It’s unlikely implementation of the new models will be slowed or reversed without congressional action.


Oct. 4—The Obama administration’s surprisingly aggressive late-term push to expand mandatory payment model pilots in Medicare has drawn growing pushback from providers and Republican members of Congress. But such calls to slow things down will likely go unheeded.

Advocates for hospitals and other providers waved the caution flag recently on the accelerating push by the Centers for Medicare & Medicaid Services (CMS) to move thousands of providers into mandatory payment models.

“[W]e urge CMS, in the strongest possible terms, to refrain from expanding mandatory bundled payment models to other geographic areas or conditions before there has been enough time to assess the lessons learned under the existing models,” the American Hospital Association (AHA) wrote in a Sept. 30 comment letter on a new mandatory payment bundle.

Among AHA’s concerns was that CMS’s proposal for a new mandatory bundle covering heart attack or bypass surgery and for an expansion of the Comprehensive Care for Joint Replacement (CJR) model to include surgical hip and femur fracture treatment came only four months after CJR became the first mandatory model to launch.

Specifically, AHA sought simplification of the cardiac bundle and a halting of the CJR expansion plans.

The move to mandatory payment models came as part of the push by the U.S. Department of Health and Human Services (HHS) to increase the share of Medicare provider payments that are in alternative payment models (APMs) to 30 percent by the end of 2016. After meeting that goal earlier this year, HHS officials said they expected to quickly meet the 2018 goal of 50 percent.

AHA’s concerns about mandatory models were echoed by the Federation of American Hospitals (FAH), which urged delay of the new payment bundles until at least Jan. 1, 2018. CMS had proposed starting the new models by July 2017.

“The FAH and its members, however, have become increasingly concerned about the pace of change proposed by CMS and the unreasonable expectations and burden that such rapid and multiple changes in the delivery system and related payment structure place on hospitals and their work forces,” Chip Kahn, president and CEO of FAH, wrote in an Oct. 3 letter.

The provider concerns followed growing objections from some members of Congress. A total of 178 House Republicans along with one Democrat said CMS’s Center for Medicare and Medicaid Innovation (CMMI) overstepped its authority when it required large numbers of providers to participate in large pilots of mandatory payment models.

 “Accordingly, we insist that CMMI stop experimenting with Americans’ health and cease all current and future planned mandatory initiatives within the CMMI,” the lawmakers said in a Sept. 29 letter to CMS.

Expected Results

But pushback from providers or Republican members of Congress is unlikely to get the Obama administration to slow or stop its use of mandatory Medicare payment models, according to a former Medicare leader.

Gail Wilensky, who led the precursor agency to CMS for President George H.W. Bush, said in an interview that CMMI appears to have the authority to institute the massive mandatory payment model pilots under the Affordable Care Act (ACA). However, attempts to expand pilot models are likely to face legal challenges—as they have in the past.

Douglas Holtz-Eakin, a chief economist with the President’s Council of Economic Advisers under President George W. Bush, agreed that the mandatory models from CMMI fall within the statutory authority provided by the ACA.

“I have some reservations about all of this, but Congress did this,” Holtz-Eakin said in an interview, referring to passage of the ACA. “So this isn’t a matter of overreach—this is doing what [CMMI was] told to do.”

However, given that the mandatory models are stoking growing concerns—even quiet misgivings among congressional Democrats—it’s possible Congress could include a statutory limitation on the models in an end-of-the-year, must-pass spending bill, Holtz-Eakin said.

“There are ways to slow down and stop everything these guys are doing,” Holtz-Eakin said about CMMI. “Whether they have enough votes to do that, I honestly don’t know, but I’m sure it will come up.”

Still, providers that fall under the mandatory models would be wise to assume they will continue and to begin needed preparations, policy experts said.

“Hope for the best outcome but assume they will move forward,” said Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA, which urged delaying the proposed mandatory cardiac model and identified a range of needed changes in a recent letter to CMS.

Concerns Identified

Among the mandatory models most likely to stoke a legislative response is CMMI’s Medicare Part B drug payment demonstration, which would reduce Medicare payments for 75 percent of physicians paid under the program.

“That’s something that Congress views as their job and not some agency’s job,” Holtz-Eakin said, referring to Medicare’s physician payment policies.

Legislation to prevent the HHS secretary from implementing the Part B drug payment model would cost $395 million over 10 years, according to a recent estimate from the Congressional Budget Office.

The future of CMMI largely depends on the outcome of the presidential election, with Hillary Clinton expected to continue the use of mandatory bundles and Donald Trump likely to eliminate CMMI and again leave it to Congress to authorize Medicare payment changes.

If the models move forward, Wilensky warned that “the sheer number and proliferation of the pilot projects” could cloud the outcomes due to their overlapping effects. The mandatory models also could come up short, Wilensky said, based on her previous experience administering pilot models, because participants will know not all of the models will become permanent, and the uncertainty will provide the excuse for some not to change how they deliver care.

Wilensky has urged an “assessment” in the spring of findings thus far from payment and delivery pilots and then using those insights to implement a broad-based payment policy—“rather than keep doing these pilots, because they are beginning to step on their own toes,” Wilensky said.

Unfortunately, Wilensky said, publicly available data on Medicare payment models under CMMI have provided “not much [direction] in a consistent or significant way” on how to change Medicare payment policy.

“We’re learning mostly about what doesn’t work,” she said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, October 04, 2016