Accountable Care, ACO, Affordable Care Act

MACRA, MIPS and APMs: A Report from CAPG

by Gregg A. Masters, MPH

So everyone is talking about value based healthcare. No longer is ‘business as usual‘ even an option on the table as the volume driven FFS zeitgeist continues to lose supporters in health policy circles while a growing body of clinical initiatives from ACOs to a range of variably structured and differentially market positioned risk bearing organizations (RBOs) model the new paradigm.CAPG_Guide to APMs

For some this value based healthcare mantra is code-speak for the associated narrative if not mandate to reflect all payment or delivery system model entries that shift clinical risk to providers whether ‘institutional‘, i.e., hospitals and/or their parent health systems (including IDNs), or ‘professional‘, i.e., physician networks, enterprises, medical groups or their managing agents (MSOs). This pool of value based participants includes a range of ACOs whether participating in the Medicare (MSSP or other options) program or their commercial derivatives as negotiated by many of the national or regional health insurance companies; not to mention ‘OWAs’ (other weird arrangements) that arguably incorporate one or more strategies to play and thrive under a range of risk based incentives.

CAPG_Guide to APMs_matrix

Contributing clarity to an arguably non-homogeneous market including performance results to date via provider entity type use cases is CAPG (fka as the California Association of Physician Groups) who recently published ‘CAPG’s Guide to Alternative Payment Models: Case Studies of Risk-Based Coordinated Care‘. 

This is a timely and resource rich report sourced from an eclectic pool of risk savvy industry players (CAPG members) that CAPG Executives Don Crane, President and CEO, and Mara McDermott, Vice President of Federal Affairs, introduce as follows:

You’ll … learn where each model is successful and strong, and where each has room for improvement. Key areas where CAPG members are demonstrating success in APMs include:

• Improving the quality and efficiency of care for patients. These APMs align physician payment to the achievement of performance objectives.

• Encouraging team-based care and a commitment to primary care.

• Innovating to better meet the needs of patients, particularly those with chronic conditions.

In addition to the significant progress our members are making in improving patient care and innovation, several themes have emerged where there is room for improvement:

• Improving data sharing with payers to continue to drive care improvements.

• Engaging patients in new payment approaches, particularly in accountable care organizations (ACOs).

• Aligning quality measures across programs. This will play an important role in reducing the burden on physician practices and getting actionable information to consumers.
As physicians across the nation embark on this journey toward risk-bearing arrangements, we hope you find this paper a practical, helpful, and invaluable guide. 

 

Most of you will connect and more or less identify with the ‘it takes a village‘ [to raise a child] admonition popularized by the presumptive Democratic Nominee for President, Hillary Clinton. In the grand transformation of a change resistant and to a very large degree legacy inertia driven healthcare financing and delivery ecosystem, this village idea may just be a gross understatement. Rather, I think the then Acting Administrator of CMS Don Berwick got it right scaling the true nature of the challenge before healthcare leadership, which is to steward the market mandated transformation via an ‘all hands on deck, full court press‘ invitation to make this transformation even remotely possible. In other words, this will take much more than just a ‘village‘.

Major props to CAPG for an important body of work on this nascent and ‘learning as we go‘ industry.

 

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Accountable Care, ACO, Affordable Care Act, MSSP

Final Medicare Shared Savings Program Rule (CMS-1644-F)

by Gregg A. Masters, MPH

Creating consistent high quality original content is hard. At ACO Watch, we’re not in the business of breaking news or high frequency posts to drive eyeballs and traffic to this blog so ‘the numbers’ that might attract advertising or sponsorship (there aren’t any). Instead we (mostly me) watch the developments in the sector and offer newsworthy items now and then with some commentary which usually tethers to institutional memory (often failure, some successes) of having been in this dance for a while.cms final rule MSSP

So here’s the latest from CMS on the proposed final rule for ACOs participating in the Medicare Shared Savings Program, see published rule here.

I remember back in the day when CMS was known as HCFA (the Health Care Financing Administration) and inside the Baltimore HHS complex, there dwelled an office with the name ‘Alternative Delivery Systems’ (ADS). This was the locus of staff (very modest at that time) tasked to monitor and track what was then limited to HMOs and the newly minted though ‘lite version’ dubbed PPOs.

Fast forward some 45+ years and those ‘alternative entities’ have become mainstream so to speak. Literally all benefit plans written today are contractually delivered via participating providers (IPAs, PHOs, IDNs, health systems, alliances, networks, direct or more recently ACOs) are some form of ‘managed care’ unless those providers have opted out of Medicare, Medicaid and commercial insurance in favor of Direct Practice or worse ‘Concierge Medicine’.

