP or even three percent as in Next Generation ACO. We therefore support the use of risk adjustment in regional benchmarking and encourage CMS to improve risk adjustment across the MSSP.

Adjusting Benchmarks for Changes in ACO Participant Composition

The benchmark must be reset using the same calculations and not proxies. ACOs live and die on single percentage points. If the proxy calculation is off by even a single percentage point an ACO could loss all their revenue if they dip below the MSR. Until CMS can clarify what the actual correlation of the proxy to current methodology is, no ACO can possibly support this change simply to alleviate the burden of calculation. CMS should not let expediency threaten the accuracy of the program.

In order for us to truly consider such a proxy, CMS would need to publish the findings of the modeling. CMS would also need to quantify the reduction in operational burden to CMS and the benefits to ACOs of that reduction.

Facilitating Transition to Performance-Based Risk

Regarding the proposal made, we agree with CMS that a transition year based on the original benchmark and one-sided risk would be beneficial to ACOs as they consider the move to two-sided risk. Only through the lenses of MACRA implementation do we see any difference between whether the transition year should be the 4th year of the first contract or the 1st year of the new, 4-year two-sided risk contract. Despite lack of details on APMs, we can foresee a situation were it would be beneficial for the transition year to be the first year of a new two-sided risk contract that could qualify as “more than nominal financial risk.” While no silver bullet (there is no single silver bullet) to moving ACOs to two-sided risk, it would be a step in the right direction as would floating risk adjustment, regional update factors and a new way of thinking about stop loss that we present below.

We would also like to take this opportunity to comment on why so few ACOs are moving to two-sided risk. Nearly everything about the future of risk in Medicare FFS hangs on the phrase “more than nominal financial risk.” One of the first questions we get is will your ACO qualify as an APM. Our answer is we are not sure. Current two-sided risk models expose primary care physicians to too much risk too quickly. As explained below, the stop loss happens after financial ruin for a physician led ACO rendering the provision nearly meaningless for a physician led ACO while serving as an effective financial safeguard for large hospital led ACOs. In addition, inflation and risk adjustment policies transfer to much “insurance” risk from Medicare to the ACO. In this paper, we make the case that the purpose of two-sided risk should be motivational for all ACOs and not be financially ruinous for any ACO. We believe this view of risk aligns perfectly with Congressional intent for “more than nominal financial risk.” Between the financial investments ACOs make in the work of population health and the 15% of Medicare revenues that represent our new, proposed stop-loss we believe it is clear that ACOs would be taking more than nominal financial risk under our proposal. We include a detailed proposal in Attachment A to our comments.

 

Attachment A: Framing the Purpose of Risk

There are two reasons for a payer like Medicare to desire that accountable care organizations participate in risk under a total cost of care models:

  • Recoupment of losses
  • Motivation

From the provider perspective there are only two reasons to participate in risk:

  • Only way to access the accountable care model
  • A greater financial reward if they achieve savings

In a voluntary program such as the MSSP, no ACO will remain in the program year over year if they are generating losses so the potential recoupment of losses is limited to at most two years. In addition to losses from of total cost of care, every unsuccessful ACO (one-sided or two-sided) experiences investment and opportunity costs. Estimates are all over the map, but at a minimum an ACO will be spending $500,000 a year. There is also the opportunity cost of seeing few patients to work on population health and participate in other initiatives. For example, ACO providers cannot achieve 2x in the Value Based Modifier and therefore potentially left a significant portion of their fee for service revenue behind. Therefore, we encourage CMS to view risk as a motivating factor to generating shared savings not as a mechanism to transfer money from providers to the CMS trust funds.

A focus on motivation raises a different set of questions that a focus on recoupment of losses. In recoupment of losses, it is simply a financial balance between greater shared savings rates and risk that must be fair to both sides. However, CMS must make this decision at the programmatic level while ACOs make the decision at an individual level and with their specific circumstances in mind. Essentially creating an adverse selection situation just like you have with individuals and the purchase of health insurance. With a focus on motivation, CMS goal is not financial balance, but rather how to get as many folks into two-sided risk as possible so they will be more motivated to achieve savings, and to reduce the number of unmotivated “ACO squatters” in non-performing one-sided risk models.

From the provider perspective, taking on the possibility of losses is taking a gamble. The providers will implement ACO best practices that should generate savings. They believe that if losses were to result instead it would be due to factors beyond their control. Hospital consolidation in their area drives up local health care inflation at three times the rate of national health care inflation as we saw in one of our ACOs. Or the benchmark year was a statistical fluke of a year for risk scoring and since risk scores can not rise they will always be fighting a headwind. Providers, rightly in our opinion, view losses as mostly beyond their control and savings as within their control. Because of this they focus on the worst case scenario. Like someone entering a casino only willing to loose $200, they want to know that the gamble won’t financially ruin them.

