Premier Inc. Leaders Survey the APM Landscape, in a Moment of Change

Where is the whole population health management/value-based healthcare train headed? Two executives who are deeply involved in value-based healthcare, in different spheres, have some concrete ideas. Healthcare Innovation Editor-in-Chief Mark Hagland spoke recently with Melissa Medeiros and Seth Edwards of the Charlotte-based Premier Inc. about the spectrum of issues, challenges, and opportunities in those areas. Medeiros is senior director of policy, government affairs, and Edwards is vice president of population health and value-based care, at Premier. Below are excerpts from their extensive interview.

Melissa, tell me which areas you cover in the policy area, at Premier?

Melissa Medeiros: I oversee value-based care, quality measures, and anything related to Medicare.

And what are the top concerns for you right now?

One of our top priorities is around the advanced incentive payments set to expire at the end of the year, so we’re pushing for an extension of those policies. MACRA [the Medicare Access and CHIP Reauthorization Act of 2015] involves 5-percent bonuses for those clinicians involved in advanced APMs [advanced payment models]. And per 2022, there is a two-year lag right now in the payment of those bonuses, between the payment year and the performance year. Those have been critical for our providers in advanced APMs. There’s quite a bit of concern about losing incentives for folks moving into advanced APMs, or those already involved, continuing forward.

Which APMs are involved?

The MSSP [Medicare Shared Savings Program] is the biggest one, but only certain practices qualify. Providers participating in the ACO REACH model, and in bundled payments, also qualify. Certain tracks qualify. The bonuses are for physicians and other clinicians.

Is that your main policy focus right now?

It’s one of our main areas of focus right now. We held a joint Hill briefing with APG [America’s Physician Groups] and NAACOS [the National Association of ACOs], last week. We partner with them quite closely. And that briefing was focused on value-based care broadly, with an extension to some of the specific APMs.

Seth, what are you most involved in right now?

Seth Edwards: The bulk of the work we’ve been doing has been around helping organizations develop their population health strategies, and doing that within the environment and paradigm where organizations are seeing significant cost increases around supply costs and workforces—and so what is the best way for the hospital or ACO to move forward? If we can avert a readmission for heart failure, one of the costliest ones—and most readmissions actually are now low- or no-contributing-margin events—then we can really help those organizations. So it’s thinking about rationalize the delivery model to make sure you’re doing the best thing for the organizations and the community, but also making sure you’re doing the best thing for the long-term health of the overall healthcare system.

Can you speak to the fact that this might beparticularly difficult time to leap into value-based contracting, for those provider organizations that have stayed in fee-for-service until now? As we all know, the pandemic has caused great financial distress for patient care organizations, particularly hospitals and health systems, in terms of revenues, so their margins are much slimmer than they were two-and-a-half years ago.

I actually think this is an optimal time, to take advantage of what we hope will be finalized in the physician fee schedule. It’s a good time to look at the margin challenges they’re facing under Medicare, and move ahead. And per the Kaufman Hall quarterly reports that you’ve referenced, if you say, look, we’re losing money on every single Medicare admission, how long with that negative margin persist, and how long will staffing costs continue to increase? Doesn’t that speak to moving forward into value-based contracting. If you enter MSSP and can share in the savings, that can give you a renewed margin. So it’s a tremendous time for organizations that have largely been focused on hospital-based care, can move forward to become true integrated healthcare delivery systems; we call it future-proofing. I don’t think there will be more money in healthcare. And as prices are forced down and reimbursement continues to be pushed down, working in new ways to support value-based care delivery, now is the time.

Medeiros: We are seeing CMS putting out policies aimed at getting new providers into value-based programs. There’s a lot of focus right now from the administration on providing new flexibilities. We even saw new opportunities for advanced investment payments for smaller providers who have lacked experience in value-based care. Hopefully, we’ll see some of those policies finalized at the beginning of next month, when we’re expecting to see the physician fee schedule finalized.

Edwards: And as CMMI pursues the goals they outlined in the 2030 visioning paper they put out, if everyone is going to be in a Medicare accountable model by 2030, it really behooves organizations to move forward; because if you don’t move forward into an accountable relationship with Medicare, you’ll be commodified compared to other organizations. To me, that offers a real opportunity.

Where are your members most struggling?

Edwards: We work with about 70 organizations within our population health collaborative. Some groups are just starting out; others have been working in this space for 20 years. But the most common request across all of them is, can we help them to develop a strategic roadmap, or a risk maturity model, that helps the organization conceptualize how rapidly they should be moving into risk in each of the payer sectors? Medicare, Medicare Advantage, commercial insurance, and Medicaid, and direct-to-employer contracting. So when they’re looking at each of those payer segments, they have to decide how rapidly to move into risk, and what the requisite capabilities are, to become successful with each step, and how they factor in market-system readiness and payer-readiness to implement a maturity model. So it’s about developing that strategy and planning thoroughly. A lot of care management support is needed—the infrastructure to manage the population; and that includes technology and analytics. We do a lot of work helping organizations understand their data, as well as developing strategies around completed, accurate documentation and coding.

How are things going to evolve forward in the next five years?

How will things evolve forward in the next five years? There are going to be a number of groups, depending on the outcome, the physician fee schedule, and how the Medicare Advantage market adjusts to being out of the Public Health Emergency. Depending on how the industry reacts to that as well—because they had some benefits from reduced requirements for reporting; that could have an impact on MA payment down the road. Some of our members will likely move into advanced amounts of risk. In general, as you take on more risk, you have more opportunity on the upside as well. They’ll believe there’s an opportunity there

Providers say they’re learning from Medicare Advantage and that that is helping them take on two-sided risk in Medicare.

Yes, many of our members are learning that way, but many organizations are engaged in risk with health plans, through joint ventures, partnerships, or contractual elements involving shared savings. So I think that that will be a trend that we’ll see, groups looking to take on more risk, to solidify their margin pressures. There are groups that are using their experiences in upside-risk-only to get the experience and the integration with their clinicians, to continue forward into two-sided risk. But I believe there will very much be a doubling-down, because of the possibility that they could be commoditized.

One of the points of tension between CMS [the Centers for Medicare & Medicaid Services] and providers, under the previous administration, was over the benchmarks in the MSSP program, which providers felt were too challenging, and whose details the leaders of NAACOS, for example, felt would cause many provider organizations to leave the MSSP. Seema Verma was insisting that providers take on two-sided risk faster than many were willing to do so.

Medeieros: All of us were pleasantly surprised with what was proposed by CMS this last year; there was definitely a shift of thinking between administrations. There seems to be less of a focus on the progression to risk, as had happened with Pathways To Success, which potentially pushed people into two-sided risk too fast for them. There does seem to be awareness of concern that if ACOs continue in the program, there could be a race to the bottom, where they’re competing against their previous success, per benchmarks. We did provide feedback on that. They’re looking to set a set of administrative benchmarks for five years; we’ve urged them to work with stakeholders. I love the RFIs from this administration; I do think they are listening, and this past physician fee schedule showed some flexibility.

Per that, the proposed rule came out in July; we’re expecting the final rule to drop around November 1, I believe, to take effect in calendar year 2024. So we should have a better sense of where things are going at the beginning of next month. But I do think some of the requirements might be implemented gradually. And also, taking into account prior savings, that’s a policy folks have been asking for, for some time; that gets at the sustainability of MSSP. There has definitely been a shift from administration to administration.

Edwards: I agree, a shift is taking place. And it seems to be less of a focus on pushing organizations into risk at a rapid pace, and more of a focus on getting more organizations to participate. That will only enhance the number of organizations interested in participating, as well as to maintain their current participation.