A Cloudy HIT Policy Picture is Beginning to Clear Up

May 29, 2018
At this time last year, healthcare stakeholders were filled with uncertainty, as the future of healthcare policy remained very much in limbo. But in the past several months, an air of stability has presented itself.

Although the health IT policy and payment landscape has plenty of moving parts, and continues to be fluid, one of the core principles that has not wavered among federal health administrators under President Trump has been a sustained emphasis on moving toward a market-driven value-based healthcare system in which consumers will be at the center of their care.

Indeed, at this time last year, healthcare stakeholders were filled with uncertainty, as the future of healthcare policy remained very much in limbo. But in the past several months, an air of stability has presented itself, and while providers, purchasers and payers undoubtedly still have their fair share of questions, things seem far more solidified than they did just one year ago. Consider the following:

  • In September 2017, Tom Price, M.D., resigned as Department of Health and Human Services (HHS) Secretary. Price, who only served in the role for about seven months, was replaced in January by Alex Azar, a former pharmaceutical industry executive who in just the last two months has been clearer about his desire to accelerate value-based transformation than perhaps Price ever was. “HHS has made shifting our healthcare system to one that pays for value one of our top four department priorities,” Azar recently said.
  • One of the clear themes of this year’s HIMSS (the Healthcare Information and Management Systems Society) conference was the federal administration’s public push toward a free market healthcare in which the patient is empowered through greater interoperability and access, as well as removing government burdens. Federal health officials said at the HIMSS conference, and elsewhere in recent weeks, that reducing clinician burden—such as the documentation stress that EHRs (electronic health records) cause, as well as the piled-up stacks of requirements from regulations and mandates over the years that must be processed—will enable providers to perform better in value-based payment programs, thus directly affecting their reimbursement.
  • Finally, year two of the Quality Payment Program (QPP), under the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law is underway, and in several instances, providers are asking for further flexibilities so that they continue to ease their way into a new era that pays them for the quality of care they provide rather than the volume of services rendered. What’s more, talk about a possible MIPS (the Merit-based Incentive Payment System, one of the two payment tracks under the QPP) repeal have ramped up, thanks to a recent Medicare Payment Advisory Commission (MedPAC) report to Congress, advocating for the elimination of MIPS and replacing it with an alternative model of reimbursement. But despite these MACRA/MIPS uncertainties right now, there is absolutely no talk about eliminating MACRA—a stark contrast from just a year ago.

When considering all of the policy and payment moving parts, one critically important point to keep in mind is that MACRA/MIPS for clinicians, and meaningful use for hospitals, are required activities, and for the most part, says Jeff Smith, vice president of public policy for the Bethesda, Md.-based AMIA (the American Medical Informatics Association), CMS (the Centers for Medicare & Medicaid Services) “is operated by virtue of the federal register, and there are almost immovable timelines by which change can happen.” What’s more, says Smith, “Over the last 18 months or so, there was definitely a period of time when the new administration was getting into place and officials from CMS and ONC (the Office of the National Coordinator for Health IT) started to get familiar with their surroundings. So, in 2018 we will start to see some of the fingerprints of the new administration make their way onto the policy landscape.”

Jeff Smith

What 2018 Has in Store

The 2018 QPP final rule under MACRA dropped last November, giving eligible clinicians just two months to get ready for the new reporting year. But questions have already emerged about the future of MIPS, following the MedPAC report to Congress, advocating for its elimination and replacing it with an alternative model of reimbursement. As Healthcare Informatics reported at the time, “MedPAC [a nonpartisan legislative branch agency that provides the U.S. Congress with analysis and policy advice on the Medicare program] submits two reports to Congress each year, in March and in June. Back in January, MedPAC voted 14 to 2 to recommend scrapping MIPS and replacing MIPS with a new clinician value-based purchasing program, called the Voluntary Value Program (VVP), and this proposal was included in the advisory group's recent report to Congress.”

MedPAC’s recommendations include an approach to a new value-based purchasing program that would allow clinicians to self-organize into groups that collectively assume responsibility for their patients’ outcomes. Under the VVP, clinicians can elect to be measured as part of a voluntary group, and clinicians in voluntary groups can qualify for a value payment based on their group’s performance on a set of population-based measures, according to the report. The VVP would measure all clinicians on the same set of measures—clinical quality, patient experience and value.

