Fair warning these are our comments on federal regulation as written for CMS. We will be following up with a blog later this week.
November 17, 2015
Andrew M. Slavitt
Centers for Medicare and Medicaid Services
Department of Health and Human Services
200 Independence Avenue, SW Room 455-G
Washington, DC 20201
Re: CMS-3321-NC – Request for Information Regarding Implementation of the Merit-Based Incentive Payment System, Promotion of Alternative Payment Models, and Incentive Payments for Participation in Eligible Alternative Payment Models.
Dear Administrator Slavitt:
Today, Aledade, Inc partners with over 110 primary care physician practices, Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs) in accountable care. By January 1, 2016, we will have nearly 100,000 Medicare beneficiaries in the Medicare Shared Savings Program (MSSP) across 11 states. We are committed to outcome based approaches to determine the value of health care. We are committed to using technology, data, practice transformation expertise and most importantly the relationship between a person and their primary care physician to improve the value of health care in the United States.
Primary care physicians are responding to the opportunity of accountable care. With over 700 physicians partnering with Aledade we see every day the difference that a viable financial model that rewards health makes in the attitudes of physicians, nurses, office staff and beneficiaries. The energizing effect that accountable care instills in the primary care physician can not be over stated. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is an opportunity to solidify the health care transformation that has begun in this country. However, designing the Merit Incentive Payment System (MIPS) and Alternative Payments Models (APM) is one of the most challenging policy issues the Centers for Medicare and Medicaid Services (CMS) has ever faced. The seeds planted by the Affordable Care Act have the potential to thrive in MACRA, unfortunately they also have the potential to wither.
For these reason we are grateful that CMS put forward its request for information. The success of health care is tied to the success of the APMs. Aledade is one of the largest partners to primary care physicians in accountable care in the country and we are pleased to put forward our recommendations as CMS implements MACRA. Thank you very much for your consideration as we move together through this exciting time in health care. Please feel free to follow up with me or Travis Broome (firstname.lastname@example.org) if you or your staff have questions or would like to explore these issues further
Farzad Mostashari, MD
CEO and Co-Founder, Aledade, Inc
Alternative Payment Models
More than Nominal Financial Risk
No other provision of MACRA will have as much impact on health care transformation as nominal financial risk. We believe this is the key factor that will decide both participation in and success of APMs. Too much risk and many providers will not participate in APMs. Too like risk and the APMs will not be as effective at improving health care delivery and health in the country as they could be. Striking this balance is the most important decision CMS faces in implementing MACRA.
Before deciding on what amounts to more than nominal levels of financial risk, CMS must first define financial risk. We put financial risk into two broad categories. The first category is downside risk of the APM itself. We define downside risk as a provision in the APM that requires the health care partner in the APM (or entity as described in MACRA) to pay Medicare or other payer if costs and/or quality do not meet certain criteria. For example, in the MSSP Track 2 and Track 3 have downside risk, while Track 1 does not have downside risk. The second category is the investment risk required to participate in the APM. We define investment risk as not a provision in the APM, but rather the investment the entities’ must make in order to participate in the APM. For example, in the MSSP, ACOs are required to pay for administration of the Consumer Assessment of Health Care Providers (CAPHS) survey simply to participate and they invest much more to improve health. This is an investment that is at risk to succeeding in the MSSP.
We believe that the to continue the work of transforming health care CMS must define financial risk as downside risk in the APM itself. Both the ACA and MACRA clearly intend for entities to eventually assume downside risk. If CMS were to define financial risk as the risk to the investment entities are making, then MACRA would not require more of entities than the MSSP does today. If that were the case, there would have been no need for the more than nominal financial risk provision at all. Furthermore, MIPS puts up to nine percent of the eligible professionals’ fee for service payments at risk. Combine that with the five percent bonus qualified participants in an APM can receive if their entity qualifies and MIPS could be seen as the more advanced model if CMS were to define financial risk as risk to investments as opposed to risks for accountable care.
Much has been written about the motivating power of downside risk and there is no reason to believe that it does not motivate in a positive way. The lack of participation in downside risk in MSSP to date is a clear signal about how serious entities consider downside risk and the effect it would have on organizations that take on downside risk. However, just as the lack of participation is a signal of its effectiveness it should also be a signal to CMS of the need to strike the right balance in using MACRA to further incentivize providers to two-sided risk. Finding this balance so that we can move from today’s state to a desired state by when the performance years for APM bonus and MIPS occur is a difficult balance with no true correct answer.
To strike this balance we recommend that CMS focus on the commitment that each entity is making. We recommend that CMS require that for an entity to qualify as participating in an APM it must be in a contract that has a transition to a downside risk component within the contract itself. For example, a five-year contract that has two years of one sided risk and three years on two-sided risk would qualify. However, an APM that has a three-year contract of one sided risk and a requirement that if the entity renews it would have to renew in a two sided risk contract would not qualify. We recommend that to access the APM bonus and to be excepted from MIPS the entity must have made a contractual commitment to two-sided risk. Anything less allows health care providers and organizations to delay making a true commitment to accountable care. This delay is unacceptable and unaffordable if we are truly to succeed in transforming health care.
