Payment Reimbursement and Managed Care

What value-based payment changes are coming at the federal level?

May 6, 2019 3:33 pm

April 8—Expect a post-acute care bundle, rural-focused alternative payments, value-based payment approaches inspired by Medicare Advantage (MA), and additional mandatory models from the federal government, a top official said this week.

Adam Boehler, director of the Center for Medicare and Medicaid Innovation (CMMI), told attendees at the American Hospital Association’s annual membership meeting in Washington, D.C., that he learned a series of lessons in his first year in the position.

In terms of finding success in value-based payment models, Boehler has learned:

  • It is very hard for providers to have one foot in volume-based payment (fee for service) and one foot in outcomes-based models (value-based payment).
  • Federal payers should offer transparency and predictability to promote savings accountability by participants.

“The best thing we could do now is to improve by giving clarity, simplicity and transparency to the models; to give predictability; to let people operate a business on a model,” Boehler said. “We’re through with the experimental phase. It is time to operationalize and make the business case for these things beyond an experiment.”

That evolving view aims to promote a positive cost-benefit result for providers considering undertaking federal value-based payment models, Boehler said. Providers have complained that earlier versions were costly to operationalize and generally were money-losing endeavors, even for providers that were successful under the models’ rules.

Boehler, formerly the founder and CEO of Landmark Health, a provider of home-based services for seriously ill patients with chronic disease, said his office’s four priorities for new value-based payment models are that they include:

  • A patient-as-consumer focus
  • Provider accountability
  • Payment for outcomes
  • Disease prevention

The prevention component has proven the most difficult to operationalize but is also the most important way to lower healthcare costs, Boehler said.

Boehler said the overhaul of Medicare’s accountable care organization (ACO) rules at the beginning of 2019 aimed “to end some of the purgatory” for providers by pushing participants to take on downside financial risk for patients’ outcomes.

He acknowledged that lagging Medicare data — two-year delays are common — has proven a major obstacle for participants in CMMI models.

“You don’t know what’s going to happen; it feels like a flip of a coin. You can’t run a business that way,” Boehler said.

To address the issue, Boehler said CMMI is looking at simpler, more predictable approaches in its coming models. Additionally, to account for frequent delays in the availability of claims data, CMMI wants to allow all providers to regularly see data.

The office also will continue to “get out of the way” by eliminating metrics that don’t measure quality or are not focused on impacting patient care.

“Our job is not to create a lifetime’s worth of paperwork,” Boehler said.

CMMI will continue to launch mandatory payment models where there is widespread selection bias that slants participation toward providers that already can perform well, meaning they would simply receive higher payments for doing what they were previously, Boehler said.

Boehler has heard from many rural providers that they want to transform how they deliver care but that it can’t happen “overnight” due to a lack of funding. CMMI is examining payment alternatives for rural providers that could fund converting their extra-bed capacity to behavioral health or shifting half of their capacity to a telehealth model. One option could be a single global payment to incentivize all providers in an area to improve the community’s health.

“That is, create a single, rural payment that gives enough time to enable transformation,” Boehler said.

MA-based models coming

When asked how CMMI is looking to accelerate the move to value-based payment, Boehler said the office aims to learn more from the value initiatives of private payers in the MA program.

Boehler highlighted the large capitation agreement between his hometown health system, Ochsner, and Humana MA plans.

“We have a model we can look at that generally works — it’s not perfect,” Boehler said about MA plans. “The main issue has been real transparency and clarity and ability to take risk.”

From 30% to 50% of beneficiaries covered by MA plans are cared for under risk-based models. Boehler wants to offer more risk-based payment options, like those in MA, under fee-for-service Medicare to give providers a way to stop straddling the two payment systems if they choose.

Other models coming

Boehler was supportive of the proposed model submitted by the Coalition to Transform Advanced Care (C-TAC) to support the care of patients with serious and advanced illness.

Among the changes being considered are payment modifications for providers caring for very sick patients (including paying for home-based visits) and paying for interdisciplinary care.

CMMI is assessing proposed models based on whether they:

  • Improve quality (leading to healthier and longer lives) and lower costs
  • Achieve cost and quality goals if rolled out broadly
  • Provide multibillion-dollar savings nationally

Other coming models will focus on primary care practices (including those operated by hospitals) and kidney care and will establish a successor to the Next Generation ACO program.

CMMI also is interested in developing a broad post-acute care bundled payment model.

“We’re gathering stakeholder input now on that, so it’d be a great time to give us thoughts on where we can lower costs and improve quality,” Boehler said.


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