Yet in today’s MSSP program even the lowest stop loss of 5% losses in the first year of Track 2 could bring a physician led ACO and its providers to ruin in a single year. For example, let’s explore a 10,000 beneficiary ACO with a $10,000 benchmark or $100,000,000 in costs. The physicians in that ACO account for $4,000,000 of those costs. It is quite possible for those physicians to get a late start and generate a risk adjusted, regional adjusted savings of only 1% in the first year, but be hit with a 7% headwind due to the lack of risk adjustment and regional inflation. This ACO is now responsible 40% of $5,000,000 or $2,000,000. This is ½ of all the revenue they received in Medicare revenue. Practices are potentially out of business. The ACO is completely forgotten. This is a realistic scenario. Again the providers worry about the worst case scenario in year 3 when the stop loss is 10% and they have to pay $4,000,000 if they generate 10% losses wiping out their entire annual Medicare revenue despite having the top quality scores needed for the 40% shared losses rate. At the practice level an individual physician seeing 300 Medicare patients a year bringing in $120,000 from Medicare could individually owe Medicare under the ACO $60,000.

From a behavioral economics viewpoint, it is true that incentives and fear of losses can be motivating, but the literature indicates that excessive fear of losses actually reduces performance on complex tasks. Putting primary care physicians in a position of overwhelming losses also increases the probability that some small number of them will take excessive risks with patient care- stinting on sending a patient for needed emergency or acute care, or surgeries, and putting the public perception of the entire program and movement at risk.

You can see why an extra 10% in the shared savings rate is not enticing physician led ACOs to Track 2 in large numbers.

The Motivation Focus and Alternative Payment Models

Congress highlighted the motivation focus of risk with the phrase “more than nominal financial risk”. The risk needs to motivate, it needs to be enough to matter, it needs to be more than nominal, but more than nominal clearly does not translate into financial ruin.

We propose a new stop loss in MSSP that would make risk motivating for ACOs of all make ups while being financially ruinous to none. After all, what is more than nominal to one entity might be downright miniscule for another entity. To set one fixed dollar or fixed percentage of total cost of care standard for more than nominal financial risk for all entities is to give large organizations a pass on financial risk and to expose small organizations not to more than nominal financial risk, but massive financial risk. Rather than a stop loss of a percentage of total costs, we propose to replace a total cost of care stop loss with a stop loss on the amount an ACO will be liable to Medicare as a percentage of Medicare revenue received by the participants that make up the ACOs. MIPS can create a loss in Medicare revenue of 9% couple that with the 5% bonus for being in an APM and you have a MIPS risk of 14% of revenue. We propose a new stop loss set at 15% – 20% of the fee for service payments made by CMS to all of the participants in the ACO. This sets risk at levels that motivate a specific ACO rather than the current situation where a “fair” policy to recoup losses creates massive disparities in financial risk from ACO to ACO. In this new scenario, our individual physician is only having to write Medicare a stiff, but survivable $18,000 check. See Attachment 1 for a table breakdown where you can see physician-led ACOs are always at more risk than hospital-led ACOs, but this proposal levels the playing field.

 

Table of Proposed Stop Loss Provision

Best Case Scenario that Involves the Stop Loss

(6% losses in Year 1 Track 2 with a 5% Loss Rate)

Physician-Led ACO Individual Physician Hospital-Led ACO
Beneficiaries 10,000 300 10,000
Benchmark $10,000 $10,000 $10,000
Total Cost $100,000,000 $3,000,000 $100,000,000
Losses (6% ) $6,000,000 $180,000 $6,000,000
Current Best Case Total Cost of Care Stop Loss (5% – Year 1 Track 2) $5,000,000 $150,000 $5,000,000
Current Best Case Losses
(40% Shared Losses Rate)
$2,000,000 $60,000 $2,000,000
Proposed ACO Share Stop Loss
(15% of Medicare Revenue)
$600,000 $18,000 $9,000,000
Proposed Best Case Losses
(40% Shared Losses Rate)
$600,000 $18,000 $2,400,000
Medicare Revenue $4,000,000 $120,000 $60,000,000
Current % of Medicare Revenue Lost 50.00% 50.00% 3.33%
Proposed % of Medicare Revenue Lost 15.00% 15.00% 4.00%

 

 

 

