Seema Verma’s Big Picture: Tough Love, ACO Acceleration, Interoperability, and Consumer Empowerment?

Aug. 29, 2018
Will CMS Administrator Seema Verma’s strategy of pushing hard on providers around ACO development and interoperability help to accelerate the shift to value-based healthcare—or will it backfire?

Whatever may come, CMS Administrator Seema Verma is standing steadfast in her “tough-love” stances towards providers when it comes to ACO development. As Healthcare Informatics Associate Editor Heather Landi wrote on Monday, “During a webinar sponsored by the Accountable Care Learning Collaborative Monday morning, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma reiterated the agency’s focus on pushing healthcare providers in accountable care organizations (ACOs) to take on two-sided risk while also addressing CMS’s commitment to try to remove barriers to value-based care.”

Further, Landi wrote, “During the 30-minute webinar sponsored by ACLC, a Salt Lake City-based accountable care collaborative, Verma discussed the sweeping changes that CMS is proposing for the Medicare Shared Savings Program (MSSP), noting that ‘it is time to take the next step.’ On August 9, CMS proposed a rule that included major changes to the existing MSSP ACO program, with the goal to push ACO organizations into two-sided risk models by shortening the duration of one-sided risk model contracts. Referred to as “Pathways to Success,” CMS’ proposal looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track and the ENHANCED track. Verma’s comments on Monday morning emphasized CMS’s firm stance on pushing healthcare providers to take on more risk, as well as CMS’s strategy of giving providers more flexibility—such as waivers around telehealth—as a reward to transitioning to value-based care.”

What’s more, Administrator Verma came to the webinar with data. As Landi reported yesterday, “For the 2016 performance year, the Next Gen ACO Model generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries, according to CMS. Overall, that represents a net reduction of 1.1 percent in Medicare spending within that program, Verma said. The Next Gen ACO model began in January 2016 with an initial cohort of 18 participants. It should be noted that 15 out of the 18 NGACOs had prior Medicare ACO experience.

Verma was not shy about what she thought those metrics meant. “What this really shows is that these Next Gen ACOs are taking the highest levels of risk and they’ve managed to maintain quality while still lowering cost,” Verma said during the webinar. “Much of the savings achieved by the Next Gen ACOs were largely due to reductions in hospital spending and spending in skilled nursing facilities, and that’s very consistent with what we’ve seen with how other two-sided ACOs have achieved savings. We’re excited about this; we think it’s a very strong start.”

Good cop, bad cop?

I’m impossible not to contrast Verma’s statements about the Next Gen ACO program with how CMS characterized the proposal it released just three weeks ago, on August 9. On that date, as Managing Editor Rajiv Leventhal and Associate Editor Heather Landi reported, “The Centers for Medicare & Medicaid Services (CMS) is proposing a new direction for ACOs (accountable care organizations) in the Medicare Shared Savings Program (MSSP), with the goal to push these organizations into two-sided risk models.”

Further, they wrote, “Referred to as ‘Pathways to Success,’ CMS’ proposal, which has been expected for a few months, looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

And, Seema Verma has made numerous comments now in numerous speeches to numerous different healthcare groups, making it very clear that she is becoming impatient with the pace of change in U.S. healthcare, and is determined to do something about it—with the support of Health and Human Services Secretary Alex Azar, her boss.

Indeed, Verma’s first in a series of speeches around interrelated topics of value-based payment and care delivery, patient/consumer empowerment, interoperability, and technology advancement, came as early as the HIMSS Conference in Las Vegas, where, on March 6, she “spoke of the need to move forward to empower patients with their data and information, in remarkably personal terms, recounting an episode in which her husband had collapsed while the two of them were not together, and was rushed to an emergency department, for what turned out to be heart failure,” as I reported at the time.  In the wake of her husband’s health crisis, she experienced the difficulty of accessing her husband’s health record, as an authorized family member. And that experience, she said, particularly animated the development of the MyHealthEData initiative she was unveiling on that date.

“The reality,” Verma said, “is that once the information is freely flowing from patient to provider, the advances in coordinated, value-based care, will be greater than anything we could imagine today she said back in March. Things could have been different for my family if my husband could have authorized me to have his health records on his phone,” she said. “Or if he could have notified me that he was in distress. And better yet, maybe we could have predicted his cardiac arrest days before, if his watch could have tracked his health data, and sending that data to alert his doctor, and possibly prevent what happened. My husband is part of the 1 percent that survives his condition. We shouldn’t have to depend on chance” for that type of outcome, she emphasized.

The big picture: pushing on several levels at once?

It seems clear that Azar and Verma—certainly, with the help of Donald Rucker, M.D., National Coordinator for Health IT—are determined to acceleration the transition of U.S. healthcare providers into value-based healthcare, through a combination of different incentives, including a wide variety of carrots and sticks. And, not to mix too many metaphors here, but it also seems clear that her praise of the progress made by the Next Gen ACO program ACOs is evidently a “good cop” positioning, while she largely framed the relatively modest progress in the MSSP program in a “bad cop” sort of way, essentially telling MSSP ACO leaders that it was time to stop with upside-only risk, and move into two-sided risk as quickly as possible.

Of course, the risks in this kind of approach are significant. Not surprisingly, the National Association of ACOs (NAACOs) heaped scorn on the August 9 “Pathways to Success” proposal, with NAACOS CEO Clif Gaus saying in a statement released that evening, that “The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered healthcare industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.” According to Gaus, “The downside financial risk for patient care would be on top of the significant financial investments ACOs already make, jeopardizing years of effort and investment to improve care coordination and slow cost growth.” He continued, “CMS discusses creating stability for ACOs by moving to five-year agreements, but they are pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices.”

So it seems to me that Azar, Verma, and Rucker, and their colleagues, are in a bit of a challenging place here, because even as the progress has been measurably stronger in the Next Gen ACO program compared with that in the MSSP program, even in Next Gen, it hasn’t been spectacular. Meanwhile, Verma’s attempts to push down harder on the levers of payment and regulation in order to turbocharge ACOs, could very easily backfire, causing more ACOs to leave the MSSP program than to switch to two-sided risk.

So this is a delicate, complicated moment. Will “tough love” and “good cop, bad cop” strategies at HHS and CMS really work? Only time will tell—but this feels like an important moment in the evolution of value-based healthcare, with no clear answers as to how HHS (the Department of Health and Human Services) and CMS officials might be successful in forcing transformational change forward, at a time when the coming U.S. healthcare cost cliff is looming more closely than ever before, just up a head. As Bette Davis said, as Margo Channing, in Joseph L. Mankiewiecz’s 1950 film “All About Eve,” “Fasten your seat belts—it’s going to be a bumpy night!”

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