The 5 percent Medicare bonus payment for physicians in qualifying APMs could total between $10 million and $20 million annually for large health systems, one system leader says.


May 2—With Medicare’s new physician payment system having launched this year, health systems are initiating multiyear efforts to push many of their employed and affiliated physicians into advanced alternative payment models (APMs).

Although the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) determines only Medicare Part B payment, hospitals and health systems will be affected through their employed and affiliated physicians. So those organizations are working to help their physicians succeed under the payment system, which will mean moving as quickly as possible to advanced APMs.

Initially, 90 percent of physicians are expected to not meet the criteria for qualifying APM participation and instead to default into the Merit-based Incentive Payment System (MIPS), which will expose them to potential penalties of as much as 9 percent of their Medicare pay in coming years.

Mirroring the national numbers, an estimated 10 percent to 15 percent of employed and affiliated physicians in the Ascension Health network were expected to initially qualify for an APM in 2017, said Jordan Asher, MD, chief clinical officer at Ascension Care Management. Most of those physicians qualified through the system’s Medicare Shared Savings Program (MSSP) Track 3 accountable care organization (ACO).

The system is in the final stages of deciding how to expand that share—either through the MSSP’s new Track 1+ ACO or through Track 3.

This focus is common among health systems.

“We’re looking at how we move out of MIPS into APMs and what are the competencies that we need to do that and support our clinicians,” said Valinda Rutledge, a vice president with the Greenville Health System.

That organization also is looking to move many of its physicians—60 percent of whom are employed—from MSSP Track 1 to Track 1+ or Track 3, both of which would qualify as APMs in MACRA. The 5 percent APM bonus can total between $10 million and $20 million for large health systems, she said.

“So it’s nothing to sneeze at,” Rutledge said during a presentation at the World Health Care Congress.

Ascension’s drive to shift physicians into APMs also is fueled by its membership in the Health Care Transformation Task Force, a health plan and provider consortium that has committed to shifting at least 75 percent of members’ operations to value-based payment arrangements focused on the Triple Aim by January 2020.

“We are really looking at how do we think about care holistically, meaning how do we wrap around everything that we have to do to truly deliver on value for those we are serving,” Asher said in an interview.

Not all organizations are ready to jump into APMs.

Crystal Run Healthcare, a New York medical group practice, decided to start in the MIPS track after the organization was unable to achieve MSSP Track 1 savings due to large shares of newly attributed patients.

“That taught us that it is very difficult for a rapidly growing practice to succeed under current Medicare rules,” said Scott Hines, MD, chief quality officer and medical director.

While in MIPS, the practice plans to strive to earn MSSP Track 1 savings payments and possible MIPS bonuses of up to 9 percent of its physicians’ Part B payment. However, the practice is committed to value-based payment and hopes to move toward APMs in the future while also lobbying for MSSP ACO regulatory changes to ease the provider burden.

MACRA Actions

Kavita Patel, MD, a former White House healthcare advisor, said most clinicians and C-suite leaders “have no idea how they are performing on even internal benchmarks, much less national benchmarks—[because] they need to focus on today.”

Entities that have experience with MSSP ACOs have some data that can give insights on patterns of care, “but many don’t seem to be using that,” Patel said.

Patel said hospital and practice leaders need to push leadership teams and clinical teams to tell them how far along their organization is in the transition to value-based payments.

The new Medicare payment system is driving health systems to undertake basic due diligence that they have never done. At Ascension, that includes figuring out which specialists are operating under which tax ID number. MIPS allows clinicians to choose to be rated either on an individual basis or as a group billing through a common tax ID.

“It’s really forced us to look at the physics of our business a lot better, and the physics of our care,” Asher said.

Greenville is using MACRA as a tool to create an organization-wide risk strategy that will help it move out of fee-for-service payment. First steps included determining core-competency areas where the organization could best accept risk, and modeling its needs—including care coordination, a good post-acute care network, and cost management capabilities.

“It’s a journey, so figure out where you are at in the journey and when it is appropriate for you to take that risk,” Rutledge said.

New Directions

Lindsey Dunn Burgstahler, a director for the American Hospital Association, said one challenge of MACRA is that organizations have to establish a strategic direction without precisely knowing their areas of strength.

Angelo Sinopoli, MD, executive vice president for Greenville, said provider organizations need to develop a MACRA glide path, which starts with assessing where they are today, what their capabilities are, and where they are weak. Choices regarding APM participation will vary from market to market based on capabilities and infrastructure.

Adam Myers, MD, CMO for Texas Health Physicians Group, advised organizations to avoid MACRA planning with a specific APM in mind and instead focus on improving care transitions.

“Health care is a lot like a relay race,” Myers said. “If you would iron those transitions out, you would be much better prepared to take on things like APMs and then advanced APMs.”

Sinopoli said his organization’s focus on improving care transitions made clear that it had inadequate data, training, and care models. So his employer created a separate entity, called the Care Coordination Institute, to focus on data collection and develop clinical care models and guidelines. The entity also serves providers outside the Greenville system—an approach that has helped fund its operations—offering monthly report cards for 7,500 South Carolina and Georgia physicians, for example. 

For provider organizations looking to get into bundles, Myers noted that some of the most effective conveners of bundles have been independent practices—such as orthopedic practices, to which his organization has looked for insights.


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

Publication Date: Tuesday, May 02, 2017