Moving forward, questions linger on if the MedPAC recommendations will be seriously considered by federal administrators, but as Smith points out, “When MedPAC says something, smart people would do well to listen.” At the same time, Smith and others do not believe that MIPS will be repealed and replaced.

“When [MedPAC] issues policies as dramatic and far-reaching as what it has proposed for the reformulation of the QPP and MIPS, you have to pay attention. But paying attention and seeing the work come to fruition are two different things,” says Smith. He adds that the granularity that resides inside of MACRA “far surpasses the ability of CMS to just take MedPAC’s recommendations and run with them. So, you would need a change to the statute, which is not [impossible], but it won’t be easy and it won’t happen on a timeline that most people are expecting.”

Dan Golder, principal at the Naperville, Ill.-based Impact Advisors, points out that CMS has outlined a core goal of wanting to shift folks into taking on more risk, and the agency has come out and said that moving toward advanced alternative payment models (A-APMs) is a top strategic priority. “The vehicle in which to do that is [through] MIPS,” he says.

Golder further explains that CMS has already enabled “super small practices” with low-volume Medicare revenues to bypass MIPS. And because much larger practices have the resources to go into the APM world, that leaves the medium to small groups who will be left in MIPS and who will be competing on the Cost category—a component of MIPS that uses Medicare claims data to collect payment information for care given to beneficiaries. And from there, Golder expects the practices that employ case managers who look at ways to control costs as the ones that will be effective.

Dan Golder

“If you don’t have the dollars to devote to those specialized resources, you won’t be able to compete on Cost, and will be penalized for not being as cost effective as some of the larger groups,” Golder asserts. “Those practices will then [have to] either accept low reimbursement or join an advanced APM. For CMS, the goal is to encourage people to move up to advanced APMs and go at-risk on their own. So, I think CMS will pick a Cost component percentage that will help facilitate that,” he says.

A New Outlook on ACOs and Bundles?

In regard to pushing Medicare clinicians into the A-APM track—and the 5-percent Medicare Part B bonus that comes with it—as opposed to the MIPS track under MACRA, while speaking at the recent American Hospital Association (AHA) annual membership meeting, CMS Administrator Seema Verma made strong remarks about the long-term sustainability of “upside-only” ACOs (accountable care organizations) that do not take on downside risk.

Verma said at that Washington, D.C.-based event that she, along with Azar, have been carefully reviewing payment models that were developed under the previous administration, with a close eye on Medicare ACOs specifically. Verma remarked, “Two-sided ACOs [that take on downside risk] have shown significant savings to the Medicare program while advancing quality.” But, she added, “The majority of ACOs, while receiving many waivers of federal rules and requirements, have yet to move to any downside risk.  And even more concerning, these ACOs are increasing Medicare spending, and the presence of these upside-only tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries. While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results,” Verma said.

Verma was referring to Medicare Shared Savings Program (MSSP) Track 1 ACOs, which do not qualify as A-APMs since they don’t take on downside risk. Indeed, CMS is on the hook for any financial losses in one-sided risk models all on its own.

As such, significant changes to ACO policy seem to be forthcoming. For instance, there is an ACO rule that was sent to the Office of Management and Budget (OMB) on May 1 and is currently pending review (at the time of publication). The proposed rule will likely call for changes to the duration of one-sided risk models and force people into two-sided risk, says Farzad Mostashari, M.D., CEO of Aledade, a Bethesda, Md.-based company that helps create and operate physician-led ACOs, and former National Coordinator for Health IT.

Farzad Mostashari, M.D.

Mostashari says that from Verma and Azar’s perspectives, they expected ACOs to take three years to figure things out before moving into downside-risk programs. “But now people have been in the program for six years, are still doing one-sided risk, and are asking for more time. I think what [CMS] will propose is that if your contract period is over, and you are in a one-sided risk model, you cannot renew that contract. You would have to get out or get up,” Mostashari says.

But just how ready are providers to take on downside risk? Mostashari points out that in the cohort of Track 1 ACOs that began in 2015, and thus had to make a decision in 2018 whether to move into a two-sided risk model or not, only 12 percent voluntarily moved to risk. As Yulan Egan, practice manager, research, at the Washington, D.C.-based Advisory Board, notes, “It is a huge shift for most providers—be it physician groups or hospitals. It requires them to change their care delivery patterns in a pretty drastic way, and add in new programs and strategies that they hadn’t necessarily considered in the past.

