Health Plan Payment and Reimbursement

Pilot to Offer APM Bonuses to Physicians in Medicare Advantage

July 3, 2018 5:48 pm

Existing MA value-based payment arrangements have been found to reduce emergency department use and hospital admissions.

July 3—Medicare plans to launch a pilot—as soon as this year—to allow physicians paid through Medicare Advantage (MA) value-based arrangements to qualify for the same bonuses as those working in advanced alternative payment models (APMs).

Physicians’ advocates have long raised concerns that clinicians working in locales with large shares of MA plan enrollees would miss out on the 5 percent annual bonuses that Medicare offers clinicians who serve a sufficient share of beneficiaries in designated APMs. Enrollment in APMs, which were authorized by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), is offered only to fee-for-service (FFS) Medicare beneficiaries. The share of Medicare enrollees covered by MA plans reached 33 percent in 2017, according to a Kaiser Family Foundation report.

The Centers for Medicare & Medicaid Services (CMS) revealed the new pilot for MA APMs, called the Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) demonstration, as part of a noticeseeking input on the data collection that would be required under the pilot. The notice specified that the pilot would last at least five years—into 2024.

The 2017 final MACRA rule had promised the MA APM pilot “before 2019,” which was an acceleration of the Obama administration’s plans for physicians in MA to qualify for such payment starting in the 2021 payment adjustment year.

“The MAQI demonstration aligns with the agency’s goal of moving to a value-based healthcare system, and aims to put Medicare Advantage on a more equal playing field with Fee-for-Service Medicare,” CMS Administrator Seema Verma said in a release.

Physicians in the MAQI pilot will avoid the possibility of annual Medicare payment cuts of up to 9 percent under MACRA’s Merit-based Incentive Payment System (MIPS).

“CMS intends to test whether MIPS exemptions provided to clinicians under MAQI will increase participation in Medicare Advantage plans that are similar to advanced APMs, and thereby accelerate the transition to a healthcare system that pays for value and outcomes,” Verma said.

The accelerated pilot drew praise from health plan and provider advocates.

“Our physician organization members are leaders in the movement from volume to value, and today’s announcement creates an important new path for groups wishing to move into value,” Donald H. Crane, president and CEO, America’s Physician Groups, said in a written statement.

The American Hospital Association has been urging CMS to allow physicians paid by MA plans to qualify for MACRA APM bonuses since it wrote a 2015 letter to the agency.

In a 2017 letterto CMS, America’s Health Insurance Plans (AHIP) also urged that physicians in MA plans’ value arrangements be eligible to receive APM bonuses under MACRA.

“Value-based agreements are an important strategy used by MA plans to improve health care for Medicare beneficiaries,” AHIP wrote. “These agreements are designed to ensure that patients receive the greatest possible value for every dollar spent on their care. Through them, doctors, health care institutions, and health insurance providers come together to focus on one goal: helping the patient achieve their best health for the long term.”

The recent notice came after CMS opened a module in May for MA plans to request advanced APM status for certain provider contracts. The process aimed to determine which MA arrangements qualify as “other-payer” advanced APMs under MACRA.

A reportfrom Milliman noted that MA plans have significant flexibility in structuring provider contracts, benefits plans, and provider networks.

“These contracts utilize FFS reimbursement, risk-sharing contracts (both upside-only and two-sided models), or global capitation arrangements,” the report noted. “While there is continued movement towards risk-based contracts and capitation, MA contracts are largely based on FFS reimbursement, and in particular, a percentage of Medicare FFS reimbursement.”

Only 100,000 physicians applied for the advanced APM bonus in the first year it was available through MACRA, a CMS executive recently said in an address to providers. Expanding qualifying APMs to include MA plans’ value models was expected to sharply increase the number of physicians moving out of MIPS and into APMs—a common goal across the federal government.

Research Support

The benefits of MA value-based initiatives have been chronicled by researchers, including a studyin the February 2017 issue of the American Journal of Managed Care.

That study found that such MA initiatives have increased the use of preventive healthcare services, increased physician office visits, reduced both emergency department visits and inpatient hospital admissions, and increased the life span for MA enrollees.

Benefits for Medicare enrollees who received care from providers in MA value-based agreements included:

  • Almost a three times greater likelihood of having preventive care visits
  • 28 percent higher rates of screening mammography among women under 75
  • 11.2 percent reduction in emergency department visits
  • 11.9 percent reduction in inpatient hospital admissions
  • 6 percent increase in the overall survival rate

Other Changes

The MA pilot will precede the planned 2019 launch of MACRA’s all-payer combination option, which will allow clinicians to be eligible for the 5 percent APM bonus if they see patients in both Medicare and qualifying payment models offered by Medicaid managed care plans or MA plans.

In subsequent years, that option will be extended to clinicians in qualifying models offered by commercial health plans. CMS expects to announce which plans and models qualify later this summer.

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


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