Worst Case Scenario that Involves the Stop Loss in Track 2 –

(11% losses in Year 1 Track 2 with a 10% Stop Loss)

Physician-Led ACO Individual Physician Hospital-Led ACO
Beneficiaries 10,000 300 10,000
Benchmark $10,000 $10,000 $10,000
Total Cost $100,000,000 $3,000,000 $100,000,000
Losses (11% ) $11,000,000 $330,000 $11,000,000
Current Best Case Total Cost of Care Stop Loss (10% – Year 1 Track 2) $10,000,000 $300,000 $10,000,000
Current Best Case Losses
(40% Shared Losses Rate)
$4,000,000 $120,000 $4,000,000
Proposed ACO Share Stop Loss
(15% of Medicare Revenue)
$600,000 $18,000 $9,000,000
Proposed Best Case Losses
(40% Shared Losses Rate)
$600,000 $18,000 $4,400,000
Medicare Revenue $4,000,000 $120,000 $60,000,000
Current % of Medicare Revenue Lost 100.00% 100.00% 6.67%
Proposed % of Medicare Revenue Lost 15.00% 15.00% 7.33%

 

 

 

Attachment B: AJMC Article on ACO Value and Sustainability

Farzad Mostashari, Travis Broome

Accountable Care Organizations (ACOs) are the cornerstone of policymakers’ pledge to convert over half of all healthcare dollars to alternative payment models by 2018. The Centers for Medicaid and Medicare Services (CMS) has led the way by creating new models like the Medicare Shared Savings Program (MSSP) which rewards doctors for delivering better care and lowering the total cost of care (Disclosure: Aledade partners with primary care practices to create and operate ACOs). Under the MSSP, providers share in savings realized over a projected benchmark if they meet quality targets. A study byLeavitt Partners shows the number of Americans in ACOs currently at around 23 million will soar to over 100 million by 2020. But is “accountable care” merely a transitional pathway from totally unmanaged “Fee for Service” towards capitated payments and HMO-style managed care? Or will accountable care prove to be a third durable payment and delivery destination offering more choice than managed care and better value than fee for service, with softer incentives for both providers and patients.

I don’t believe that we know the answer to that question yet, and perhaps wisely, policymakers have been somewhat cagey about committing to one strategy or another. The Next Generation ACO program ingeniously created a pathway towards capitation or all-inclusive population-based payments as CMS refers to them, by allowing ACOs – with full immunity from what would normally be considered violations of anti-kickback regulations—to negotiate capitated Medicare payments to “affiliates” in essence using CMS as their claims administrator. Meanwhile, the Medicare Shared Savings Program (MSSP) also continues to evolve towards sustainability with continual improvements- none more significant than the recent proposed rule issued by CMS around how the “benchmark to beat” is to be calculated in the future. The comment period on this rule closes on March 28, and I assure you that this is no boring technical detail, it is in fact a fascinating example of the delicate balancing act of good policymaking that merits our attention and input.

The goal of good policy in a market economy is to align individual incentives with societal good. Successful policy creates an environment where public welfare is furthered not only by direct government action and grants, but also by private organizations acting in their own interests. In health care, the “volume to value” movement seeks to align the interests of healthcare providers with the societal triple aim of better care, better health and lower costs. But how should that “value” be measured and rewarded? How to establish the counterfactual “expected costs” as the benchmark for ACO doctors to beat?

The policy goal is to reward both improvement and attainment, without creating perverse incentives. If the ACOs started with a regional benchmark (“attainment”) then providers with higher than average benchmark have no incentive to participate, taking away the biggest societal gain, while providers who are already lower cost are paid more automatically without anything changing. So the program began by setting the first three-year contract’s benchmark by projecting forward from recent historical costs (“improvement”). Perhaps wisely, policymakers punted on the inherent and obvious flaw in this approach. The most common question asked by sophisticated investors and policy neophytes alike has been unanswered until now: “if the organization has to keep reducing costs below historical benchmark, won’t the returns dwindle to nothing? What happens in the long run?”

Continually resetting a purely historical benchmark gets harder and harder over time, and will lead the most successful ACOs to drop out of the program. Last year’s rules provided a temporizing stop-gap, replacing a “full ratchet” with a “partial ratchet” whereby the pace of adjustment was slowed but leaving the fundamental inexorable unsustainability unaddressed.

Regulators have struggled to strike a balance between maintaining incentives for private organizations to continue to seek profit in reducing cost, while also seeking to ensure that there continues to be value created for society and the taxpayer. In keeping with comments submitted by us and others, CMS is now proposing to gradually move away from a purely historical benchmark (beat your own past performance) to a regional benchmark (beat your neighbor’s performance). In this way, value created by ACOs is defined commonsensically as “did people in the ACO get better care than they would have if the ACO had not existed.”

