APG’s Susan Dentzer: Time to Think Strategically About Medicare and Medicare Advantage
On April 3, the leaders of America’s Physician Groups (APG), the national association representing more than 360 physician groups involved in value-based contracting, released a new report analyzing the thicket of policy and payment issues facing the traditional Medicare program and the Medicare Advantage (MA) program. The press release highlighting the release of the report, entitled “Medicare Done Right: Prescriptions For Success,” was entitled “Major Reforms In Medicare and Medicare Advantage Would Enable Superior Care For Beneficiaries At Lower Cost, Says America’s Physicians.” And, per the report, which goes into great detail on the challenges, the organization’s leaders made a number of key points, including the following main ones:
“The traditional Medicare program should move fully in the direction of accountable care, with beneficiaries drawn into alternative payment models by adding comprehensive dental, vision, and hearing benefits to these arrangements only.
‘Non-accountability penalties’ could be imposed on health systems and physician practices that declined to participate in alternative payment models (APMs).
Congress and CMS should revisit current methodologies for setting spending parameters for APMs to foster greater participation and make the models sustainable over time.
Congress should restructure cost and quality incentives in traditional Medicare, move away from the Merit-Based Incentive Payment System, and add back a restructured Advanced APM bonus program that would link bonuses to the number of beneficiaries attributed to an APM.
A limited set of site-neutral payment reforms should be put in place on a budget-neutral basis, aligning payment across all sites of care for 66 ambulatory procedures and increasing payment for 108 primarily hospital-based services.
For Medicare Advantage, policymakers should actively encourage and incentivize two-sided risk payment arrangements between MA plans and physician and other provider groups.
New models of risk adjustment should be developed and tested that will better tie assessments of MA enrollees’ health conditions with funding that reflects realistic costs of care.
Reforms to prior authorization (PA) should include speeding the move to electronic PA, standardizing PA criteria across plans and making them more transparent, requiring plans and providers to increase quality and timeliness of communications to patients, and incentivizing or requiring MA plans to adopt “gold card” programs for contracted providers.
CMS should test new aspects of the Quality Bonus Program and seek input from stakeholders before adopting new measures; it should also focus on a relatively shorter list of measures and prioritize those that matter to MA enrollees and demonstrably improve their health. CMS should also refine the current methodology of calculating Star Ratings to ensure that all MA plans are included in comparisons and that scores are predictable and transparent from year to year.
CMS should conduct greater evaluation of the costs and value of supplemental benefits and publish the results transparently. These results should form the basis of decisions about continuing these benefits within MA and extending them into APMs in traditional Medicare.
If these changes were adopted by CMS and Congress, and accountability increased throughout traditional Medicare and MA,” the press release stated, “beneficiaries would be healthier and Medicare would save money, based on research conducted by APG. For example, if the health outcomes obtained by APG groups operating in at-risk contracts in MA were shared by all enrollees in traditional Medicare, the savings could reach $22 billion annually, according to APG estimates.”
And it quoted Niyum Gandhi, chair of the Board of Director of APG and chief financial officer of the Boston-based Mass General Brigham, as stating that “APG is especially well suited to put forth these recommendations, given our longstanding commitment to being held accountable for quality and costs in health care. The expertise that APG members have developed in running accountable models in both traditional Medicare and MA means that we are uniquely positioned to comment credibly on challenges in both areas, and on the critical changes needed to deliver better outcomes for patients and affordability for taxpayers in a sustainable manner,” Gandhi said.
The press release also quoted Susan Dentzer, president and CEO of APG, as stating that “We look forward to engaging Administrator Oz, his CMS colleagues, others in the Trump administration, and members of Congress in advancing these ideas into policy. As former President Lyndon Johnson, who signed Medicare into law, once said, Medicare is “a test for all Americans – a test of our willingness to work together.” Our members want to work with other key stakeholders to lend their collective expertise and insight in building further accountability into this vital program,’ she said.
Following the release of the report and press release, Healthcare Innovation Editor-in-Chief Mark Hagland interviewed Dentzer regarding the constellation of issues that she and her colleagues covered in the report. Below are excerpts from that interview.
What would the trajectory of execution on this vision look like, if everyone agreed with the vision that you and your colleagues have laid out in the report?
Just to set context around this, there are certain things we know are baked into the cake and happening—the sheer number of people who will qualify for Medicare, the high and growing presence of chronic disease and disability in that population, the overall increases in cost in HC, as well as huge volume of expenditures on low-value and no-value care—all of that is real and will hit us whether we act or not.
So we would argue that it would be an irresponsible choice not to act. So given that we need to act, the question remains, how to act, and what to do. We are of the opinion that there are two arms of Medicare—traditional Medicare, which still has a lot of people enrolled an many like, and which has moved forward somewhat towards accountability through the ACA but has not moved forward yet enough—and then there is Medicare Advantage, a very popular program, and which is growing faster than traditional Medicare—and also has some issues and problems, which we fully acknowledge.
