Many healthcare policy observers found their heads and necks experiencing some form of whiplash under the previous administration, as the messages coming out of the Centers for Medicare & Medicaid Services (CMS), and particularly, the pronouncements coming from Seema Verma, to be confusing and sometimes contradictory. On the one hand, then-Administrator Verma spent a great deal of time and energy pushing the Trump administration line (which over time literally became template language inserted in nearly every CMS press release) that the way forward must inevitably involve unleashing consumer choice and the “power of the free market,” even as Verma regularly castigated the leaders of accountable care organizations (ACOs) for not moving quickly into two-sided risk. Verma seemed to be completely unaware of any contradiction between on the one hand insisting that the market would take care of everything (once healthcare consumers were fully empowered with data and information), and on the other hand, stating quite vehemently that provider leaders needed to move tout de suite into two-sided risk under the Medicare Shared Savings Program (MSSP), and, as some provider leaders insisted, failing to give them adequate time to decide how to move forward into risk, or even enough time to sort through their data to figure out whether they could succeed in two-sided risk, or even continue to participate in the MSSP.
There was also a fair amount of turnover at the Center for Medicare & Medicaid Innovation (CMMI), under Verma. Adam Boehler, who came to CMMI in April 2018 after a stint at Landmark Health, received praise for setting out some good ideas, but he was gone by September 2019, when Donald Trump appointed him to be CEO of the then-newly-formed U.S. International Development Finance Corporation.
That’s not to say that there was a complete lack of policy coherence at CMMI under Verma; indeed, on June 3 of last year, she wrote in a Health Affairs Blog article that “flexibilities” and “sufficient financial incentives that encourage higher-quality outcomes,” must be foundational to any new alternative payment models (APMs) created. It’s hard to know exactly in which direction CMMI might have evolved, had the Trump administration continued; but it did not.
Meanwhile, hints about new directions under the Biden administration came as early as April, when Elizabeth Fowler, Ph.D., J.D., the new CMMI Director, spoke to leaders of NAACOS, the National Association of ACOs, on April 20. As Senior Contributing Editor David Raths wrote on that date, “In an April 20 talk to the National Association of ACOs, Elizabeth Fowler, J.D., Ph.D., the recently named director of the Center for Medicare and Medicaid Innovation (CMMI), said the organization is at a “crossroads,” and is undergoing a strategic evaluation to determine how its alternative payment models can have a transformative impact on the healthcare delivery system. She added that CMMI will be looking at models with a health equity lens. Fowler began her talk by noting that the pandemic has shown us how far we have to go by revealing some of our biggest shortcomings,” and then “turned to some lessons learned from the 10 years of CMMI’s existence. Fowler noted that health system transformation is not easy and it is an iterative process. ‘Ultimately, at CMMI we want our alternative care models to position participants for success,’ she said, adding that sometimes that means speeding up when there's an opportunity, and sometimes it means taking a break to ensure that a forthcoming model can realistically deliver on what's intended and that it's the strongest option based on evidence and data.” Indeed, in the weeks before that address, CMMI had put several models on hold for additional review, including Primary Care First and Geographic Direct Contracting models. Others have been delayed, including the Kidney Care Choices and the Chart ACO track.
A new central organizing principle for APMs: health equity
And then, two weeks ago, Brooks-LaSure, Fowler, and two other senior healthcare policy officials—Meena Sheshamani, M.D., Ph.D., Deputy Administrator & Director at CMMI, and Daniel Tsai, Deputy Administrator & Director, Center for Medicaid & CHIP Services, at CMS—made their intentions clear in a Health Affairs Blog article published online on August 12. In the article, entitled “Innovation At The Centers for Medicare And Medicaid Services: A Vision For The Next 10 Years,” the officials wrote that “After launching more than 50 alternative payment models that reward health care providers for delivering high-quality and cost-efficient care, the Innovation Center has learned a great deal and is ready to build a stronger and more sustainable path forward. Beneficiaries, providers, and other stakeholders are encouraged by the work of existing models and are calling on the Innovation Center to leverage those lessons. Don Berwick and Rick Gilfillan, a former leader of the Centers for Medicare and Medicaid Services (CMS) and an Innovation Center Director, respectively, recommended ways to connect the Innovation Center’s agenda to CMS’s and U.S. Department of Health and Human Services’s (HHS) goals for improving health and health care delivery; they also offered proposals to improve the Innovation Center’s model performance through, for example, changing the way Innovation Center models set payment and financial goals and measure quality. And MedPAC, a non-partisan legislative branch agency that provides the U.S. Congress with analysis and policy advice on the Medicare program, is considering draft recommendations related to the Innovation Center’s work that support a streamlined and more harmonized portfolio of models.”
