Payment Models

Creating APMs for Specialty Care: A Provider-Led Initiative for Delivering Value

April 25, 2018 3:18 pm

The experiences of the Chicago-based Large Urology Group Practice Association provide insights into key success factors for any specialty group seeking to develop and/or participate in an advanced alternative payment model designed to promote value-based care.

As the Centers for Medicare & Medicaid Services (CMS) moves to encourage increased participation in advanced alternative payment models (APMs) under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the importance of developing APMs for a broad range of specialties is critical.

Currently, there are just seven advanced APMs, including APMs for cardiology, oncology, and joint replacement. Without increased development of advanced APMs, some specialties have little opportunity to participate. Here, we discuss the development of an APM for urology, to provide insight into the broader considerations involved with creating an advanced APM for a specialty.

Case Example: Urology APM

Because no episode-based advanced APMs specific to urology exist, few urologists (less than 1 percent) participated in advanced APMs in 2017. Given that physicians who participate in advanced APMs, rather than the Merit-based Incentive Payment System (MIPS) track of MACRA, could earn up to a 5 percent bonus by taking on financial risk, this level of nonparticipation potentially puts urologists at a fiscal disadvantage with respect to other specialties. The lack of value-based payment options for urologists hampers urology practices’ ability to move away from fee-for-service payment paradigms.

In an era of transformative change in health care, adopting a more value-based approach to payment is critical to urology practices’ long-term survival and success. The stakes are high: By 2023, the goal of CMS is for 75 percent of value-based payment to be provided through APMs.

For all specialties, the future of value depends on integrating clinical and financial acumen to develop new, specialty-specific advanced APMs that improve quality of care and health outcomes while reducing costs. In urology, one significant provider-led effort provides insight into the key success factors for such an effort.

The Case for a Value-Based Approach

In 2016, the Large Urology Group Practice Association (LUGPA) in Chicago, representing more than 120 urology group practices nationwide, saw both the opportunity and the urgent need to take a proactive stance in bringing an advanced APM to urologists across the country. After extensive discussion and focused efforts to identify the highest-impact opportunities for positive clinical and financial change, the group engaged the Center for Medicare & Medicaid Innovation (CMMI) for discussion and feedback.

Reinforced in its idea by CMMI’s perspective and recommendations, LUGPA submitted the first urology-specific proposed advanced APM to the U.S. Department of Health & Human Services (HHS) in July 2017. The proposal was submitted through the Physician-Focused Technical Advisory Committee (PTAC) in accordance with the process established under MACRA.

LUGPA developed the APM—titled “The APM for Initial Therapy of Newly Diagnosed Patients with Organ-Confined Prostate Cancer” (also called the “LUGPA APM”)—with the assistance of Integra Connect, West Palm Beach, Fla., a provider of technologies and services for value-based care, and Myriad Genetics, Salt Lake City. Along the way, the APM attracted letters of support from the American Urological Association, the American Association of Clinical Urologists, Prostate Health Education Network, ZERO–The End of Prostate Cancer, and the Prostate Conditions Education Council.

The proposed APM, in accordance with evidence-based guidelines, focuses on care for men diagnosed with localized prostate cancer, amplifying the appropriate use of active surveillance rather than active intervention.

The National Cancer Institute of the National Institutes of Health defines active surveillance as “A treatment plan that involves closely watching a patient’s condition but not giving any treatment unless there are changes in test results that show the condition is getting worse,” and notes that it involves regular testing and monitoring. By choosing active surveillance over interventions such as radiation therapy, prostatectomy, and hormonal therapy, physicians can help these patients avoid the potential side effects of invasive interventions—including diminished sexual function, urinary incontinence, bowel dysfunction, urinary irritation, and their related psychological impacts—while maintaining quality of care, improving the patient experience, and reducing healthcare costs.

The potential for cost savings is significant. LUGPA estimates active surveillance would save more than $20,000 per episode of care in a Medicare population and would result in even greater savings in commercially insured populations. In addition, as participating practices would take more than “nominal” risk, the LUGPA model meets the criteria for an advanced APM.