Since the Secretary of Health and Human Services has recently set a goal to have Medicare move away from its traditional reliance of unbridled fee-for-services medicine to a range of what CMS has or will define as ‘value based care‘ arrangements – everything from bundled payments, to gain sharing, to partial or global risk assumption by providers (hospitals, health systems, IPAs or ACOs (the next generation) much attention has focused on the right combination of incentives, infrastructure and regulatory context to move this historically change resistant healthcare delivery ecosystem into the brave new world of value vs. volume.

This is the latest effort by CMS to tweak the ACOs regs in order to meet some of the persistent objections to the program while scalably incentivizing the essential journey to risk assumption by providers is noted as:

The policies adopted in this final rule are designed to strengthen incentives in order to continue broad-based program participation and improve program function and transparency.

While the broader context is summarized as:

On June 6, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to incorporate regional fee-for-service (FFS) expenditures into the methodology for establishing, adjusting, and updating the benchmarks of Accountable Care Organizations (ACOs) that continue their participation in the Medicare Shared Savings Program (Shared Savings Program) after an initial three-year agreement period. This final rule also adds a participation option to encourage ACOs to transition to performance-based risk arrangements and provides greater administrative finality around the program’s financial calculations. CMS is making these modifications to strengthen incentives under the program after considering comments received on issues specified in the 2016 notice of proposed rulemaking. 

There is more to the story, and the referenced PR is here.

 

 

Accountable Care, ACO, Affordable Care Act

The Droids You Are Looking For Are Not Here

by Gregg A. Masters, MPH

Beneath the ideological crossfire and mostly bluster of the ACA ‘repeal and replace crowd’, while the latest ‘new, new, thing‘ aka the defacto Rorschach upside of a litany of mostly vaporware or me too ‘meh‘ digital health apps, platforms or S-1 filings (see: ‘Disruptive Idiots from Silicon Valley‘) stumble into maturity amidst growing calls for validation and evidence of tangible ecosystem sustainability, a pulse of innovation can be found in some less ‘sexy’ sectors.

Some time ago physician innovation pioneer Richard Merkin, MD, the founder and principal visionary behind the Heritage Provider Network and all of its sequelae (Heritage Medical Systems, Heritage ACO, etc.), opined from the stage at the ACO Summit that perhaps the biggest contribution (gold) from the ACA was to be mined from the forward leaning work stimulated by the law’s enablement of the Centers for Medicare and Medicaid Innovation (CMMI) aka @CMSinnovates on twitter.

Richard Gilfillan MDThe indisputable driver of what was then invested in Richard Gillfilan, MD the first CMMI Director (now stewarding the transformation at Trinity Health System, @TrinityHealthMI), was the volume to value imperative.

Into this challenge was cast considerable public capital/incentive funds to model what that meant from a delivery system and financing re-engineering perspective. Perhaps fueling the discounting of CMMI’s early efforts was the poorly constructed ‘Pioneer ACO‘ program, ostensibly designed to attract a more risk savvy pool of players who could reasonably assume greater risk and therefore earn more meaningful bonuses for doing what they already know how to do principally via Medicare Advantage participation. This early cohort of 32 ‘Pioneers’ has dwindled recently to 19 with the recent defection of the trophy Darmouth-Hitchcock ACO, see:Dartmouth-Hitchcock exits Medicare’s Pioneer ACO program‘.

With that as backdrop, consider the following timely guide from the Cooperative of American Physicians titled ‘The Physician’s Guide To Value-Based Compensation‘. Consider this an essential ‘blocking and tackling’ primer of how to incentivize the granular behavior of those who write the ‘purchase orders’ for an essentially supply driven healthcare economy. As my colleague and surfing buddy John Mattison, MD (@JohneMattison), Assistant Medical Director, and CMIO Kaiser Permanente Southern California (@KPshare) often says: ‘we get what we incent’.

CAP_guide to value based comp

[Editor’s Note: and for those of you really interested in where the AMA stands on the bridging the volume-to-value divide, listen to: Health 2.0 Fall Conference 2015: An AMA Deep Dive on ‘The App Cure’].

Whether the ACA is repealed (highly doubtful) or materially modified (also not likely) its essence will not and cannot be ‘undone’ – the horse is out of the barn. Like it or not, the controlling DNA driving the many moving parts articulated in the ACA (and its state lab version ‘RomneyCare’) builds on decades of established health policy thinking on what works in the uniquely American public/private pluralistic partnership of healthcare financing and delivery.

