Healthcare Associations Call on Congress to Spur APM Adoption

Feb. 4, 2022
A group of eight national healthcare associations this week called on the U.S. Congress to help move the movement around alternative payment models (APMs) forward, noting the sluggish uptake in participation

A group of eight national healthcare associations this week called on the U.S. Congress to help move the movement around alternative payment models (APMs) forward, noting the sluggish uptake in participation among providers. The eight groups are the American Medical Association (AMA), AMGA (the American Medical Group Association), America’s Physician Groups (APG), the Association of American Medical Colleges (AAMC), Health Care Transformation Task Force, Medical Group Management Association (MGMA), NAACOS (the National Association of ACOs) and the Premier healthcare alliance. 

The press release, posted to NAACOS’ website, began thus: “Eight national groups who represent providers practicing value-based care urged Congress to do more to encourage the adoption of alternative payment models (APMs) in Medicare as a way to improve patient care and prolong the Medicare Trust Fund. In a statement for the record provided to the Senate Finance Committee on its hearing regarding the Hospital Insurance Trust Fund and the Future of Medicare Financing, the groups point to evidence that APMs improve quality and patient outcomes while having successfully lowered the rate of spending growth in Medicare.”

“Unfortunately, the pace of APM adoption has not been as fast as Congress desired when MACRA (the Medicare Access and CHIP Reauthorization Act) was passed in 2015. Today, there are more than 30 million traditional Medicare patients still in unmanaged, uncoordinated care,” the letter states. “Last week, CMS [the Centers for Medicare and Medicaid Services] released data showing a very modest year-over-year growth in ACO participation, continuing a troubling trend of flat participation in MSSP (the Medicare Shared Savings Program). Greater incentives are needed for providers to participate in APMs, to outweigh the risk, uncertainty, and sizeable upfront and ongoing investments needed to participate. Congress can play a strong role in rebalancing those incentives and encouraging growth in Medicare programs that promote better patient outcomes at lower cost.”

Further, the press release notes, “Medicare program assets will be depleted by 2026, according to the most recent Medicare Trustees’ Report to Congress. Lawmakers can spur APM adoption by advancing incentives included in the bipartisan Value in Health Care Act (H.R. 4587). Among other things, the bill would extend by six years the 5 percent incentive payment Congress created in 2015 for participating in certain risk-bearing APMs.”

“These bonuses have been instrumental in encouraging participation in risk-based APMs but expire at the end of this year,” the letter states. “Congress must act to prolong these bonuses and encourage more providers to enter into APMs to extend the benefits we describe above to more Medicare beneficiaries.”

The letter/statement for the record, addressed to the Senate Finance Committee in advance of a Feb. 2 hearing, included the following testimonial:

“So far, value-based care is taking root in our health care system, improving patient care and successfully bending the cost curve. The Centers for Medicare and Medicaid Services (CMS) estimates that Medicare Part A and B spending will grow by approximately 0.7 percent below the rate of inflation between 2021 and 2030. This is a positive sign that recent payment reform efforts have taken hold. Since 2012, accountable care organizations (ACOs) have saved Medicare $13.3 billion in gross savings and $4.7 billion in net savings. While that may sound small in comparison to Medicare’s overall spending, data from the Medicare Payment Advisory Commission, researchers at Harvard University, and the analytic firm Dobson DaVanzo and Associates show that ACOs are lowering Medicare spending annually by 1 percent to 2 percent. Knowing Medicare Parts A and B cost $636 billion in 2018, a 2 percent reduction in spending would save nearly $200 billion when compounded over a decade, assuming Medicare spending would grow at 4.5 percent per year without ACOs.”

What’s more, the letter to the Senate Finance Committee stated that “Further evidence that ACOs lower spending comes from the impact analysis of the proposed “Pathways to Success” rule in August 2018, in which the CMS Actuary used claims data to look at spending in ACO markets versus non-ACO markets. The agency estimated the overall impact of ACOs, including “spillover effects” on Medicare spending outside of the ACO program, lowered spending by $1.8–$4.2 billion in 2016 alone. When ACOs lower spending across the fee-for-service system, this also lowers payments to Medicare Advantage plans since those payments are based, in part, on fee-for-service spending.”

And, the letter stated, “We also know value-based payment models improve quality. In an August 2017 report, the HHS Inspector General reported that in the first three years of MSSP ACOs improved their performance on 82 percent of the individual quality measures compared to their baseline.[9] After the first three years 98 percent of ACOs met or exceeded quality standards. In the same report the Inspector General found that ACOs outperformed fee-for-service providers on 81 percent of quality measures. A study published in the January 2017 issue of Health Affairs found that Medicare ACOs lowered hospital readmissions faster than hospitals not affiliated with an ACO.”

The letter went on to state that “APMs, including ACOs, uphold patient rights and regularly evaluate patient satisfaction. Importantly, patients maintain their freedom of choice within traditional Medicare, allowing them to see any willing provider. In ACO models, there are no networks or prior authorization. In fact, patients in many APMs receive more benefits under traditional Medicare such as home visits for care management or post-hospital care, cost sharing support, and chronic disease management rewards. Often, patients must be notified they are being seen by a provider practicing in an APM. Providers in APMs are also held to quality measures to ensure the best patient care and incentive payments can’t be received without hitting a threshold for high-quality care.”

Given all that, the letter stated that “The committee should be focused on leveraging knowledge gained over the last decade of work in value-based payment to promote a more fiscally sustainable health system. APMs focus on value over volume with a commitment to driving wellness and whole-person care. Providers in APMs place a premium on identifying high-need patients, with an emphasis on delivering proactive, preventive care, chronic disease management, care management, and better transitions of care along with a myriad of other tactics that yield better patient outcomes. We encourage the Committee to consider the bipartisan Value in Health Care Act (H.R. 4587), which would go a long way to address incentives for APM participation.[11] The bill would increase shared savings rates for ACOs to restore them to the levels when the MSSP was launched, modify risk adjustment to be more realistic and better reflect factors participants encounter, remove the arbitrary high and low revenue ACO distinction that creates an inequitable path to risk, remove ACO beneficiaries from the regional benchmark to ensure ACOs are not penalized as they achieve savings for their assigned populations, among other changes.”

And, the letter added, “Importantly, it would also extend the Advanced APM bonus that Congress created in MACRA for an additional six years and gives the HHS secretary greater discretion to determine thresholds providers must reach to receive those bonuses. These bonuses have been instrumental in encouraging participation in risk-based APMs but expire at the end of this year. Congress must act to prolong these bonuses and encourage more providers to enter into APMs to extend the benefits we describe above to more Medicare beneficiaries.  Unfortunately, the pace of APM adoption has not been as fast as Congress desired when MACRA was passed in 2015. Today, there are more than 30 million traditional Medicare patients still in unmanaged, uncoordinated care. Last week, CMS released data showing a very modest year-over-year growth in ACO participation, continuing a troubling trend of flat participation in MSSP. Greater incentives are needed for providers to participate in APMs, to outweigh the risk, uncertainty, and sizeable upfront and ongoing investments needed to participate. Congress can play a strong role in rebalancing those incentives and encouraging growth in Medicare programs that promote better patient outcomes at lower cost.”

The letter/statement for the record further referred to the Jan. 26 announcement by CMS that 66 new ACOs had joined the Medicare Shared Savings Program and 140 existing ACOs renewed their participation this year, for a total of 483 active participating ACOs, which represents a decline from past years. NAACOS leaders have criticized CMS for the decline in ACO participation in the MSSP.  

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