April 26, 2022
By Casey Korba, Director of Policy
In October 2021, Broome et al. described using the Medicare Shared Savings Program as a “chassis” for innovation. This chassis could test new innovations with only a fraction of the effort it takes to build a new model from the ground up and establish the MSSP infrastructure as the starting point for many providers, not a competitor to new Innovation Center models. To further demonstrate this idea, the Aledade policy team developed a series of four blogs describing how this would work for four innovations: primary care capitation, value-based insurance design, addressing inequity in health care, and incorporating desired elements from the Next Generation ACO Model.
Medicare needs a lever to encourage high-value care and address inequities
Transitioning from a volume-driven to a value-based health care system requires a change in both how we pay for care and how we engage patients in the care delivery process. Traditional Medicare has a one-size-fits-all approach that requires level cost-sharing without regard for value. Research demonstrates that increases in patient cost-sharing leads to decreases in both non-essential and essential care.
In this brief, we make the case for the Center for Medicare and Medicaid Innovation (CMMI) to test a model for value-based insurance design (VBID). The model would allow physicians to waive cost-sharing for high-risk Medicare beneficiaries attributed to Accountable Care Organizations (ACOs) in the Medicare Shared Savings program (MSSP) when patients are receiving high-value, recommended primary care services.
While the Centers for Medicare and Medicaid (CMS) has focused on aligning incentives for the physician and for the health care system as a whole to reduce costs and improve quality, this model would align beneficiary incentives as well. Primary care services that would be paid for by CMS instead of the ACO-attributed patient under this model are Evaluation and Management services received from the primary care physician, Transitional Care Management (TCM) services, Chronic Care Management services, and Advance Care Planning services. VBID for traditional Medicare has the potential to better serve patients, encourage high-value care, and incentivize physician practices to join MSSP.
The case for evolving VBID in Medicare
CMMI’s recent white paper on strategies for the next decade lays out five objectives that will guide their efforts to achieve equity through high-quality, affordable, person-centered care. One of the objectives involves VBID as a method to address health care prices, affordability, and reduce unnecessary care. The paper noted, “As cost pressures mount on individuals and families, CMS Innovation Center models will focus not only on reducing federal health expenditures, but also how they can help lower out-of-pocket costs for Medicare and Medicaid beneficiaries and maintain access to quality care.”
The paper went on to note that CMMI has also used and is exploring the use of other model design features and incentives to encourage high-value care. One example cited is the use of accountable care models with total cost of care approaches. Also, in traditional Medicare, participating providers were permitted to reduce or eliminate beneficiary co-pays for high-value care such as primary care services and certain other Part B services.
CMMI is already testing VBID in Medicare Advantage, allowing plans the flexibility to provide supplemental benefits for beneficiaries based on health conditions and/or socioeconomic factors. These benefits include reduced cost-sharing for high-value care, access to new and existing technologies and devices, vouchers for transportation for medical visits and over-the-counter medications, and items or services that have a reasonable expectation of improving or maintaining health.
Further, CMS allows some Next Generation ACOs to reduce or eliminate cost sharing amounts for certain Medicare Part B services for beneficiaries associated with a Next Generation ACO.
Incentives are aligned to provide high-value care
We are advocating for CMMI to prioritize testing models that allow VBID for primary care for ACOs participating in MSSP. MSSP is uniquely suited for VBID models. In an October 2021 Health Affairs paper, Aledade Senior Vice President for Policy and Economics Travis Broome et al. made the case for using MSSP as a foundation for innovative models.
The authors pointed out that MSSP offers very modest options to waive coinsurance in Part B and advocated for CMMI to explore a model that would allow for true VBID targeted at beneficiaries and for a variety of services and conditions. MSSP allays concerns about over or underutilization by not only holding participants accountable for cost but also requiring patient satisfaction surveys each year. There is no need to develop one-off quality measures and reporting, as participants already report quality. Not only would quality measures not have to be duplicated, but there is also a historical comparison measure of quality for evaluation.