Watch the ‘enablers’

Whether ACOs, fully integrated delivery systems (real IDNs – NOT their IDN lite versions), PCMHs, or one of a number of strains of risk bearing organizations (RBOs) from bundled pricing to full blown per member per month (PMPM) capitation, this is where the sustainable action can and will be found. This other stuff, plays well at CES and the many wannabe healthcare industry copy cat conferences playing an up the ante ‘cool factor’ card to an often ADD crowd, yet it’s tangible contribution to the triple aim or sustainable healthcare economy remains squarely ‘on the come.

 

 

Accountable Care, ACO, Affordable Care Act

ACOs: The Results So Far (It Depends)

by Gregg A. Masters, MPH

It might have been prescient but minimally it was perfect timing. While Fred Goldstein, President of Accountable Health, LLC, and me were prepping for our session to re-cap on PopHealth Week (@PopHealthWeek) some of the insights from our deep dive series into Population Health and ACOs, reporting insights from embedded executives at physician led, hospital sponsored and health plan enabled ACOs respectively, CMS yesterday (August 25th) posted the results from their participants in the MSSP and Pioneer Programs.

The Pioneer results are displayed below (for a description of the Pioneer program click here):CMS_ACO_Results_Pioneers
Again, while we’re still very early in this game, one bit of ‘cognitive dissonance’ that I experienced is worthy of note and further exploration.

That being the Heritage ACO a physician led enterprise fielded by managed care industry veteran and disruptive innovator Richard Merkin, MD, et al (including my former American Medical International colleague Mark Wagar, President Heritage Medical Systems and most recently CEO Empire Blue Cross and Blue Shield) untethered in any way from an institutional portfolio of healthcare infrastructure (i.e., hospitals) booked zero savings for distribution while hospital tethered and a card carrying member of the Association of American Medical Colleges (@AAMCtoday) (as the principal teaching hospital for Einstein College of MedicineMontefiore ACO booked massive (relative to ‘aligned beneficiares’) savings.

One must ponder the question and ask how can this be so?

It’s common knowledge that ACOs ‘untethered’ from (heads in beds) legacy hospital interests are more nimble and therefore better positioned to manage the volume-to-value transition. Further, when you add into the mix the history of successful risk assumption across a distributed network of ‘aware’ coordinated care practices (both IPA and medical group) you have a material competitive advantage.

So perhaps the ‘devil is in the details‘ as it often is, and the answers are to be found in the formulaic world of risk adjusters, corridors, baselines and severity of illness calculations. We hope top hear direct from Heritage ACO as this author has made that request a number of times previously.

Another interesting result that stands out as it arguably tethers to the presumptively competitively disadvantaged ‘health plan enabled‘ camp of ACOs is the incredible savings generated by the Banner Health Network (a Pioneer ACO), which if memory serves me well is a co-creation of Banner and Aetna via their ‘payor agnostic’ Healthagen subsidiary.

For complete details see the CMS release ‘Medicare ACOs Continue to Improve Quality of Care, Generate Shared Savings‘ and ‘Medicare ACOs Provide Improved Care While Slowing Cost Growth in 2014‘.

Meanwhile for a bit of reading the tea leaves color via Beckers Hospital Review see CMS releases 2014 Medicare ACO quality, financial results: 10 things to know):

1. Ninety-seven ACOs qualified to share in savings by meeting quality and cost benchmarks. Together, they earned shared savings payments of more than $422 million.

2. Fifteen of the 20 participating Pioneer ACOs generated a total of $120 million in savings in 2014, their third performance year. This is up 24 percent from the second performance year when they generated $96 million in savings. Of those that generated savings, 11 earned shared savings payments of $82 million.

3. Five Pioneer ACOs generated losses and three owed CMS shared losses of $9 million.

4. Pioneer ACOs increased their average quality scores to 87.2 percent in performance year three from 85.2 percent in performance year 2. They improved an average of 3.6 percent compared to performance year two on 28 of the 33 quality measures and showed significant improvement in medication reconciliation, clinical depression screening and follow-ups, and EHR incentive payment qualification…

Read complete article here.

Yes we do live in interesting times. And ideological prism not-withstanding there is no way this Genie (ACOs et al, and whatever formulaic derivatives may be forthcoming) gets put back in the bottle – the best efforts of Governor Scott Walker’s ‘bold’ The Day One Patient Freedom Plan (more likevaporware‘) effort to repeal and replace the Affordable Care Act.

