Medicare Payment and Reimbursement

CMS to add COVID-19-related waivers to value-based payment models, Verma says

October 14, 2020 2:08 pm
  • Medicare hopes to persuade providers to join future models that will have more downside risk by including pandemic-era waivers.
  • CMS is planning a new mandatory bundled payment model.
  • Nationwide expansion of the Home Health Value-Based Purchasing model is under consideration.

Medicare is looking to add pandemic-era waivers to its value-based payment (VBP) models as a way to spur increased provider participation, CMS Administrator Seema Verma said.

Verma said the ongoing revamp of CMS’s 54 VBP models to increase downside risk also could incorporate some of the more than 100 waivers that Medicare has given providers during the pandemic.

“A lot of what we did during COVID could potentially be moved to the value-based care models and provide more flexibility to providers,” Verma said Oct. 13 during an online healthcare innovation meeting. “That may encourage participation.”

Verma cited the changes the Trump administration has made to the main Medicare accountable care organization (ACO) program as a model for upcoming changes. Those revisions, which went into effect in July 2019, included requirements for all participants to move into two-sided risk within the first two years of their five-year agreements.

“It’s very important for providers to have skin in the game,” Verma said. “Just having upside risk doesn’t really produce the kinds of savings and quality measures that we want to see.”

The addition of incentives such as waivers may be needed because although 206 ACOs signed up for the revamped model, 40% of those previously in the program opted out, according to CMS data.

“They were set up to encourage participation,” Verma said about earlier versions of VBP programs. “They weren’t set up to garner savings or to produce necessarily better outcomes for patients.”

Earlier VBP models, in which upside-only risk was predominant, brought “a very poor return on investment,” she said. Specifically, only five CMS models have produced “statistically significant savings,” and only three of those have been expanded nationally. Additionally, only “a handful have seen significant improvements on quality metrics,” she said.

In contrast, early results from the revamped ACO approach showed “significant savings and increases in quality,” Verma said. The ACO program provided nearly $1.2 billion in savings in 2019, which was the largest amount since its inception.

Brad Smith, director of Center for Medicare and Medicaid Innovation (CMMI), said that among the existing models under consideration for nationwide expansion is the Home Health Value-Based Purchasing model.

CMS aims to expand downside risk in Medicare through the 2021 launch of the Direct Contracting (DC) model for primary care providers. More than 50 organizations have told CMS they want to join, Verma said at a separate Oct. 13 event.

More VBP changes are likely

Coming models include a variation of the DC model “in which a set of entities will take on full risk for all eligible Medicare beneficiaries in a certain geographic region,” Verma said.

Another DC option under consideration would focus solely on providers caring for patients who are dually eligible for Medicare and Medicaid. Such patients tend to drive the largest amounts of per-enrollee spending within the programs.

“While the idea is still exploratory, we see the tremendous potential in something along these lines,” Verma said.

A mandatory bundled payment model under development would “address the adverse selection we’ve seen in prior bundle models,” Smith said.

The overhaul of existing models produced by CMMI will include several elements:

  • Reducing prospective benchmarks to obtain more savings for the program
  • Expediting the release of data to participating providers
  • Launching more mandatory models
  • Increasing multi-payer alignment

An emphasis on expedited data release is part of the Data at the Point of Care program, which allows providers to request digital claims data for inpatient, outpatient and pharmacy claims for diagnoses, procedures, preventive services and medications.

Telehealth will be prioritized

Verma said the administration is pushing Congress to provide expanded statutory authority for more use of telehealth.

“The president’s made it very clear that he thinks that telehealth should be a permanent benefit in the Medicare program,” Verma said.

CMS used authority under the public health emergency to issue a range of waivers that expanded the use of telehealth beyond rural settings and for short visits. The agency aims to make as many waivers permanent as laws permit.

“With our own pen, with our own regulatory flexibility, we’ve expanded telehealth to over 130 services; different providers are being able to offer it; and we’re going through our regulations to get rid of those requirements around face-to-face visits,” Verma said.

Verma said even as more people are returning to in-person care, patients continue to use telehealth at high rates, especially for mental health services.

She noted that continuation of telehealth eligibility also is important to rural communities, where the technology provides access to specialists.

“It’s never going to replace in-person care, but it’s certainly a tool for our providers,” Verma said. “And [it’s] giving them the flexibility to decide when telehealth is appropriate for their patients.”


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