That said, a lot of organizations look at this as a “chicken-or-egg” problem, adds Egan. “Do you make the necessary preparations first and then dive into downside risk or do you need the burning platform of the financial incentive to get the organization to make the changes it needs to make and sustain those changes?” She continues, “Providers do recognize that ultimately if they’re going to do this well, they will need to make the commitment and dive into downside risk, even if they don’t feel 100 percent prepared for it. And some of the providers who have been in upside-only programs recognize that this program might not give them quite the incentive and push they need to truly transform the way they deliver care,” Egan says.

Meanwhile, on the bundled payment front, while former HHS Secretary Price and CMS’ Verma have said that they believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, they do not support forcing providers into these programs with mandatory requirements. But Azar might feel differently; during a Senate Finance Committee hearing in January on his nomination for HHS Secretary, he said, on the topic of CMMI [the Center for Medicare and Medicaid Innovation] pilot programs, “I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”

In January, CMS announced the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced), which will qualify as an A-APM, and which will test a new iteration of bundled payments for 32 clinical episodes, such as major joint replacement of the lower extremity (inpatient), for example. This came just one month after the government finalized a rule that cancelled mandatory hip fracture and cardiac bundled payment models.

Speaking at the World Health Care Congress in Washington, D.C. in early May, Bipin Mistry, M.D., medical director at Remedy Partners, a Darien, Conn.-based company that helps hospitals and physicians with bundled payment programs, and which is the largest awardee convener under the BPCI program, said that this bundled payment program will likely double or triple in size, and if it does, commercial payers will become attracted. But, added Mistry, making the program mandatory “might not trigger that [kind of activity].”

In the end, time will tell if the administration will support mandatory bundled payment programs going forward, particularly around joint replacement procedures and cardiac care—as those are among the most common areas of care in U.S. hospitals and post-acute care organizations—but what’s especially interesting is how Azar could potentially steer HHS in a new direction, one that would be quite different from that promoted by Price, who had been an orthopedic surgeon and a conservative Republican congressman.

For Hospitals, New Payment Proposals Have Teeth

Another major health IT policy moment occurred in late April when a hospital payment proposed rule was dropped by CMS, one that made clear the government’s intention to overhaul meaningful use (the Medicare and Medicaid EHR Incentive Programs)—which has been around since 2011. But the new proposed rule, that applies to about 3,300 acute care hospitals and 420 long-term care hospitals, and which would go into effect in October, if finalized, includes an array of changes that certainly could impact how hospital providers are reimbursed under Medicare in the future.

In the rule, which re-names the meaningful use program to “promoting interoperability,” CMS has included a proposal that would essentially force eligible providers to participate in health information exchange activities. CMS wrote that it is seeking public comment, via an RFI (request for information) on whether participation in the Trusted Exchange Framework and Common Agreement (TEFCA) should be considered a health IT activity that could count for credit within the health information exchange objective in lieu of reporting on measures for this objective.

Those who have been close to the early meetings on TEFCA—which is ONC’s latest plan to jolt the sluggish pace of progress on interoperability between providers— have praised the fact that provider participation in the initiative is currently voluntary. But AMIA’s Smith believes that providers might actually be forced to participate after all.

As Smith noted at the time of the rule’s release, CMS is considering revising its current “Conditions of Participation” for hospitals that would require them to electronically transfer medically necessary information upon a patient discharge or transfer. Other activities could be mandated as well, such as requiring hospitals to send discharge information to a community provider via electronic means, if possible, and requiring hospitals to make information available to patients, or a specific third-party application, via electronic means, if requested.

What does all this mean for providers’ Medicare reimbursements? Well, as Smith pointed out, while CMS removed the meaningful use patient data access objective (view, download and transmit) in this new proposed rule, “what this RFI [on the possibility of revising Conditions of Participation to revive interoperability] seems to be signaling is that they are not saying it’s not important to allow patients to view, download and transmit their information, but quite the opposite. CMS is signaling that they think it’s more important than participating in this little program that could cost you a percentage point or two in reimbursement. They think it’s so important that you don’t get to participate in Medicare [if you don’t meet the Conditions of Participation],” he said.

Indeed, shortly after the release of the rule, Verma tweeted out, “To avoid a payment penalty, providers will have to provide patients with electronic access to their health information.” So, in the end, while providers’ long-standing frustrations with redundant and process-oriented meaningful use measures have finally been heard, CMS might still move forward with the Conditions of Participation RFI revision. If so, it will add yet another element that will be fascinating to follow in the world of health IT policy and payment. 

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