This train has left the station. Time to deal with it?

Accountable Care, ACO

An ACO Update via Leavitt Partners

By Gregg A. Masters, MPH

Just released is the continuing pulse of the accountable care industry (not just ACOs per se) via the consulting firm branded with the imprimatur of a former Secretary of HHS Michael Leavitt who opines from the Red State of Utah on the progress made by market driven initiatives outlined leavitt_acosin the Patient Protection and Affordable Care Act (ACA).

I will add my thoughts to the Leavitt commentary shortly, but the one slide that caught my attention y/e 2014 was the crossover by provider type from physician led to institutionally (hospital system) led ACOs.

One might say that the traditional revenue side vs. cost basis of a hospital group is now at the head of the class of ACO innovation is the wrong form of ‘disruptive leadership’.

Yet, it’s interesting to note that the American Hospital Association (AHA) is a principal partner if not co-sponsor of the report. Might this be a filtering outcome of the ‘fox guarding the hen house‘ or even the aggregate impact (conscious or otherwise) of strategy driven choices by CEOs of U.S. Health Systems?

By way of context, as a long as hospitals maintain their ‘revenue center’ primacy vs, their actual role (in the sustainable healthcare ecosystem food chain) as the true ‘cost centers’ they are – at least in legally, financially and clinically integrated delivery systems or networks (IDNs), how can ‘hospital culture’ be expected to pro-actively cannibalize a bread-and-butter fee-for-services business model in a reimbursement paradigm largely dominated by volume driven incentives even in 2015? Only a disinterested third party (aka physician led ACOs) can re-engineer the needed disruption of maldistributed, asset concentrated overpriced hospital services.

For the complete Leavitt Partners report click here.

ACOs by sponsor type Leavitt Partners

Accountable Care, ACO, Affordable Care Act

The ‘NexGen ACO’: CMS Speaks [again]

By Gregg A. Masters, MPH

At one level you have perhaps the most risk savvy and successful operators in the Medicare Advantage space aka ‘CAPG‘ (the California Association of Physician Groups) closely tethered to it’s less geographically constrained though California domiciled partner IHA as in ‘Integrated Healthcare Association’ explicitly advocating for the preservation of the Medicare Advantage program (MA) aka ‘Part C‘ even though the pre-ACA historical cost to the Medicare Trust fund ‘overfunded’ the program by 114% (estimated in 2014 at 106%) vs. historical FFS program payouts. CAPG’s value prop statement is in part reflected below:

Medicare Advantage is a critical element in the nation’s movement from volume to value in healthcare. With its emphasis on risk-based contracting and clinically integrated care, Medicare Advantage is paving the way for the advancement of coordinated care in every other healthcare program. Medicare Advantage has motivated the deployment of electronic medical records, the expansion of robust quality measurement and reporting, and the movement to team based care, all of which have resulted in better care for seniors. In addition to improving care and quality of life for seniors, this risk-based coordinated care model has the ability to rein in Medicare spending, unlike fee-for-service and its volume-driven incentives.

ACO Next Generation Model

Whereas, under the new if not ‘Deputy’ leadership since the departure of Marilyn Tavenner, former CMS Administrator, Patrick Conway, MD, recently announced the launch of a ‘new and improved’ ACO tagged the next generation ACO – which at some level may be virtually indistinguishable from it’s more mature MA program.

So the question remains, where is this program going and what if any difference will there be between Medicare Advantage and ‘Next Generation of ACOs?’

Quoting from CMS, the initiative details are:

The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. It will allow these provider groups to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP). The goal of the Model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.

Included in the Next Generation ACO Model are strong patient protections to ensure that patients have access to and receive high-quality care. Like other Medicare ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. This is in accordance with the Department of Health and Human Services’ “Better, Smarter, Healthier” approach to improving our nation’s health care and setting clear, measurable goals and a timeline to move the Medicare program — and the health care system at large — toward paying providers based on the quality rather than the quantity of care they provide to patients. In addition, CMS will publicly report the performance of the Next Generation Pioneer ACOs on quality metrics, including patient experience ratings, on its website.

CMS expects approximately 15 to 20 ACOs to participate in the Next Generation ACO Model with representation from a variety of provider organization types and geographic regions. The Model will consist of three initial performance years and two optional one-year extensions. Specific eligibility criteria are outlined in the Request for Applications (PDF).