We acknowledge that getting the transition right – from rewarding improvement to rewarding attainment– is devilishly difficult. Transition to a regional benchmark too fast, and ACOs that still have high costs will leave the program. Transition to a regional benchmark too slow, and ACOs with low costs will lose their financial viability. We support the proposed transition of 35 percent regional comparison in an ACO’s 2nd contract (years 4, 5, and 6) and 70 percent regional in its 3rd contract (years 7, 8, and 9).

But this is only part of the solution. With healthcare costs rising every year, the benchmark must also be projected forward. CMS currently uses national inflation for annual updates of the benchmark within a contract period, but this creates an imperfect view of the counterfactual (what would have occurred had the ACO not existed). Regional updates using county weighted, risk adjusted costs (as is done in Medicare Advantage) create more accurate benchmarks and therefore more accurate measure of ACO value. CMS is indeed proposing to switch to such regional inflation in future contracts but is adding complexity and reducing predictability by proposing to continue to use national inflation in the first contract (first three years). An ACO should be rewarded because a person in Dover, Delaware got better care in the ACO than a like population outside of the ACO. Regional updates do that, while national inflation updates dilute that difference.

The benchmark must also account for differences between people’s health in order to accurately compare one person’s costs to another. To be sure, this adjustment creates opportunities to shift money around in the health care system without creating value, a practice CMS calls “coding intensity” in the proposed rule. Currently, CMS using a blunt instrument to combat this practice. Simply put, they do not let risk scores to go up for the same population year over year. This is done without consideration of whether that population had a bad run of cancer or an unusually high number of unavoidable accidents. This prevents accurate comparison and therefore prevents accurate measurement of value. This transfer of insurance risk to ACOs is one of the biggest barriers to ACO sustainability over the long run, and increases the risk of providers dumping patients whose true risks are rising. People do in fact tend to get sicker over time, and pretending otherwise can only last so long.

2016 is shaping up to be the most pivotal year in health care policy in a long time, possibly the most pivotal year since 1965. CMS is actively listening and working with private sector partners to iterate and improve the alignment between what’s good for society, what’s good for patients, and what’s good for doctors entering these new payment models. All of us in health care, and particularly those of us who are population health, must make the most of every opportunity to inform the changes that will be happening this year, and will illuminate the path forward.

Since Aledade’s founding, we have been committed to partnering with Delaware primary care physicians to deliver high-quality, high-value patient care. As one of our first ACOs, the Aledade Delaware ACO has grown to include 26 leading primary care practices responsible for providing care to over 20,000 Medicare beneficiaries. While we have made much progress in bringing value-based care to Delaware, we are truly excited for the future of our Delaware ACO. Why? Our efforts are not alone as the state has expanded its efforts to help doctors and reaffirmed its commitment to being a national leader in health care innovation.

Their latest effort is a Practice Transformation Services Project to help all primary care practices across the state adopt value-based payment models and to improve population health. This effort is being led by Delaware Center for Health Innovation (DCHI), which is committed to guiding a new State Health Care Innovation Plan focused on the “Triple Aim”: improving the health of Delawareans, improving health care quality, and controlling health care costs. This new program is made possible by a State Innovation Model (SIM) grant from the Centers for Medicare and Medicaid Innovation.

Aledade has long supported the State’s health care innovation efforts – but we are most excited about participating in this new effort.

At the core of the Practice Transformation Services Project are 11 milestones related to care delivery transformation, payment reform, and population health management. Aledade worked closely with the State to inform the development of these milestones and they closely align with our company values.

DCHI selected four health care organizations to provide hands-on technical assistance to primary care practices to help them meet the 11 milestones. Aledade has partnered with one of these organizations, Remedy Healthcare Consulting, who will provide care management support services to Aledade ACO practices.

In cooperation with Aledade’s Delaware team, our partnership with Remedy Healthcare Consulting will provide another valuable layer of ACO practice support, including on-site and remote coaching and transformation educational opportunities. For patients, the partnership means primary care physicians delivering the benefits of value-based care, such as seamless coordinated care and a focus on keeping patients healthy. Specifically, the partnership will focus on ensuring sicker patients are receiving more proactive and timely care through a comprehensive care management and team-based approach.

We are confident that participation in DCHI’s Practice Transformation Services Project and work with Remedy Healthcare Consulting will continue to improve and enhance our Delaware ACO.