The Healthcare Policy Year Ahead

Christopher Kerns, vice president, executive insights, at the Washington, D.C.-based Advisory Board, says that “I think you’ll see growth in MA [the Medicare Advantage program] and in ACOs [accountable care organizations]. Not all states have equal access to MA, because in some states, they might be dominated by one or two private payers that have no interest in MA, and they like their Medigap plans. So you’ll see all payers pushing more downside risk onto all providers. You’ll see MA growing significantly over the next couple of years. Just remember, with ACOs, you might achieve savings, but it’s not so certain, whereas MA has a lot more certainty, because of the risk adjustment scores, so physicians can more accurately prospectively prepare for their risk, whereas in ACOs, it’s retrospective. For example, if you’re a physician in Florida, how can you be sure that that snowbird will be your patient or that the patient will be assigned to a physician in New York? Whereas with MA, you know in advance about attribution.”

Indeed, Kerns says, “That’s why you’ll see more elements like those in NextGen [ACO program], where there’s going to be more prospective risk. The big open question is whether they want to make this mandatory for the whole country. And if they start to mandate all sorts of downside risk, there could be a lot of opposition to that. But if Medicare finds itself up against the wall, meaning that it has to cut spending growth, there are things like risk-based payments that would blunt the effect of certain reimbursement cuts or tax hikes. That’s why providers had better hope that risk-based contracting works, because if they can’t generate the savings that Medicare needs through value-based payments, the alternative will be major cuts to reimbursement, which no one will like.”

That leads also to the topic of encouraging a far higher percentage of provider organizations to take the plunge into two-sided risk. Is it in the cards for Congress and the Biden administration to push providers faster into two-sided risk, given the escalating costs of the overall U.S. healthcare system? Seth Edwards, vice president for strategy, innovation, and population health, at Premier Inc., puts it this way: “I think if you look at our current financial position for the Medicare Trust Fund, I’ve seen some really smart people suggest that we could move more rapidly except for some of the pandemic-related challenges. I think it will necessitate Congress and the Administration figuring out how to shore up the Medicare Trust Fund. And that would actually stimulate more providers to take on risk because of some of the actions that would have to occur.”

Indeed, Edwards says, “What I’m speculating is that, in order to shore up the Trust Fund, there will be likely payment reductions, regulatory movement around site neutrality, and other actions that would incentivize organizations to move into risk-based APMs. And I think we’re all seeing that. I work with about 75 health systems and clinically integrated networks (CINs) in our population health management collaborative, and many of them are already taking on two-sided risk in the MSSP [Medicare Shared Savings Program] and in MA. And we’re seeing a downstream impact of that in the commercial and employer space as well. That movement could catalyze other organizations to move into the MSSP, which has a determined path into two-sided risk. So I think we’ll see that happening more and more among all ACOs, including health systems.”

What about the Medicare Shared Savings Program and its benchmarks? Much controversy emerged over the course of the Trump administration, as CMS Administrator Seema Verma appeared to battle with some provider associations over how the benchmarks in the MSSP program are organized and applied. “There’s a confusion around whether or not we should use the benchmark to determine whether the program is being successful,” Edwards says. “It’s important to call out that benchmarks aren’t counterfactuals; they’re not accurate ways to determine how successful the program is. These organizations are generating savings for CMS. There’s really important context for policy for those models as they go forward. The next step becomes, why are they pushing additional amounts of risk? At CMS, they believe that it prods greater performance. But it’s really challenging to say, in the model, you get two years under Pathways to Success before you have to take on downside risk; that’s a very short time. The longer organizations are in the program, the more successful they are. So there needs to be a conversation around that, as well as to make sure there’s a level playing field around the classifications of different ACOs. So I would imagine there would be a look at that, as well as the underlying incentives for taking on additional amounts of risk.”

Indeed, Edwards says, “I think there could be an acceleration, not so much directly tied to risk, but more weighting of the base models in terms of the bonuses and discounts that might be applied. I do think that the public health emergency is creating a dynamic where economically or politically, it could benefit a discussion of the deficit and debt, and a large proportion of that expenditure is driven by healthcare.”

Beyond those issues, others hover on the horizon, including in the area of telehealth, say Darryl Drevna and Jamie Miller of the Alexandria, Va.-based AMGA (American Medical Group Association). Drevna, the association’s senior director of regulatory affairs, says that “MedPAC [the Medicare Payment Advisory Commission] is looking at how to modernize telehealth under the law.” And, among the issues the commission is looking at is the set of regulatory restrictions in place around geographic restrictions for providers of telehealth-based care delivery and others. Those restrictions were waived last March, but will have to be looked at once the public health emergency ends (currently set for the end of this calendar year). “That’s definitely on their agenda,” he says.

And, says Miller, the association’s senior director of government relations, “The discussion between committees in the House and the Senate, is around utilization.” And in the context of the potential change in the permanent regulations around telehealth, he says, there is a strong motivation there for legislators to help the healthcare system to save costs by making permanent all or most of the regulatory relaxations around telehealth ushered in by CMS last March.