There are several steps that CMS could take to quickly provide APM options for physicians who participate in MACRA, hospital advocates say.


Nov. 27—Physicians are running out of time to benefit from participation in advanced alternative payment models (APMs), and hospitals are starting to wonder when promised options will emerge.

Hospitals had expected new APM options to emerge by now that would allow physicians paid through Medicare to garner 5 percent annual bonuses and avoid complex quality-reporting requirements and potential penalties of up to 9 percent of Medicare revenue. The payment changes are part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which split Medicare physicians into either the APM or the Merit-based Incentive Payment System (MIPS) track.

Physicians who don’t qualify for an APM will default into MIPS, where they face quality-reporting requirements and potential payment cuts. But few APM options are available for most physicians, which is one reason that the Centers for Medicare & Medicaid Services (CMS) has repeatedly extended MACRA enforcement waivers for most physicians

In the CY18 MACRA final rule, CMS estimated that as few as 10 percent of eligible clinicians will qualify for the APM track in 2018.

One the most highly anticipated APMs was a successor to the Bundled Payments for Care Improvement (BPCI) initiative, which is scheduled to end in December 2017. CMS promised that a successor BPCI would launch in 2018, but no such model has been proposed. 

“As we approach CY18, this new model is not yet available to clinicians, and CMS has not released a timeline for its development,” Charles Kahn, president and CEO of the Federation of American Hospitals (FAH), said in a recent letter to CMS.

Kahn noted that the more than 1,200 participating organizations in BPCI were awaiting word on the successor program, which “will require substantial lead time to do the advance work” needed to successfully participate.

Beyond the BPCI successor program, hospitals have noted a dearth of other new APM options. The U.S. Department of Health and Human Services (HHS) rejected two APMs recommended by the Physician-Focused Payment Model Technical Advisory Committee (PTAC), which was created by MACRA to suggest such models, and has requested more information on a third model. HHS has yet to suggest any new models on its own.

The 5 percent bonus for physicians in APMs lasts only six years—starting with the 2017 performance year—meaning physicians already have lost one year of incentive to join such models. Increasing participation in APMs is a major goal of CMS.

At this late point in the year, physicians are likely to lose the chance at an APM bonus next year as well, “as it is highly unlikely participants could apply, be approved, and start prior to July 3, 2018,” which is the deadline to be eligible for the bonus, Blair Childs, senior vice president of public affairs for Premier, a hospital advisory firm, wrote to CMS.

If the lack of APMs leads physicians to remain in MIPS, the “net result will be that Medicare’s movement from volume to value will be considerably slower and much less robust than CMS desires for its beneficiaries,” Kahn wrote.

Ways Forward

Among the quick steps that CMS could take to mitigate the dearth of APMs is extending the current BPCI program, Childs said. That would ensure there is no gap between the expiring bundled payments program and its successor, the latter of which will be designated as a qualifying APM under MACRA.

Another option to quickly increase APM access is expanding the Value-Based Insurance Design (VBID) model. VBID, which CMS is testing in Medicare Advantage (MA) plans in seven states this year, uses cost-sharing incentives to guide patients towards the highest-value care. CMS could allow MA plans in all states to voluntarily join the model, Tom Nickels, executive vice president for the American Hospital Association (AHA), said in a letter to CMS.

After AHA wrote to CMS, the agency announced an expansion of the MA VBID model to 25 states in 2019, up from 10 in 2018. The agency also plans to tweak the model to permit participation of chronic condition special-needs plans and to allow payers to identify enrollees with different chronic illnesses than those previously covered in the model.

The single biggest factor that restricts access to APMs is CMS’s policy of allowing only APMs with downside financial risk to qualify for the advanced APM track, according to Nickels. AHA and other hospital advocates urged CMS to expand its definition of financial risk to include the investment risk borne by providers that participate in APMs and to develop a method to capture and quantify such risk.

For example, an AHA analysis estimated that start-up costs were $11.6 million for a small accountable care organization (ACO) and $26.1 million for a medium-sized ACO.

If CMS maintains the current downside-risk requirements, AHA urged it to include BPCI models 2, 3, and 4, which entail downside risk but do not meet the quality measurement and electronic health record (EHR) use criteria for MACRA APMs.

Future APMs

Hospital advocates identified a range of new APMs that CMS could create to increase the available options for physicians.

For instance, AHA urged CMS to test new models that support advanced illness management. The Coalition to Transform Advanced Care presented a model to PTAC that brings curative and palliative care providers together in an interdisciplinary approach to address the fragmented care for patients with serious health issues.

“This innovative approach would enable insight on interventions specifically designed to offer coordinated care to improve quality for a highly vulnerable population,” Nickels wrote.

America’s Essential Hospitals, which represents safety net hospitals, wrote a letter to CMS in which it urged the agency to look beyond physician specialty models and consider incorporating models targeted at hospitals that treat high numbers of patient with complex or chronic medical conditions.

“Essential hospitals specialize in treating medically complex patients, and are an important part of the coordinated, comprehensive care these patients receive,” the association wrote.

Kahn urged the creation of post-acute care (PAC) bundled payment models with greater PAC provider “payment flexibility” that incents more efficiencies and better care coordination with acute care hospitals, which face the financial risk under current models. The ability of acute care hospitals to reduce PAC spending is limited to encouraging patients to get post-acute care in lower-cost Medicare payment settings or encouraging PAC providers to use efficiencies to reduce costs, he wrote.


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

Publication Date: Monday, November 27, 2017