Importantly, the four officials wrote that “As now incoming leaders at CMS under a new administration, we have taken stock of lessons learned and begun to chart a path for the next ten years of value-based care. In undertaking this review, we concluded that we need a shared vision of the health system that we are collectively striving toward; we explicitly acknowledge health equity as a central goal for this vision. This focus aligns with President Biden’s day-one executive order charging each agency within the Administration to advance racial equity and justice for underserved communities.”
So here’s how the models have shaken out, as far as Brooks-LaSure and the other three CMS officials see it: “We learned something from every model launched to date,” they wrote in the August 12 blog. “So far, six models have generated statistically significant savings to taxpayers and Medicare: ACO Investment Model; Home Health Value-Based Purchasing Model; Medicare Care Choices Model; Maryland All-Payer Model; Pioneer ACO Model; and Repetitive, Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport Model. Four models have met the requirements to be expanded in duration and scope: Home Health Value-Based Purchasing Model; Pioneer ACO Model; Repetitive, Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport Model (expanded under MACRA, not section 1115A, authority); and Medicare Diabetes Prevention Program Expanded Model. The Innovation Center’s models span efforts to coordinate care for patients across care settings, such as through Accountable Care Organizations (ACOs); disease-specific approaches to improve care for people with kidney disease, cancer, and diabetes; and approaches that try to address social determinants of health, such as Accountable Health Communities. Providers have risen to the challenge and participated throughout the Innovation Center’s evolution, from grant-based models to sophisticated total-cost-of-care models with shared financial risk.
Notice what’s missing here? The Medicare Shared Savings Program (MSSP), the largest program. I’ve seen little to no commentary in the industry about that omission, but it seems quite significant to me. What’s more, one could read the above paragraph a few different ways; but it’s hard to escape the conclusion that Brooks-LaSure, Fowler, et al have concluded that the MSSP is not generating enough savings to be retained long-term, while the Pioneer ACO Model seems to be in good favor with CMS/CMMI. This will be an area that provider leaders will need to monitor carefully, for the next smoke signals coming out of the agency.
Meanwhile, the “six key takeaways” are absolutely fascinating. To summarize briefly, equity and streamlining will be extremely important for Brooks-LaSure, Fowler, et al. As they wrote in identifying the first of the six key takeaways in their blog, “The Innovation Center should make equity a centerpiece of every model. Models to date have been largely Medicare-oriented, and voluntary models have primarily drawn only those health care providers and organizations with resources and capital to apply and participate, resulting in limited attention to Medicaid and safety net providers. From here on, the Innovation Center will embed equity in every aspect of its models by seeking to include more providers serving low- and modest-income, racially diverse, and/or rural populations; the Innovation Center will aim to ensure everyone has access to providers at the leading edge of transformation.”
Very significantly, the officials write, identifying their second key takeaway, that “Offering too many models is overly complex, particularly when models overlap. The Innovation Center has launched over 50 models since its inception and is currently running 28 models concurrently. Testing too many models at once can create opposing, even conflicting incentives and burden model participants with figuring out the model hierarchies and interactions. Ultimately, this not only makes decisions about joining or continuing to participate in models difficult but also stymies systemic, scalable transformation.”
And, at least equally importantly, check out takeaways four and five: “Providers find it challenging to accept downside risk if they do not have tools to enable and empower changes in care delivery. The Innovation Center should ensure providers have options for manageable levels of risk as well as what they need to take on more risk, such as waivers, support in transforming care (particularly for vulnerable populations), and data. This will require the Innovation Center to provide strong, consistent signals and expectations about where CMS is heading in value-based care.” And, “Challenges in setting financial benchmarks have undermined our models’ effectiveness. To address these technical issues, the Innovation Center is evaluating options to ensure models are not resulting in overpayment and exploring opportunities to improve or replace the current risk adjustment methodology.”
I would urge our readers to read the entire blog by these four officials, because there are very clear implications in it that could well reshape the alternative payment model world for some time to come. One could debate endlessly some of the specific implications of what they’ve written, but it’s clear that the Biden administration officials have strongly rejected some of the core assumptions underlying the previous administration’s thinking, particularly the thinking of Seema Verma. Indeed, takeaways numbers four and five could easily be read as a total rejection of Verma’s thinking, as Verma spent a tremendous amount of energy trying to pressure providers to take on downside risk, while not giving them sufficient reasons to take it on. The same could be said of their statement that “Challenges in setting financial benchmarks have undermined our models’ effectiveness. Translation: Brooks-LaSure and Fowler believe that Seema Verma completely failed at setting appropriate benchmarks to encourage providers to participate in APMs.
So, yes: there’s a new sheriff in town, or rather, a whole new sheriff's posse. What’s clear is that Brooks-LaSure, Fowler, and their fellow officials at CMS and CMMI, have developed a strong, clear, conceptually consistent rationale for policy development in the APM space, and that they plan to follow through on that rationale, as they rationalize the value-based programs at CMS/CMMI. Expect them to move relatively quickly and decisively. Time for a new map to this new value-based policy world.