The introduction of a urology-specific model for an advanced APM within the United States, accessible to all practicing urologists, regardless of their practice affiliation or employment status, is significant for two reasons:

  • Only a limited number of advanced APMs have been proposed to date.
  • The potential for increased cost savings, improved quality of care, and an enhanced patient experience is a key area of focus under value-based payment programs, such as those under MACRA—and a strong focus for payers.

On Dec.19, 2017, LUGPA formally presented the urology APM to PTAC. In its real-time vote, the PTAC found that the model met eight out of 10 of the committee’s selection criteria, including scope, value over volume, and impact on patient safety. However, although the model’s payment method was structured similarly to the methods used with other APMs implemented by CMS, PTAC indicated the method was not necessarily the direction they were seeking for specialty models.

After the PTAC report to the secretary of HHS was published, the LUGPA APM team reconvened and decided to continue to strive for approval of the model within CMS. Regardless of how this model ultimately plays out with HHS, the significant potential for savings of this evidence-based approach to care is likely to capture the interest of commercial health plans.

First Steps Toward an Advanced APM

In 2016, when the opportunity to develop an advanced APM was initiated, it was recognized that the APM would need to be accessible to urologists within independent and hospital-based practices. To support participation by a large number of urologists, regardless of practice size or geographic location, the model would need to focus on care for a common urologic condition. Moreover, the model would need to be science-based and data-driven and support positive clinical outcomes among the specialty group’s patients it was designed to benefit.

As for developing a meaningful and appropriate APM model, LUGPA and its partners concluded that the APM would need to:

  • Focus on a high-impact disease state comprising many patients, thereby contributing a meaningful portion of annual practice revenue
  • Be clinically appropriate, with meaningful quality measures, including shared decision-
making for the patient and provider
  • Hold the potential for significant impact on cost drivers with eventual bidirectional risk

The partners therefore decided to create an episode-based payment model that would better align payment incentives with emerging—but still underutilized—guidelines for care of newly diagnosed, localized prostate cancer, assessing decision-making between active surveillance and active intervention pathways.

In 2015, an estimated 79,000 Medicare fee-for-service beneficiaries were newly diagnosed with prostate cancer, and 79 percent of these cases were localized to the prostate. Of these patients, 77 percent received active intervention care and services. Data suggested that a subgroup of this population could safely defer active intervention through active surveillance, thus avoiding overutilization of services while reducing morbidity and cost.

The numbers substantiated LUGPA’s view that the proposed model could produce a deep positive impact, clinically and financially. Nonetheless, deciding on the clinical focus of the proposed APM was only part of the challenge. LUGPA also had to determine the payment methodology and structure of the approach.

LUGPA worked with its partners to develop the parameters by which Medicare would pay for care and establish the business case for the approach—both for urologists and for CMS, with a continuing focus on providing high-quality patient care. Careful review of Medicare claims data suggested an active surveillance approach to localized prostate cancer, where medically appropriate, could reduce expenditures for patients by about $20,000 per episode of care. Active intervention, the claims data showed, costs 2.5 times as much as active surveillance while diminishing quality of life for some patients.

The full potential of the model is to reduce expenditures to the management of prostate cancer by more than $254 million annually, or an overall reduction of 14.4 percent in the total cost of care for eligible patients.

Based on the data, LUGPA and its partners introduced a two-part payment mechanism similar to the Oncology Care Model. It includes a monthly fee per qualified patient—to offset the investments needed to support robust surveillance—as well as the opportunity for a share of savings in total cost of care. A $75 monthly care management fee would be charged for initial and subsequent periods of active surveillance, at a cap of $900 per episode. Although only 88 urologists participated in advanced APMs in 2017, more than 1,400 urologists demonstrated direct support for the proposed APM through the association, and additional support was provided by all major national urology societies.

Setting the Stage for Transformation

The lessons learned from the creation of this APM point to opportunities for tighter integration between finance and clinicians in achieving the level of transformation needed to help practices across specialties adapt to value-based business models.

This transformation may require new workflows and new staffing models. For example, practices assuming accountability for the cost and quality of populations under value-based care typically need to increase monitoring across patient comorbidities and care settings, where adverse events can occur, which, in turn, may result in the need for new care navigation and coordination staff and capabilities. Both clinical and operational teams must come together to ensure successful integration into existing office protocols.

