The effort could result in new approaches, such as introducing work requirements or participation fees in Medicaid or vouchers to purchase Medicare Advantage plans.


Sept. 26—The Centers for Medicare and Medicaid Services (CMS) last week released a Request for Information (RFI) signaling a willingness to further explore or even change the alternative payment models the Obama Administration had employed to reduce Medicare costs and improve quality of care and patient safety.

The CMS Innovation Center’s RFI sought “stakeholder input on the ideas included here, on additional ideas and concepts, and on the future direction of the Innovation Center. In particular, the Innovation Center is interested in testing models” that include increasing participation in advanced alternative payment models (APMs) and models focused on consumer-directed care and market-based innovation; physician specialty care; prescription drugs; Medicare Advantage innovation; and state-based and local innovation, including Medicaid-focused models mental and behavioral health and improving program integrity. The comment period ends Nov. 20.

David Muhlestein, chief research officer for the consulting firm, Leavitt Partners, said the RFI marks a new direction.

“The [new] system is focused on reducing costs and price and getting consumers more involved and engaged” Muhlestein said. “That could be as simple as letting consumers know what the prices are and that is quite different than the previous administration. They [the Trump Administration] continue to support APMs, but also look to the private sector outside of government to do things. The RFI offers a real opportunity for providers to offer feedback for something that works for them.”

What’s left unsaid is what happens if the voluntary model lowers costs and improves quality, Muhlestein said in an interview.

“Could it become mandatory if that works?” Muhlestein said. This could be really significant if they mandate payment models.”

The RFI likely will have little impact on accountable care organizations (ACOs).

“There’s no suggestion they’ll change ACOs, which are really are the best way for providers to get bonus payments and avoid MIPS,” Muhlestein said. “Over time there will be a need for good payment models for specialist providers, such as ER physicians. CMS will need to create new payment models.”

Deirdre Baggot, PhD, a principal at consulting firm ECG, said CMS is not backing away from APMs. She cited last week’s announcement that Acumen would receive the advanced pilot payment reconciliation contract as an indication of continued support for APMs.

“They would not have done that if they were moving away from bundles or ACOs,” Baggot said in an interview. “CMS is likely seeking public support for the things they want to do anyways, and an RFI gives them a little cover.”

The Trump administration is not moving away from APMs because the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires such models and remains in force.

“What they want to do is expand into areas that are more in line with the administration’s priorities – pushing more patients to Medicare Advantage,” Baggot said.

Baggot said recent statements from CMS Administrator Seema Verme “reflect a willingness to use waivers to enable innovation.  

New Approaches

While conceding that he lacks any specific knowledge of CMS’s intent, Barak Richman, professor of law and business administration at Duke University, said like all the other agencies, the U.S. Department of Health and Human Services (HHS) is tacking sharply away from Obama policies.

“And it shouldn’t be surprising that they haven’t inherited a commitment to APMs,” Richman said in emailed comments. “My sense is that things were still at an early stage, with lots of uncertainty on how the specific APMs would unfold.”

David Sayen, senior vice president of client relations for the Gorman Health Group, said the RFI sounded like a case of “Be careful what you wish for.”

When the Democrats introduced these APMs, Sayen said, they gave the HHS secretary broader authority to alter or introduce new elements without going to Congress.

“The early concern was that the administration would get rid of the CMS Innovation Center,” Sayen said. “But in this RFI, it seems the Republicans will use this opportunity to do some things Democrats hate, such as introducing work requirements or participation fees in Medicaid or vouchers to purchase Medicare Advantage plans.

CMS also might—under the guise of patient choice—allow physicians to charge Medicare more.

 “Rather than getting rid of the Innovation Center, they may use it to test conservative ideas,” Sayen said.

Clif Gaus, president and CEO of the National Association of Accountable Care Organizations, said he was surprised the RFI focused on both population health models and ACOs.

“We would have liked to have seen those as separate focus areas,” Gaus said. “But we do see ourselves as a big part of advanced payment model section. We believe a greater focus needs to be put on innovations within the ACO model. We don’t have all the answers and we do need more research and innovation.”

The RFI follows a recent HHS’s Office of the Inspector General (OIG) finding of big savings from ACO models over the first three years of the program, 2013-2015. In the first three years of the program, 428 ACOs served 9.7 million beneficiaries and saved around $1 billion. In 2015, ACOs served 7.3 million Medicare beneficiaries (19 percent), up from 3.7 million in 2013.

“Most ACOs were able to reduce Medicare spending over the first three years of the program,” the report said.

Two-thirds of all ACOs (282 of 428) achieving savings. ACOs that were in the program longer were more likely to reduce spending and by greater amounts.

The OIG also found that on average, ACOs performed better than fee-for-service providers on most (81 percent) of individual quality measures.

Gaus said the OIG study found ACOs achieved greater savings than expected, although CMS did not subtract the bonuses it had paid to those ACOs when calculating the savings. Even when net the CMS payments, Gaus viewed the latest finding of ACO savings as “an encouraging sign.”

No APM Pullback

François de Brantes, vice president and director of the Center for Payment Innovation for Altarum, sees the RFI as “a welcome shift in direction.”

He said there was a fundamental concern the new administration would pull back from APMs.

“This RFI puts that to rest and says CMS will continue down the road, but with more focus on physicians as quarterbacks of healthcare episodes,” de Brantes said in an interview. “It doesn’t say when or what, but shows a very clear direction. It does portend a different competitive environment.”


Mark Taylor is a freelance writer based in Chicago. 

Publication Date: Tuesday, September 26, 2017