Full Speed Ahead: The Value-Based Care Train Doesn’t Plan on Slowing Down

Jan. 30, 2019
A cloud of uncertainty that filled the healthcare and health IT landscape not long ago is now clearing up, as the government has let stakeholders know that value-based care is here to stay

Two years ago, when President Trump and his administration took office, there was a great deal of industry uncertainty as to how the healthcare policy landscape might change. Specifically, healthcare and health IT stakeholders were wondering if the movement to a value-based care environment—which was turbocharged ahead by the Obama administration—would slow down at all.

Much of the stakeholder angst revolved around the private sector having already made significant operational and infrastructure investments that supported the shift to value-based care, as making even greater commitments in this area would be incredibly risky without continued government direction and assurances. And while those lingering questions on the future of certain healthcare policies and health IT-specific initiatives have not been completely answered, there is now significant momentum that federal health officials are full speed ahead in the accountable care movement.

One of the biggest indicators of the administration’s commitment to forge ahead with value-based care initiatives was when Alex Azar, a former pharmaceutical industry executive, who took over as Department of Health and Human Services (HHS) Secretary in January 2018, said that the shift of the healthcare system to one that pays for value will be one of four top department priorities going forward.

There have been an array of other signs as well, including CMS’ (the Centers for Medicare & Medicaid Services) core aim to push accountable care organizations (ACOs) into two-sided risk models much more quickly than before, via the lever of a new regulation that limits the time ACOs in the federal Medicare Shared Savings Program could stay in the program before they are forced to move up. While some ACO leaders and trade associations attest that this regulation could actually hinder the accountable care movement since organizations will inevitably drop out, the government clearly wants providers to take on more risk for their patients.

What’s more, in somewhat of a surprise twist, Azar, during a recent keynote speech at a healthcare conference, said the Trump administration is revisiting mandatory bundled payments and exploring new voluntary bundled payments as part of its goal of paying for outcomes, rather than process. Participating entities in these models receive bundled payments for certain episodes of care as an alternative to fee-for-service payments that reward only the volume of care delivered.

“We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” Azar said in his comments.

The Obama administration had introduced mandatory bundled payments for care for heart attacks and for cardiac bypass surgery in 2016, but in the past, CMS Administrator Seema Verma has said that she does not support making bundled payments mandatory—a sentiment that former HHS Secretary Tom Price, M.D., agreed with, as he even went so far as to direct the end of two mandatory bundled payment programs. Indeed, in November 2017, CMS finalized a rule that cancelled mandatory hip fracture and cardiac bundled payment models. In his comments, Azar acknowledged that his statements signaled HHS was reversing course on its previous stance.

Research further supports the industry’s ongoing shift to value-based care, as a report from the Health Care Payment Learning and Action Network (LAN) last fall revealed that one-third (34 percent) of total U.S. healthcare payments were tied to alternative payment models (APMs), such as shared savings/risk arrangements, bundled payments, or population-based reimbursements, in 2017, up from 23 percent in 2015.

Put all together, the cloud of doubt that was cast in late 2016, and which lingered for over a year, is now far less foggy; instead, healthcare stakeholders are now realizing that the value-based care train is not reversing.

As Jeff Smith, vice president of public policy for the Bethesda, Md.-based AMIA (the American Medical Informatics Association), puts it, “At the end of 2016, the value-based care train stopped, and people couldn’t figure out why it stopped or what to do about the train no longer going down the tracks. Then, you saw that the reason the train stopped was that certain parts of the train needed to be fixed and replaced to get things going again. And heading into 2019, this train will continue to gain momentum.”

Speaking to the value-based care clarity that industry stakeholders now have, Tom Lee, Ph.D., founder and CEO of Chicago-based consulting and software firm SA Ignite, adds, “People are making longer-range plans [to move into risk]; it’s easier now as opposed to the last few years.”

Smith notes that the Obama administration didn’t spend the capital it did to get the Affordable Care Act passed just to address low-hanging fruit. “In the health policy realm, going back to the mid-1990s, a lot of PhDs and high-paid executives have been thinking about how to fix the lingering problems of our system. Value-based care, however you define it, has a been a point of consensus across these people,” he says.