There’s a lot of discussion about the differential in costs between traditional Medicare and MA; we believe that some of it is real, and some is overblown and also that there’s a lack of understanding that the programs are different. There’s this assumption that traditional Medicare is perfect as it is, but it isn’t. The benefits structure is not great; the FFS payment system is not great; the sheer volume of low-value care delivered in that program is huge. And so it’s a ridiculous proposition to judge MA against traditional Medicare. That said, we thought there were a lot of issues in MA as well, most of all, around risk adjustment.
The risk adjustment model in MA is not a great one. And we’re moving forward to implement the V28 (Version 28) existing risk adjustment model; we believe next year will be the last year of the phase-in. But we believe that a new risk adjustment model needs to be put in place. And they need to come to terms with the actual amounts of time and resources required under the various models. And we’ve published a couple of articles now where we’ve showed that if you’re in a full-risk model under MA, you can produce superior outcomes for patients—less hospitalization, less unnecessary hospitalization for chronic-care patients, etc. And you could save $22 billion a year if that model were applied to traditional Medicare. So we believe that the care provided under advanced primary care models under MA is better, and we should do some real investigation to find out what the actual costs are in that program, and then tie the benchmarks back to managing the care of older, sicker beneficiaries. You cannot bill for the kinds of things under Medicare FFS that are needed to fully care for older, sicker patients, keep them out of the hospital, ensure that they’re adherent to their medications, etc., you cannot fund care management under traditional Medicare. And we understand why MedPAC keeps pointing this out. And we would argue that the main reason that this is causing so much concern is that people are not peeling back the onion. Are we worried that MA is costing more than traditional Medicare because traditional Medicare is perfect?
Most people would agree that that’s not the frame, and so therefore, what are we arguing? We would not contend that the current system with risk adjustment and star ratings, gives us the perfect answer; but we’re saying, let’s find out what it costs now to put together an advanced primary care system that takes care of MA enrollees through advanced primary care and produces better outcomes—keeps them out of the hospital when they don’t need to be in the hospital. Why would we not try to avert unnecessary hospitalization? Why would we not ensure that people have access to the non-medical assistance they need in order to support their good outcomes and care? And nobody would say that it doesn’t cost anything. Well, what does it cost? We know that we can take the capitated payment that the government provides to plans—the plans will mostly hand that over to us and say, manage it. And we know that when we do that, we get better outcomes. So let’s find out what it actually costs, what interventions are needed, and who the personnel are that are needed? And frankly, we’ll need to go condition by condition: what’s the cost of managing the care of preventing a pre-diabetic moving towards full-blown diabetes? If we could do that, we could get over the false over-coding issue. Improvement in prior authorization, in coding, in supplemental benefits.
We’re not at all saying that MA is perfect; but it’s a good system and the improvements can be made.
Congress will have to make some of the changes you and your colleagues have outlined, even as the Administration could make some changes through the federal rule-making process. Is Congress capable of making major healthcare policy changes in this moment?
We do not know the answer to that very important question. And frankly, there are elements of that report that will not be received well on the left, and elements that won’t be received well on the right, but we’re hoping there are enough people in the middle of the political spectrum that see this is reasonable. A lot of people on the left would prefer Medicare For All and would not want us to go down the path of further improving MA. On the right, there are people who don’t believe in APMs, and who have proposed that we get rid of CMMI and want to end trying to improve traditional Medicare. We decided that we needed to go with what we believe, which is frankly bowling down the middle, to say, we think there’s value in traditional Medicare; we think it needs to go a last faster. As you saw, we said we should get more Medicare beneficiaries into accountable models by offering them dental vision and vision benefits if they commit to remaining in a Medicare ACO. And we’ve had a very loose methodology around attribution for the years that MSSP has been in place, and we don’t think that’s produced the right results. We also know that it will be unpopular to add penalties to non-compliance. But if we really wanted to constrain costs, we would do that. And mandatory elements and models have been introduced that have shown success.
So, to your question, is it going to happen? It would have to take a lot of people coming together and pursuing the bipartisan approach that has characterized a lot of progress since the ACA [the passage of the Affordable Care Act in 2010]. We think that spirit is still out there; and we would recommend that policy be structured around those objectives.
Looking at the next six months, what do you think will actually happen in Congress?
Well, the next six months will likely be taken up by this reconciliation effort. Could that help or hurt our objectives as laid out in the report? Both are possible. What could help is the idea that we need to get more bang for the buck out of dollars spent on Medicare; and we think there’s a track record here worth continuing to pursue. And that spirit of trying to find future savings in healthcare could help get some aspects of what we’re proposing, enacted. What is of concern is that if you look at what is being tied up, it’s a big set of tax cuts and large increases in federal tax cuts and debt, almost to the exclusion of everything else. Does that afford a lot of opportunity to have a lot of reasonable discussions about ongoing reform in Medicare and Medicare Advantage? That’s an open question. And in the interest of inducing more accountability in Medicare, we would want to add dental and vision care into traditional models. If we’re going to add $6 trillion to the deficit, will there be additional space for spending money on those benefits? Perhaps not. And that’s what we are afraid of. So the kinds of policy choices inherent in reconciliation could be adverse to the kinds of reforms that we are talking about.
