Could a potential glut of payment models complicate the incentive structures for employed physicians within a health system?


April 18—Some healthcare policy advisers are warning against a proliferation of smaller payment models focused on physicians.

The pushback comes as the Physician-Focused Payment Model Technical Advisory Committee (PTAC) begins its efforts to increase the number of advanced alternative payment models (APMs) focused on physicians. PTAC was established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to recommend new APMs to the secretary of the U.S. Department of Health and Human Services (HHS).

For the 2017 performance year, HHS has approved only six APMs under MACRA: the Comprehensive End-Stage Renal Disease Care Model, Medicare Shared Savings Program Track 2 and Track 3, the Next Generation ACO model, Comprehensive Primary Care Plus, and the Oncology Care Model’s two-sided risk arrangement.

Under MACRA, physicians have a large financial incentive—a 5 percent bonus annually over five years—to move into an APM instead of staying in the Merit-based Incentive Payment System (MIPS). Despite those benefits, most physicians are expected to initially default into MIPS—which requires extensive quality reporting and carries a risk of cuts of up to 9 percent of annual Medicare pay—because not enough qualifying APMs are available.

The Centers for Medicare & Medicaid Services (CMS) is putting together additional proposals for APMs, including an all-payer model, according to Kate Goodrich, MD, director of the Center for Clinical Standards and Quality at CMS.

And the 11-member PTAC’s efforts include its recent approval of two physician-focused APMs.

On April 10, PTAC approved Project Sonar, an "intensive medical home model" targeting patients with inflammatory bowel disease. Announced a day later was PTAC’s approval of the ACS-Brandeis Advanced APM, a model proposed by the American College of Surgeons to place providers at risk for a set of episodes that represent their core healthcare services.

Supporters noted that the ACS-Brandeis APM can accommodate any condition, illness, injury, treatment, and procedure for which there is enough frequency to warrant inclusion.

HHS Secretary Tom Price, MD, attended a PTAC meeting last week and said, according to reports, “There is no one-size-fits-all payment model, and we need physicians to submit proposals for models that will work for them, in their practices, with their patients.”

The recommended models are two of six APM proposals submitted so far to PTAC. Letters of intent indicate another 16 proposals are coming.

Proliferation Concerns

But some worry that the APMs under consideration are too narrowly focused.  

Robert Berenson, MD, a member of PTAC, described some of the models in the letters of intent as “micro” models and joked that one was focused specifically on “left arm hang.”

Among the challenges of such a narrowly focused model is how to “scale it up nationally and allow CMS and its contractors to manage it,” Berenson said April 18 at a Health Affairs forum in Washington, D.C.

Margaret O’Kane, founder and president of the National Committee for Quality Assurance, criticized the movement toward APMs that are focused on relatively narrow specialties or conditions.

“That really will take us into a terrible place,” O’Kane said.

O’Kane noted that MACRA designed MIPS to be “purgatory” as an incentive for physicians to join an APM, which many physicians were expected to eventually do.

Hundreds of APMs

One questioner asked an expert panel at the forum whether HHS is headed toward eventually approving hundreds or thousands of APMs.

“It raises questions about whether you’re headed back to fragmentation,” after trying to move away from fragmented fee-for-service payment, said Mark Miller, PhD, executive director of the Medicare Payment Advisory Commission.

Miller noted that the proliferation of payment models could complicate both the ability of CMS to assess performance and the incentive structures for employed physicians within a health system.

In implementing MACRA, CMS has learned that “clinicians do feel strongly about being measured on the kind of care that they provide,” Goodrich said. She used the example of an electrophysiologist who was measured based on outcomes among his patients who underwent pacemaker implantations.

Policy advisers noted that PTAC was established to give such specialists a way to qualify for APM-based bonuses under Medicare.

Berenson advocated that CMS reserve APMs for broad approaches instead of approving models that are effectively medical homes for various specialties.

He hailed PTAC’s ability to launch limited-scale testing of new coding options in a small number of practices and said those could provide some of the payment incentives sought by creators of narrowly focused proposed APMs.


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

Publication Date: Tuesday, April 18, 2017