What to Watch For in 2019

Smith notes that industry observers have been waiting to see what CMMI—the Center for Medicare and Medicaid Innovation, created by the Obama administration and charged with piloting, testing and evaluating alternative payment models, such as bundled payment models—has in store for this year since the agency “has been quiet throughout the [Trump] presidency.” To this point, a Politico report early in 2018 noted, “The Obamacare-created office, which many Republicans have viewed with suspicion, has so far received minimal attention from administration leaders.”

But Smith believes that there will be more experimentation, such as alternative payment model pilots, that will start to come out of the CMMI shop in 2019. “There is an ethos that the CMMI experiments need to bake longer than they did in the previous administration,” he says. That was one of the chief criticisms that this administration has tried to be receptive to—just because [a pilot] works among a handful of participants in an alternative payment model doesn’t mean it needs to be a full-fledged national policy.”

Meanwhile, the third year of the Quality Payment Program (QPP), under the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law, is now underway, as CMS just recently published a final rule that provides updates to the Physician Fee Schedule and calendar-year 2019 QPP. In the regulation, CMS made changes to remove MIPS (the Merit-based Incentive Payment System, one of the two payment tracks under the QPP) process-based quality measures that clinicians have said are low-value or low-priority, in order to focus on meaningful measures that have a greater impact on health outcomes.

The rule also will overhaul the MIPS “Promoting Interoperability” (formerly called Advancing Care Information) performance category to support greater EHR interoperability and patient access to their health information, as well as to align this performance category for clinicians with the new Promoting Interoperability Program for hospitals. For the Promoting Interoperability performance category, CMS is requiring that MIPS-eligible clinicians use 2015 Edition certified EHR technology (CEHRT) beginning with the 2019 MIPS performance period.

While rumors about repealing MIPS and replacing it with an alternative model of reimbursement heated up early in 2018—thanks to a Medicare Payment Advisory Commission (MedPAC) report to Congress—there is now “very little talk about that on a macro level,” says Lee, whose company’s technology helps clinicians meet value-based reporting requirements. He adds, “MIPS is entrenched and the treadmill is really starting to speed up.”

On the ACO front, meanwhile, the final rule on the future of the MSSP dropped in late December and contained a few key provisions that have the potential to reduce the volume of federal ACO participants, according to some observers. A core element of CMS’ redesign of the MSSP is a reduction in the amount of time that an ACO can remain in a one-sided risk model. Under this final rule, CMS is decreasing the allowed period of time that an ACO can remain in a one-sided risk model from six years to, at most, three years for new “low-revenue” or physician-led ACOs, two years for all other new ACOs, and one year for existing one-sided ACOs.

CMS also finalized a higher initial shared savings rate of 40 percent for one-sided risk ACOs, after initially proposing to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs. The shared savings rate for two-sided risk ACOs will remain at 50 percent under this final rule.

Verma has said in the past that upside-only ACOs that are costing the government money should leave the federal program if they aren’t willing to take on more risk. However, industry groups such as NAACOS (the National Association of ACOs,) an association comprised of more than 360 ACOs across the U.S., wholeheartedly disagrees with the government on this point.

In an interview conducted before the final rule was released, Clif Gaus, president and CEO of NAACOS, attested that cutting potential shared savings in half would lead to a “long-term significant shrinkage in the ACO movement and a significant emanation of accountable care.” However, in a statement from Gaus following the final rule’s release, he noted, “We strongly support CMS’ decision not to reduce shared savings rates to as low as 25 percent. CMS’ final rule sets the savings rates at either 40 or 50 percent, and we look forward to working with CMS to monitor any impact that this decreased rate may have for new ACOs wanting to join the program.”

Aligning Health IT with Value

Another significant policy element to watch as 2019 unfolds will be how federal officials continue to look for ways to tie data sharing with value-based care. A CMS proposed rule from last April not only re-named the meaningful use program to Promoting Interoperability, but also requested stakeholder feedback through a request for information (RFI) on the possibility of revising Conditions of Participation to revive interoperability as a way to increase electronic data sharing by hospitals.