A successful effort also will require the ability to:

  • Analyze the unique characteristics of populations
  • Stratify populations by risk and predicted outcomes
  • Direct interventions to patients across conditions and care settings, including the home
  • Track and manage both quality and cost outcomes—capabilities that previously were limited to the payer space

Finance plays an integral role in helping physician specialists understand both the economic upsides and downsides of participation in value-based models, especially those that require shared risk. Specialists of all types face a payment swing of 28 percent or more depending on which types of value-based programs they have chosen to participate in —i.e., up to a 9 percent positive or negative adjustment, plus the opportunity for a 10 percent exceptional performance bonus. Finance leaders should partner with clinical leaders in evaluating the total value proposition of these new models, including the potential of these models to support delivery of high-quality, cost-effective care.

In determining whether APM participation is right for a physician practice or specialty, finance leaders should ask the following questions:

  • Does the practice or specialty have access to timely and accurate data to underpin the APM’s performance?
  • How capable is the organization of supporting strong integration across the network of model participants?
  • Is there consistent measurement of value-based performance between payers and physicians?
  • How well-integrated are the organization’s efforts to engage patients/members in value-
based initiatives?
  • To what extent will payers support patient/member education and engagement, such as by sharing data that can help identify high-risk or emerging-risk patients?

Other action steps finance leaders should undertake to help specialty practices achieve transformative change include the following.

Support enhanced access to quality and cost data in real time. To be able to achieve next-level performance, providers require real-time access to data that can inform actions. Provider organizations should invest in robust analytics and dashboards that draw on and unify all available financial and clinical data, and they should work with physicians and clinical leaders to see that dashboards provide the right information at the right time in ways that are easy to visualize, access, and comprehend. Physicians and clinicians likely would want to have mechanisms to project their scores under value-based payment models, manage against those scores in real-time, and maintain ongoing visibility into cost.

Take a lead role not only in aligning the organizational structure with value-based business models, but also in implementing technologies to manage and support care across all settings. Such technologies should provide easy access to insight into patient care, outcomes, and costs at both a population level and an individual level that can help the organization determine where it should focus its improvement efforts. Finance leaders should talk with physician and clinical leaders throughout the organization to determine the types of data that are both meaningful and actionable and the format and frequency with which data snapshots should be provided. An effective approach might be to pair a data analyst with any specialty that is embarking on a new value-based initiative to support design of dashboards that will most effectively support the specialty’s efforts to improve care delivery, outcomes, and costs.

Organizations also can learn from the Oncology Care Model program, a cancer-based advanced APM now closed to additional participants that provides $160 per member per month for the first six months of chemotherapy, with the potential for a semiannual, performance-based payment. In return, practices are expected to transform their operations by investing in new capabilities, staff, and technology to support a holistic approach to patient care. Any specialty organization embarking on such an approach should carefully consider whether it has the infrastructure necessary to meet similar requirements.

Close the knowledge gap around MACRA and other risk-based payment initiatives—including commercial-payer initiatives. This must be a key area of focus for senior finance professionals if their organizations are to succeed under value-based business models. Midway through performance year 2017, a survey by the American Medical Association found that just half of physicians considered themselves “somewhat knowledgeable” about MACRA. Meanwhile, one-quarter of physicians were not certain what quality measures their practice had chosen to report.

Finance leaders also should partner with clinicians and IT in improving their organization’s performance under MACRA by:

  • Analyzing quality improvement and claims data to determine strategies for improved performance in value-based models
  • Determining and advocating for infrastructure improvements needed to support the organization’s ability to take on greater levels of risk
  • Encouraging physicians to continually look for ways to take control of their future in a value-
based world

Positioning Specialty Providers for Success

Moving away from a fee-for-service mindset requires not only specialty-specific, episode-based payment models, such as the advanced APM proposed by LUGPA and its partners, but also a commitment to transforming practice workflows, staffing models, and infrastructure to support high-value care. Finance leaders should work with specialists and health plans to outline the business case for specialty-specific payment models and design approaches that present a clear ROI for payers and providers. Taking the first steps toward transformation is critical to shaping the future of value for specialty providers—and ultimately, for populations with complex health needs.


googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text1' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text2' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text3' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text4' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text5' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text6' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text7' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-leaderboard' ); } );