Rich Daly | October 6, 2015
A Medicare leader countered growing concerns about hesitancy among providers to embrace value-based payment models by reporting stronger-than-expected provider interest in the program’s newest payment models.
Patrick Conway, MD, a deputy administrator and leader of the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS), told a Washington meeting of coordinated care leaders that he was pleasantly surprised by the “robust” number of applications to participate in the “next generation” accountable care organizations (ACOs). That interest ran counter to expectations within CMS, where some officials “predicted barely any applications” to participate. The agency plans to announce “soon” the participants approved to begin in 2016, Conway said.
Similarly, CMS has found that Maryland hospitals moved into a unique all-payer payment model established in the state last year faster and more broadly than the agency had anticipated. First-year results of the model, a joint initiative of the state and CMS that caps all-payer annual per capita hospital growth and requires hospitals to achieve significant quality improvements, will be released soon, Conway said.
Such findings reinforced to Conway that the healthcare industry’s move toward quality payments is accelerating.
“For the hospital CEO or CFO out there who says, ‘I’m doing really well in fee-for-service (FFS) so I’m just going to stick with it and it’s going to be OK,’ eventually it will not be OK, and I actually predict it will not be OK in a much shorter time frame than they might imagine,” Conway said.
Outlook Questioned
Conway’s upbeat assessment followed recent gloomy conclusions about provider interest in value-based payment models. For instance, a recent analysis by PwC’s Health Research Institute concluded providers are slow-walking the implementation of value-based payment models because existing FFS payment is higher. That slower-than-expected movement to alternative payment models could endanger Medicare’s plan to shift 50 percent of payments to alternative models by 2018, the PwC authors concluded.
That perspective was echoed in a separate presentation at the Oct. 6 event by John Gorman, executive chairman of the Gorman Health Group, who said payment structures would keep two-thirds of ACOs from ever obtaining a return on millions of dollars in investments.
However, Conway said provider interest in value-based payment models will continue to grow in part because such models allow for alignment with other provider initiatives. He gave the example of a Cincinnati hospital that opted to move all commercial payer contracts into alternative payment models after its neonatal intensive care unit began to lose money following a successful initiative to reduce preterm births in the area.
“You’ve got to align the macro- and micro-incentives with what you want out of the care delivery system,” Conway said.
Conway also pitched some benefits of participating specifically in CMS payment models, including the greater role participants have in shaping those models through their feedback to CMS.
Additionally, CMS is trying to ease provider participation in the alternative payment models in several ways, including by providing participants with patient data more quickly. A common complaint of ACO providers has been the lag time in data provided by CMS. Eventually, Conway would like to provide the data to providers as they consider going into such models, allowing them to assess their financial risk from the beginning.
Conway also urged providers that opt to join alternative payment models to stay in them. High-profile dropouts have included 13 of the 32 original Pioneer ACOs.
“I realize that sometimes you can’t stay in and you have to make a business decision, and I never hold that against anybody,” Conway said to providers in the audience. “But this is a long-term game, which I know you guys know, so help us on that long-term trajectory.”
Mandatory Bundle Concerns
Contrary to some expectations, Medicare’s alternative payment push may not include a dominant role for bundled payments. Conway said that the imminent launch of the Comprehensive Care for Joint Replacement (CCJR) model does not mean that providers necessarily should plan on expanded mandatory bundles in the future.
“I wouldn’t try to reach too far ahead,” Conway said.
Medicare’s first mandatory bundled payment came only after repeated CMS pilots, with data showing the payment approach improved quality and lowered costs in joint replacement care episodes.
The agency is considering concerns it has heard from hospitals about possible adverse impacts from the model as it works toward issuing a final rule on CCJR, Conway said. But providers should know that simultaneous participation in bundled payments and in ACO-type arrangements is possible.
“It varies based on the provider environment and the regional market characteristics, but our job is to enable various provider types and markets to be successful and to achieve those goals that we laid out,” Conway said.
Source: HFMA