A dispute has arisen over controversial statements made by two prominent healthcare policy leaders around the Medicare Advantage program. On Sept. 30, Donald Berwick, M.D., and Richard Gilfillan, M.D., published an article in the Health Affairs Blog entitled “Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 2: Building on the ACO Model,” in which they criticized in the very strongest terms the new Direct Contracting program under Medicare, the ongoing evolution of the Medicare Advantage program, and some core aspects of the ways in which accountable care organizations (ACOs) are managed in the Medicare Shared Savings Program (MSSP). In response, the leaders of the Los Angeles-based APG, America’s Physician Groups, wrote a letter to Health and Human Services Secretary Xavier Becerra, signed by APG president and CEO Donald H. Crane, criticizing the criticism.
Donald Berwick, M.D., president emeritus and senior fellow at the Cambridge, Mass.-based Institute for Healthcare Improvement, served as administrator of the Centers for Medicare and Medicaid Services (CMS) from July, 2010, to December, 2011. Richard Gilfillan, M.D., was the CEO of Trinity Health System from 2013 to 2019; prior to that, he served as a Deputy Administrator of the Centers for Medicare and Medicaid Services and Director of the Center for Medicare and Medicaid Innovation from 2010 to 2013. He has served in a variety of senior role across the industry including CEO of Geisinger Health Plan, Senior Vice-President for National Contracting at Coventry Health Plan, General Manager of AmeriHealth New Jersey and Chief Medical Officer of Independence Blue Cross.
The Health Affairs blog by Drs. Berwick and Gilfillan was filled with intense criticism of Medicare Advantage of the way in which the MSSP is being run, and most of all, of the new Direct Contracting program. Among their core criticisms: the Medicare Advantage program is essentially providing private health insurance plans with a back door towards privatizing the Medicare program while not adding value, while the entire way in which risk is calculated both in MA and in the MSSP is riddled with errors and problems.
Berwick and Gilfillan write that, “Given an Orwellian title, Direct Contracting, launched by Center for Medicare and Medicaid Innovation (CMMI), was anything but direct. “Indirect Contracting” would have been a far more accurate name, since the cornerstone of the program was CMS’s opening the door to non-provider-controlled “Direct Contracting Entities (DCEs)” to become the fiscal intermediaries between patients and providers. Originally CMS proposed three Direct Contracting Models: Professional, Global, and Geographic (GEO). The GEO Direct Contracting model was the most extreme, proposing to auto-assign every fee-for-service (FFS) beneficiary in a number of large geographic regions into a fully capitated MA-like “Geo DCE.” Beneficiaries were not given the right to opt out. GEO DCEs were expected to assume total responsibility for all FFS beneficiaries in their region. This responsibility included beneficiaries in any accountable care organizations (ACOs) or other Alternative Payment Models (APMs), except those assigned to other types of DCEs. With full capitation, as with MA, GEO DCEs would be responsible for most claims payments as well as medical management. This was, therefore, straightforward privatization of traditional Medicare, differing from MA only in that GEO Direct Contracting beneficiaries retained the right to see any Medicare provider under standard Medicare coverage.”
Among their arguments: that the Medicare Advantage program has failed to add value to healthcare. They write that one stated aim of Direct Contracting was “to accelerate progress of Medicare coverage away from FFS [fee-for-service] payment toward value-based contracting (VBC) “alternative payment models” (APMs). The illogical hypothesis was that MA firms, so expert at driving costs up, could do a better job controlling costs than existing ACOs. While savings from ACOs have been modest (MedPAC reports 1 percent to 2 percent),” they wrote, “accurate evaluation has been difficult, and the level of ACO success has been controversial, momentum has built every year in this voluntary program. CMS recently announced that ACOs in 2020 decreased costs by over $4 billion and saved CMS almost $2 billion. MedPAC projects that, at a minimum, MA will cost CMS $8 billion more than FFS in 2020.”
For that reason and others, they believe that, “If Direct contracting should be indeed “direct,” that is, an arrangement with provider-governed organizations, not financial intermediaries. If primary care needs invested capital, that capital should be tied to the expectation that providers will control how it is used. If CMMI wants to test investor-backed start-up firms, it should do it only at the limited scale needed for the test and only through direct providers of care, not through reconstituted or renamed MA Plans. If the scale of Direct Contracting outpaces the evidence, the Direct Contracting model will instead be what the Trump Administration seemed to intend: an effort, driven by ideological doctrine to turn over to private hands Medicare, the nation’s most popular universal public program.”
But APG’s Crane wrote in his letter to HHS Secretary Becerra on Thursday that “In their materials, Drs. Berwick and Gilfillan suggest that CMS replace the HCC RAF [risk adjustment factor] scoring process in two years and begin a process to develop an approach that does not rely on provider reporting. They claim this is necessary because of significant MA “overpayment” they attribute to risk score inflation through risk adjusted coding. Risk adjustment,” Crane emphasized, “was designed to estimate a beneficiary’s future health care costs and align compensation with acuity and severity of disease and the related costs of care as complex patients require the use of more resources. Risk adjustment encourages the enrollment of the sickest patients, and those in a lower socioeconomic status and is widely used in MA and the Medicare Shared Savings Program (MSSP) to appropriately risk adjust quality, expenditure benchmarks, and cost metrics, allowing for a more precise measurement of performance. Alignment of payment and performance goals rewards coordinated care and enhances the achievement of improved health and care among all individuals.”
Indeed, Crane noted, “Risk adjustment promotes quality care be offered for beneficiaries who experience high rates of comorbidities. The adjusted compensation for high-risk patients provides physicians, healthcare organizations, and health plans resources to create additional programs and services to support and manage patients with important and impactful diseases and conditions. Risk adjustment plays a pivotal role in MA and thus, expanding access to high quality care nationwide. In recent years,” he wrote, “there has been concern that risk adjusted coding has incented Medicare Advantage Organizations (MAOs) to increase premium revenue by coding more diagnoses through home visits and health risk assessment (HRA) tools. APG believes comprehensive diagnosis coding should be performed by the treating physician (or affiliated provider) as close to the point of care delivery as possible, and each coded diagnosis should be accompanied by supporting documentation, including the status and management plan for the condition, as applicable.”
Furthermore, he asserted that, “While we acknowledge that MA is not perfect and work must be done to ensure the program is working as fairly and efficiently as possible, he believes that HHS must not “do more harm than good in making the necessary corrections and reforms, such as the use of state benchmarks for end stage renal disease, county benchmark caps, and removing future data from 2020 cost rebasing,” all of which recommendations APG had recommended in the association’s November 2020 comment letter on the MA program advance notice. Indeed, Crane emphasized, “Primary care is vulnerable in this country, and MA percent-of-premium contracts with appropriate risk adjustment provides resources to achieve the larger goal of ensuring primary care remains strengthened and accessible for all. Primary care thrives in prospectively paid value-based models and is integral to address our nation’s increasing burden of chronic disease.”