The final regulation on the Promoting Interoperability program dropped in August, and while there was no update on if that RFI CMS issued in April will lead to anything further, health IT policy experts have pointed out that if the Conditions of Participation were to get changed down the line, clinicians who do not engage in certain data sharing activities would be forced out of Medicare.

Smith says that between the regulations that CMS has issued for hospitals and physicians, the agency was getting ready to say that if providers don’t want to participate in the Promoting Interoperability program, or don’t want to provide a patient-facing API (application programming interface)—which would give consumers direct connectivity to their healthcare data—that’s fine, but then their Medicare dollars will be at jeopardy.

“People have asked me, hypothetically, if I really think Medicare would shut down a hospital because they don’t have a patient-facing API? No, of course that wouldn’t happen, but [making it a Condition of Participation] forces the priority,” says Smith. He explains that in order to have the API perform the way CMS wants it to, various other IT components will have to be in place, including having 2015 CEHRT. “If you are a hospital that has decided to get off the meaningful use train, this API requirement can force you to get back on. Having a Condition of Participation around patient-facing APIs is a truly elegant way to force laggards to adopt 2015 CEHRT,” Smith says.

So far, stakeholder feedback on if CMS should consider this change has been mixed. The Ann Arbor, Mich.-based CHIME (the College of Healthcare Information Management Executives) is one association that has taken the stance that revising the current Medicare Conditions of Participation to revive interoperability would not be a smart idea. At CHIME’s 2018 Fall CIO Forum, the trade group’s vice president, federal affairs, Mari Savickis, said, “We don’t feel like you can drive interoperability by taking away Medicare reimbursement. It also doesn’t get at the root cause issues such as standards and identifying patients accurately. These are the secret sauces to interoperability—not taking away someone’s Medicare reimbursement. It’s too much of a ‘sledgehammer-to-kill-an-ant’ approach.” Still, she noted that the RFI by itself has put the industry on notice. “It was a shot across the bow,” said Savickis.

Lee notes that clinicians are challenged by the Promoting Interoperability category of MIPS—worth 25 percent of one’s overall MIPS score—which in 2019 includes measures and thresholds related to four core objectives: health information exchange, provider-to-patient exchange, e-prescribing, and public health and clinical data exchange. “A number of the measures are much more focused on interoperability, which are program [elements] that many organizations have traditionally not done as well on,” he says.

Expect the Train to Keep Accelerating

Those interviewed for this story have confidence that the value-based care train is not going to stop anytime soon. Lee points to the timelines currently built into the MACRA law, such as 2022 being the last year that the 5-percent bonus will be available for clinicians in the advanced-APM track of the QPP.

“It goes away after that. The time between now and 2022 is a critical time to enable that transition into two-sided risk models because once you go past 2022, you don’t have that cushion anymore,” Lee says. “And if you look at the financial models for a lot of these two-sided participants, that 5 percent is crucial for them in terms of being able to convince people to get on board. If it’s going to happen, now is the time unless Congress decides to relocate more money beyond 2022,” he adds.

In the end, although each year brings new levels of uncertainty to the world of healthcare policy, at the same time, because so many provisions are baked into law, Smith notes, “As far as payment is concerned, there isn’t a whole lot that you can do differently than what has been done before.”

He offers the QPP as evidence of this: “2019 will be the first year since 2016 where you have a different set of policies around the edges, but you still have the same program that you had at the end of 2016, which is a program that grades people on how they use health IT, grades them on quality, on resource use, and on some kind of practice improvement activity.” Smith contends, “If you were to draw a picture [comparing] MIPS/MACRA at the end of 2016 to 2019, those pictures are going to be incredibly similar.”

Speaking to the internal health system transformation limitations that are in place, Smith says, “There are so many intelligent and passionate people that focus on the big picture of health policy and the minutia of health policy, and you quickly realize that your options are eliminated given the big constraints we have: having a multi-payer system and Medicare/Medicaid.” As such, he adds, “There are only so many levers you can pull and it’s up to the political winds to decide which levers to pull and how to pull them.”