Clearly this may be an inflection point, or more aptly stated, a convergence of what has been a parallel track (excluding the Pioneer ACO program) between ACOs in the Medicare Shared Savings Program (aka ‘HMO-lite’) and their more risk savvy competitors in the MA space.

For a 2014 analysis of the costs of the Medicare Advantage vs. traditional Medicare program see: ‘Medicare Advantage Program in 2014‘.

As tweeted to me earlier this week by James Hansen, VP of the ACO and MA operator company Lumeris:

‘Next generation ACO, finally a starter or more kissing your cousin?’

No doubt CMS is being responsive to provider (contractor) market input from both the Pioneer program exits as well as the overwhelming election by ACOs to NOT assume downside risk under the current terms of the MSSP.

Like it or not, [ACO/HMO] convergence is coming. Clinical and financial integration including partial or full risk assumption are the business models that will succeed in the pursuit of sustainable healthcare financing and delivery business models. I view this latest CMS announcement as confirmation of this macro directional trend.

 

 

 

 

 

 

Accountable Care, ACO, Affordable Care Act

Value Based Care: what we can learn from those who succeeded (and failed) in Year 1 of the Medicare Shared Savings Program?

By Randall Williams, MD*

“The definition of insanity is doing the same thing over and over again and expecting different results.” — Albert Einstein

einsteinIf you want to lead your organization to success with value based care, I’d like to help you avoid the mistake of committing organizational insanity. As I’ve written before, all value based contracting will require a different and diligent focus on reducing cost. In order to win, you need a model that will help you do that. But first, there’s a lot to learn from those who succeeded (and failed) in the first year results of the Medicare Shared Savings Program (“MSSP”).

The first year impact of MSSP has received lots of attention in the media. To sum it up:

Only ¼ of all MSSP organizations achieved ANY financial success, as measured by receiving shared savings.

cms_logoThat statistic is concerning and has caused hand-wringing inside and outside the Beltway, but it is not surprising. Why? It’s simple really — most ACOs are still working on basic organizational issues like:

  • integrating their doctors
  • getting CMS claims data into a format that can be analyzed
  • documenting and reporting quality performance metrics

While that work is necessary, it is not at all sufficient. It won’t generate the cost savings required to get to the shared savings bonus opportunity. MSSP organizations, depending a bit on their size, must reduce the total beneficiary cost (Medicare Part A and Part B) by at least 2.5 – 3.5%. Yet few are focusing on doing things differently when it comes to managing their population’s utilization and costs.

Imagine the following scenario:

The average beneficiary in your ACO spends $9,000 per year.

You have 10,000 beneficiaries.

Your savings threshold is 2.8%.

In order to get into the bonus category, you will need to avoid at least $2.5 million a year in medical expenditures. That doesn’t just happen on its own.

Sounds like tough work, you say. Maybe we can’t get there, you say. But some of your peers actually accomplished that in their first year.

Were they simply lucky, perhaps having the “good” fortune of a high starting point to work from? Or might their success be a result of the Medicare reconciliation “Black Box”? Evidence and analysis elsewhere suggests these aren’t the explanations. So what is?

Medicare’s own analysis of the Year One winners (those who got bonuses) gives some important insights to the real answer. From that data, we can see that:

  • Winners saved about 6% per beneficiary overall
  • Winners reduced hospitalizations by 52%, ER visits by 41%, and inpatient costs by 69%
  • Winners achieved a 40% decrease in admissions for heart failure patients and a 25% decrease in admissions for COPD patients
  • Winners dropped hospital readmission rates by 26%

What does this mean to organizational leaders looking to achieve savings bonuses?

  • Get your organization focused on avoidable admissions and readmissions to the hospital
  • Eliminate enough admissions to drive down overall costs by >5%
  • Establish a monthly goal of averted admissions that you can measure and manage over the course of each performance year
  • And whatever else you decide to do, don’t simply assume that doing what you’ve always done will get you different results!

For other useful analysis of MSSP results, I recommend reading insights from the Brookings InstituteMedicare ACOs Continue to Improve Quality, Some Reducing Costs‘. Please feel free to share your thoughts about winning with value based care in the comment section.

***********************

Dr. Williams is the founding Chief Executive Officer of Pharos Innovations. He is responsible for setting the vision and overseeing the execution of Pharos’ mission to transform healthcare through patient engagement in self-care. He has 16 years of executive experience developing chronic care monitoring programs.

The above is a guest post originally published here.