CMS’ Verma: New Value-Based Care Models are Coming—and Some Will Be Mandatory

April 25, 2019
At the NAACOS-sponsored event, Verma discussed ACO progress, new value-based care models that are being developed, and why some mandatory models might be necessary

Speaking at the National Association of Accountable Care Organizations (NAACOS) Spring 2019 Conference, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma stated that ACOs in the government’s new Pathways to Success program are gearing up to take on higher levels of financial risk.

Verma gave an opening keynote speech on April 25 at the Washington, D.C.-based conference presented by NAACOS, a trade group with more than 330 ACO members. She remarked that on the move to a value-based system, “CMS is correcting misaligned financial incentives that have been in place for decades and creating new innovative payment models for providers. But as I’ve learned in my time at CMS, these models are complex to develop.”

Adoption, Verma continued, is perhaps the biggest challenge. “Today, only 10 percent of clinicians are participating in Advanced APMs [alternative payment models] and taking on significant levels of risk—no wonder frustration continues. The value-based transformation is not moving quickly enough, and there are several reasons behind this issue.” Those reasons, she said, are: the complexity of models; difficulty of obtaining data; and simply having a limited number of models available.

To this end, Verma pointed to the recently finalized Pathways to Success program that will make massive changes to Medicare ACOs going forward, with the principle aim to push organizations into two-sided risk more quickly. She also brought up the new set of voluntary value-based payment models for primary care physicians under the label “Primary Cares,” that the government introduced this week.

One prong of that is called Direct Contracting, which aims to engage a wider range of organizations that have experience taking on risk and that serve larger patient populations. “The Direct Contracting model represents the next phase of payment innovation for ACOs.  We encourage ACOs to apply for the model, and other organizations such as Medicare Advantage plans and Medicaid managed care organizations may be interested as well,” Verma said today.

The CMS chief also hinted that more value-based care models will be coming. “We will have more to announce soon as we continue our work developing new value-based payment models that will help us further hone in on areas of high cost and high medical need—including for seriously ill patients, such as those with end-stage renal disease.” She added, “We are continuing to work on our model for oncology care, and we want to offer options for radiation oncology providers. We will also be developing new models for rural care, as roughly one in six Americans live in a rural area, and statistically, residents of rural communities tend to have worse health status than those living in urban areas. And while we are excited about models for primary care, we also need more models for specialty physicians and surgeons.”

Verma went on to say that even though there was public backlash that the aggressive changes to the Medicare Shared Savings Program would deter participants from joining, “providers are committed to pursuing value.”

To this end, it’s noteworthy that Verma gave the keynote at the NAACOS conference, as the group has previously criticized CMS harshly for its policies that would force ACOs into downside risk models too aggressively. But more recently, NAACOS has softened its stance some; the organization’s president and CEO Clif Gaus told Healthcare Innovation a few months ago that NAACOS and CMS have a working relationship and have had many joint discussions on how to best move Medicare ACOs forward.

Indeed, Verma noted that 90 percent of eligible ACOs with agreements that would have ended on December 31st last year elected to extend their agreement period. And, that 85 percent of those ACOs applied to join Pathways to Success. “We are offering a second application cycle this summer to provide ACOs with another opportunity to join the redesigned program,” she said.

What’s more, Verma said that ACO enrollment data reveals that more organizations are moving to take on risk; 38 percent of applicants for Pathways to Success have applied for risk levels that would make them eligible for Advanced APM status. “Compare that to the fact that only 19 percent of ACOs are in two-sided risk arrangements today, and only 10 percent of clinicians overall are in Advanced APMs. This is real progress,” she said.

Addressing a point of past contention, Verma did say she expects that some of the models CMS has under development will be mandatory. “One reason for mandatory models is that selection effects can be significant in voluntary models. Selection effects happen when only the providers who would benefit financially from a model choose to participate, thereby reducing the amount of savings that the model can generate. Requiring participation also helps us understand the impact of our models on a variety of provider types, so the data resulting from the model will be more broadly representative,” she said. Verma has previously voiced skepticism about mandatory bundled payment programs.

The CMS head also gave some updates as it relates to data sharing amount ACOs, noting that CMS developed an application programming interface (API) that allows providers to send data directly from their electronic health record (EHR) system to CMS’ web interface. “I am pleased to say that there were 104 ACOs, or about 16 percent of all ACOs in Medicare, using the API to submit quality reporting data for 2018,” she said, adding that CMS will be testing and rolling out a new monthly claims line API this summer that will allow ACOs to more easily receive monthly Part A, Part B, and even Part D claims data.