ACOs participating in MSSP are designed to encourage engagement between physician and patient because the physician’s payment is based on patient outcomes. If patients don't follow their treatment plans or get recommended services, this can negatively impact shared savings. For many ACOs, its physician practices share in Medicare's cost savings when they meet ACO spending and quality targets. If they don’t, the ACO may end up having to return a portion of the over-spending to Medicare.
According to the Kaiser Family Foundation, half of all Medicare beneficiaries had incomes below $26,200 in 2016, while one-quarter had incomes below $15,250. Even a minimal amount of cost-sharing can cause people to delay or forego care. Primary care services are critical for patients, and it is essential to have a delivery system that encourages patients to obtain recommended primary care services and that allows for building a relationship between the patient and the primary care physician. Requiring co-pays or cost-sharing for recommended, evidence-based primary care services disincentivizes patients from getting these services.
VBID could also reduce unnecessary emergency department (ED) visits. These visits are not good for the patient or the primary care practice, and they drive up health care costs. Aledade ACO member physicians report that a barrier to patients choosing the office over the ED for non-emergent care can be an office bill that requires some payment before they will be seen. For seniors attributed to MSSP ACOs, the deductible and coinsurance are what accumulate. By waiving coinsurance for visits with the patient’s primary care provider, patients would be more likely to come to the office for a TCM or post-hospital visit. (TCMs are a proven modality for prevention of readmission.)
VBID helps meet health equity goals
Data shows that more than two-thirds of beneficiaries in traditional Medicare have multiple chronic conditions and health risks. The “skin in the game” or personal responsibility mantra in health care is outdated and merely serves to drive inequities, resulting in vulnerable communities often not getting the care they need.
Strengthening primary relationships in vulnerable populations is an important focus for Aledade that aligns with CMMI’s equity goals. Millions of Medicare beneficiaries have no accountable primary care relationship, yet we know that patients benefit when they have a strong connection to primary care. The patients without a relationship are the hardest to reach and more likely to fall into care after an acute event, one that often could have been prevented with proactive primary care.
Encouraging the creation of primary care relationships in vulnerable populations has the potential to proactively address primary care needs, decrease acute care, and decrease health disparities. If we apply VBID to primary care for vulnerable populations served by risk-taking ACOs, we are encouraging and aligning incentives for vulnerable populations to receive high-value care.
Getting to the how: Operational mechanisms for CMMI
The Annual Wellness Visit could serve as the trigger for enabling Medicare beneficiaries attributed to MSSP ACOs to have their cost-sharing for primary care services with their primary care physician office waived. CMS could develop a modifier on the claim. For beneficiaries with Medigap policies, the ACO would not include a modifier.
This model would be ideal for patients who are at risk for not scheduling primary care appointments because of their inability to pay cost-sharing. For primary care practices, a model such as this could serve as an incentive to join MSSP since they would be able to offer this benefit to high-risk patients.
We know that physician practices have work-arounds to absorb the cost of patients who cannot pay these fees. Typically practices make good-faith efforts to outreach to these patients, but in circumstances where it is clear the patient cannot pay, practices absorb these costs. This is not an ideal long-term solution for practices. It can lead to additional administrative burden and can alienate patients who are afraid to make an appointment because they owe the practice money.
Community Health Centers (CHCs) are able to offer sliding fee scales and can write off some of these fees. However, they too could benefit from having a more standardized solution such as the ability to waive cost-sharing for primary care services for high-risk patients.
We know that some patients, including patients served by CHCs, avoid primary care until their condition gets bad enough for them to seek care at the emergency department. By not waiving costs for vulnerable patients to get high-value primary care, the system is incentivizing them to seek care in the ED. A VBID model for traditional Medicare could potentially change the paradigm for low-income, vulnerable patients and drive more high-value care upstream.
Finally, experience with the Affordable Care Act’s preventive service provision has shown us that making the waiving of cost-sharing for preventive care too complicated and stringent results in confusion for patients. Cost-share waiving in this model should cover core primary care visits. While prescription medications or tests resulting from the primary care visit might still have cost-sharing, the core primary care visit to get a test or medication should be free for patients who are at risk for not paying cost-sharing and are attributed to ACOs participating in MSSP.