Live Webinar | Patient Access
Live Webinar | Finance and Business Strategy
Live Webinar | Finance and Business Strategy
Live Webinar | Finance and Business Strategy
News | Coronavirus

CMS acts to limit losses for participants in value-based payment programs during COVID-19

News | Coronavirus

CMS acts to limit losses for participants in value-based payment programs during COVID-19

  • Temporary flexibilities aim to reduce financial risk for providers in Medicare value-based payment models.
  • The Next Generation ACO program was extended through December 2021.
  • The start of the global and professional tracks of the Direct Contracting model was delayed to April 2021.

Federal officials this week announced a series of tweaks to Medicare value-based payment models to limit financial risk for provider participants.

CMS on June 3 unveiled a range of generally worded changes to a range of its existing models, including Primary Care First (PCF), Bundled Payments for Care Improvement Advanced (BPCI-A), Next Generation Accountable Care Organization (NGACO), Medicare Shared Savings Program (MSSP) Track 1+ and Direct Contracting (DC).

“While many of our recent efforts have focused on driving the system toward value-based care faster, we’re adjusting the model implementation date for some of our new models and adjusting various deadlines for some of our existing models to give providers additional time to transition to value-based care,” Seema Verma, administrator of CMS, wrote in a blog post in Health Affairs. “We’re also delaying certain model reporting requirements so that providers can focus on patients instead of paperwork.”

Changes for BPCI-A, a voluntary bundled payments model with hundreds of hospital participants, include:

  • Allowing elimination of upside and downside risk by excluding 2020 clinical episodes from reconciliation
  • Allowing those choosing to remain in two-sided risk to exclude COVID-19 patient care from reconciliation

CMS previously changed the largely mandatory Comprehensive Care for Joint Replacement bunded payment model to remove downside risk by capping actual episode payments at the target price for episodes admitted between Jan. 31, 2020, and the end of the COVID-19 public health emergency. The agency also extended the appeals timeline for Performance Year (PY) 3 and PY4 from 45 days to 120 days, and extended PY5 through March 2021.

For PCF, the agency will delay the start of the performance period for the serious illness component until April 1, 2021. The PCF-only component will still start on Jan. 1, 2021

NGACO changes have included:

  • Reducing 2020 downside risk by reducing shared losses by the proportion of months that comprise the PHE
  • Capping NGACOs’ gross savings upside potential at 5%
  • Removing episodes of care for treatment of COVID-19
  • Using retrospective regional trends, rather than prospective, for 2020
  • Removing the financial guarantee requirement for 2020
  • Extending the 2019 quality-measure reporting deadline from March 31 to April 30, 2020
  • Cancelling 2019 quality audits
  • Extending the program through December 2021

Medicare ACO Track 1+ model changes included:

  • Removing episodes of care for treatment of COVID-19
  • Applying the MSSP extreme and uncontrollable circumstances policy to 2020 financial reconciliation
  • Extending the 2019 quality-measure reporting deadline from March 31 to April 30, 2020
  • Applying the extreme and uncontrollable circumstances policy to 2019 and 2020 reporting
  •  Allowing participants to extend their agreement for one year, through December 2021

Changes to the global and professional tracks of the DC model include:

  • Delaying the start of the first performance period for the first cohort to April 1, 2021
  • Creating a 2021 application cycle for a second cohort to launch Jan. 1, 2022
  • Adjusting quality benchmarks, if necessary, to reflect the change in duration of the 2021 performance period due to the later start

Advisers say the adjustments are necessary

Advisers to hospitals and other provider participants in the models said the policy tweaks were needed to provide some peace of mind for providers that are unsure how the pandemic, ensuing lockdowns and longer-term health implications would affect their financial performance in the models.

“Prior to this, our members in these models were a little frustrated that they weren’t getting any guidance about how COVID-19 would be mitigated,” said Aisha Pittman, vice president of policy for Premier, which advises more than 200 ACOs.

The one-year extension of the NGACO model through 2021 was potentially the most significant change, Pittman said, because it gives participants more time to consider whether to migrate to either MSSP Enhanced or the DC model. The MSSP has no 2021 enrollment option, while the DC model was delayed to April 2021.

Andrei Gonzales, MD, associate vice president with Change Healthcare, said a big takeaway from the tweaks was that they did not represent significant changes but instead aimed to get participants. through the current crisis.

“There’s nothing in here that I interpret as changing course on the programs,” Gonzales said.

John Kalamaras, manager of business intelligence analytics at DataGen, highlighted the ability of providers in BPCI-A to remain in two-sided risk — minus COVID-19 patients — if they choose.

“It gives them a little of flexibility in that option.” said Kalamaras, whose company works with 25 BPCIA providers.

Some questions remain unanswered

For providers that have not received any additional details on the changes directly from CMS, one lingering question is whether BPCI-A participants can choose to keep accepting risk in some clinical episodes of care and not in others, Kalamaras said.

Also unclear is how the ongoing pandemic will affect bonuses expected by physician participants in the models that qualify as advanced alternative payment models, Pittman said. Allowing participants to mitigate their risk may affect the requirement that they earn a certain share of their revenue from models that include “nominal financial risk.”

However, adjusting those thresholds likely will take approval from Congress, Pittman said.


About the Author

Rich Daly, HFMA senior writer and editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Sign up for a free guest account and get access to five free articles every month.


Related Articles | Coronavirus

News | Coronavirus

Court injunction stops federal COVID-19 vaccine mandate for healthcare workers from being implemented as scheduled

A federal judge has halted implementation of a new rule that would require all on-site staff in hospitals and most other healthcare settings to be vaccinated against COVID-19.

News | Coronavirus

News Briefs: Federal vaccination requirements finalized for hospitals and most other healthcare settings

If a hospital’s staff aren’t fully vaccinated by Jan. 4, the organization will be deemed noncompliant with Medicare and Medicaid regulations, according to a new federal rule.

Trend | Labor Cost Management

The COVID-19-induced surge in healthcare labor costs is testing hospitals and health systems

Struggles with the pandemic’s financial impact on the healthcare workforce leave few alternatives besides innovation, say industry experts and leaders on the front lines.

Column | Leadership

Relief meets reality: The healthcare workforce is still reeling from COVID-19’s impact

HFMA President and CEO Joe Fifer reflects on another challenging year for healthcare.