News | Value-Based Payment

Nov. 12-16: ‘Mandatory Models Are Going to See a Comeback,’ Azar Says

News | Value-Based Payment

Nov. 12-16: ‘Mandatory Models Are Going to See a Comeback,’ Azar Says

Nov. 8—As payers prepare to gather for value-based payment discussions in Washington, D.C., next week, the administration’s healthcare leader warned the sector to prepare for mandatory models.

New mandatory models will include episodic cardiac and radiation oncology services, the HHS secretary said

Nov. 8—As payers prepared to gather for value-based payment discussions in Washington, D.C., next week, the administration’s healthcare leader warned the sector to prepare for mandatory models.

We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” said Alex Azar, secretary of the U.S. Department of Health and Human Services (HHS).

New mandatory models will include episodic cardiac and radiation oncology services, Azar said Nov. 8 at the Washington, D.C., meeting of the Patient-Centered Primary Care Collaborative.

Payment models focused on such conditions are likely to feature prominently at the National Alliance of Healthcare Purchaser Coalitions’ 23rd Annual Forum next week.

“We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement (CJR) model,” Azar said. “We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models.”

An example of the mandatory approach, said Azar, is the International Pricing Index (IPI) model, which the administration unveiled in October as a way to address Medicare payments for Part B drugs. That new model, which will be tested—and mandatory for providers—in regions to be announced, will be laid out in a proposed rule scheduled for spring 2019.

Hospital advocates were still studying the IPI model proposal but had early concerns.

Previous Pullback

Azar’s reconsideration of mandatory bundles followed a dramatic scaling back of planned mandatory bundled payments in December 2017.

The Centers for Medicare & Medicaid Services (CMS) canceled mandatory bundled payment programs for cardiac care and surgical hip and femur fracture treatment (collectively known as episode payment models [EPMs]). The agency also canceled the cardiac rehabilitation (CR) incentive payment model.

Nearly two years into the CJR model, CMS also switched participation from mandatory to voluntary for hospitals in 33 of the 67 selected geographic areas. Hospitals in 34 high-cost areas still must participate unless they meet CMS designations as “rural” or “low-volume.”

Seema Verma, administrator of CMS, said in late 2017 that CMS was moving away from mandatory bundles and toward voluntary bundles.

That change was urged by many hospitals and their advocates over concerns that mandatory models hindered inexperienced or under-resourced providers and were too complex.

“Whether through mandatory or voluntary payment models, our members face challenges finding the resources necessary for participation, including technology upgrades, process redesign, personnel changes, care coordination, expanded quality measurement, risk management, compliance, network development, governance, and legal restructuring,” America’s Essential Hospitals, which represents safety net facilities, wrote in an October 2017 letter to CMS. “These resource constraints will continue to affect essential hospitals that have been selected for continued mandatory participation in the CJR model, as well as future models, both voluntary and mandatory.”

Although hospitals and advocacy groups were nervous about requiring facilities without experience in bundled payment to participate in CJR, average Medicare payments for the episodes decreased by 3.3 percent more than payments to hospitals in a control group. That reduction occurred over just nine months—CJR launched April 1, 2016, and the first year ended with CY16—according to a report by a CMS contractor.

Chronic Care Models

Azar also discussed coming “long-term payment models,” in which providers are rewarded for “helping their patients stay healthy—instead of being financially rewarded when they get sick.”

Primary care providers will play a “key role” in such models by informing patients’ decision-making and behaviors, Azar said.

“We look forward to supporting new arrangements that help stave off costly conditions and deadly diseases, and helping everyone share in the savings that result,” Azar said.

Monday, Nov. 12

Webinar by the American Hospital Association (AHA) titled “Legal Aspects of Human Trafficking for Health Care Professionals.” Learn more.

Web conference by the Advisory Board titled “How Intermountain Centralized Recruiting for a 38,000 Employee Integrated Health System.” Learn more.

Becker's Hospital Review 7th Annual CEO + CFO Roundtable, Chicago (through Nov. 14). Learn more.

Ai4 Healthcare: Data Summit, New York City (through Nov. 13). Learn more.

Rural and Underserved Health Research Center Fall 2018 Symposium, Lexington, Ky. Learn more.

Credit Suisse 27th Annual Healthcare Conference, Scottsdale, Ariz. (through Nov. 15). Learn more.

Tuesday, Nov. 13

Public session of the National Academies of Sciences, Engineering, and Medicine’s Committee on Evidence-based Clinical Practice Guidelines for Prescribing Opioids for Acute Pain, Washington, D.C. Learn more.

Patient Care Affordability Summit by Infor and Becker’s, Chicago. Learn more.

Webinar by America’s Health Insurance Plans titled “Socio-Demographic Insights: What’s Missing From Your Data.” Learn more.

Meeting titled “Invest in Results Because Outcomes Matter” sponsored by The Federal Reserve Bank of San Francisco and Nonprofit Finance Fund, Los Angeles. Learn more.

Meeting of the National Institute of Allergy and Infectious Diseases titled “Opioids: Epidemic of Our Time and Impact on Infectious Disease,” Bethesda, Md. Learn more.

Stifel Healthcare Conference, New York City (through Nov. 14) Learn more.

Wednesday, Nov. 14

Hearing by the House Veterans Affairs Technology Modernization Subcommittee titled “180-Day Review of the Electronic Health Record Modernization Program.” Learn more.

Webinar by Lumina Health Partners titled “How to Build a 'Risk-Ready' Healthcare Organization.” Learn more.

U.S. News and World Report’s Healthcare of Tomorrow annual meeting, Washington, D.C. (through Nov. 16). Learn more.

23rd Annual “Wall Street Comes to Washington” Health Policy Roundtable sponsored by the Jayne Koskinas Ted Giovanis Foundation for Health and Policy, Washington, D.C. Learn more.

14th Annual Personalized Medicine Conference titled “Preparing for the New Possible,” Boston. Learn more.

2018 Mayo Clinic Social Media Network Annual Conference, Jacksonville, Fla. (through Nov. 15). Learn more.

2018 Virginia Rural Collaborators Conference, Lexington, Va. Learn more.

Digital Quality Summit hosted by the National Committee for Quality Assurance, Washington, D.C. (through Nov. 15). Learn more.

Integrating Primary and Behavioral Health Care through the Lens of Prevention, Charleston, S.C. (through Nov. 16). Learn more.

Meeting by the Pharmacy Quality Alliance titled “Social Determinants of Health Forum: Exploring Medication Access and Quality,” Alexandria, Va. (through Nov. 15). Learn more.

Thursday, Nov. 15

Meeting of the National Advisory Council for Healthcare Research and Quality (which advises HHS and AHRQ), Washington, D.C. Learn more.

Web conference by the Advisory Board titled “Medicare Hospital Outpatient Payment Update: Final Rule CY 2019.” Learn more.

Webinar by AHA and the University of Pennsylvania’s Center for Health Incentives and Behavioral Economics titled “Markers of Success in Bundled Payment Programs – Part 2”. Learn more.

Friday, Nov. 16

Beazley Symposium on Health Care Law and Policy titled “Serving the Needs of Medicaid Populations,” Chicago. Learn more.

Health Affairs Forum: Health Reform 2020, Washington, D.C. Learn more.

About the Authors

Rich Daly

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

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