Yet we believe that a transitional contract is needed to strike the right balance in today’s environment. If the performance year is to be 2017 or 2018, the future is just around the corner. Requiring all entities to be in two-sided risk to qualify by either of those years will not strike the right balance and health care providers will simply not participate in APMs in the numbers that are necessary to transform health care. To strike the right balance, CMS will need to develop a new contract for MSSP or other APM that is a longer-term commitment, that clearly articulates future expectations of downside risk, focuses on success in population health and avoids the transfer of insurance risk from CMS to entities and their health care provider members.
Currently, MSSP offers too large a jump between one sided risk and two sided risk. Going from one sided risk to being on the hook for 50 percent of losses (up to 15 percent of the total cost of care) is a bigger transition than nearly all entities have been willing to make. CMS could lower the shared losses percentages with entities being able to only be responsible for 20 percent of the losses in the friendliest of downside risk option. CMS must also increase the accuracy of risk adjustment to avoid transferring insurance risk to health care providers and entities. A clear litmus test for this issue is whether the entity is financially responsible for a person developing cancer in a performance year. In the current MSSP, ACOs are financially responsible for this as it is accounted for in neither risk scoring nor benchmarking. It is this transfer of insurance risk that concerns the physicians we work with more than what the shared losses rate is or what the market for re-insurance is.There is no action CMS could take that would encourage the greater uptake of downside risk than to allow risk scoring to be dynamic and to be a leader in the improvement of risk scoring accuracy.
We acknowledge that there will always be some transfer of insurance risk in an APM. Other ways CMS can encourage the uptake of downside risk is to offer limited segmentation of health care areas based on the ability of health care providers to influence cost and progression for purposes of sharing in losses. For example, management of long-term, slow progressing chronic conditions is an area of great provider influence than trauma, accidents, and other sudden, acute conditions. Varying the shared losses rate based on provider control is another way CMS could demonstrate to health care provider that the APM is about accountable care and not transferring insurance risk to health care providers. Finally, CMS could work with the private sector is create a market for re-insurance giving both re-insurers and APM entities experience with the market for a few years at which time CMS could gradually reduce their support for the market.
We recommend that CMS create a new option in the MSSP to serve as the entry point for entities wishing to qualify as APMs.
- 5-year contract with 2 years one sided risk sharing in savings at 50 percent entity and 50 percent CMS and 3 years two sided risk sharing in savings at 60 percent entity and 40 percent CMS and sharing in the losses at 20 percent entity and 80 percent CMS.
- Stop losses on both the individual beneficiary and the population as a whole can be taken from the existing two-sided risk options in MSSP
- Risk scores should be dynamic and not artificially capped with CMS monitoring for abuse.
- CMS should model and pilot segmentation of downside risk exposure based on health care provider control
Having defined financial risk and struck a balance on creating an APM that allows for commitment to downside risk while remaining realistic about the current state of accountable care, CMS must then define more than nominal. We hold it to be self-evident that what is more than nominal to one entity might be downright miniscule for another entity. To set one fixed dollar or fixed percentage of total cost of care standard for more than nominal financial risk for all entities is to give large organizations a pass on financial risk and to expose small organizations not to merely more than nominal financial risk, but massive financial risk.
We believe that MACRA itself provides an excellent guide on how to define more than nominal risk to be considered a QP. We have already established that we believe that Congress intended for participation in an APM to include more risk than participation in MIPS. Combining the 9 percent downside risk to fee for service payments in MIPS with the 5 percent bonus for APM participation we believe that MIPS participation constitutes a 14 percent risk to the value of fee for service payments of eligible professionals. In order for an entity to qualify as an EAPM then the worst case scenario financial liability to CMS due to the downside risk must be at least be the value of 15 percent of the fee for service payments made by CMS to all of the health care providers that make up the entity.
For example, if CMS makes fee for service payments (i.e. all payments from Part A and Part B) of $100,000,000 to the health care providers of the entity seeking to qualify then the worst case downside risk to that entity must be at least $15,000,000. By creating the same level of financial risk to all entities CMS encourages participation of entities of all sizes and creates a level playing field for small, independent health care providers and large organizations alike. In the case where participation in our proposed entry level downside risk track does not meet this nominal threshold the entity would have to choose one of the already available riskier tracks to qualify as an entity participating in an APM.
By requiring a commitment to downside risk yet setting more than nominal financial risk as just slightly riskier than MIPS participation we believe CMS can strike the right balance between advancing health care transformation through accountable care and getting enough participation in APMs that the transformation spreads throughout the whole health care system.
EAPM Entity Requirements
In addition to nominal financial risk, MACRA includes other requirements for an entity to be an EAPM. We agree with the requirement of use of certified EHR technology. We believe and it has been our experience that EHR technology is a perquisite for sustained success in any accountable care model. We recommend that CMS simplify this requirement by adopting the Office of the National Coordinator definition of certified EHR technology as it pertains to being eligible for EHR Incentive Program in the performance year in question. Requiring use of certified EHR technology also creates desirable parity with participation in MIPS.
We also support parity with the quality measures. The quality measures should be an integral part of APM that the EAPM participates in. There is no need for additional quality measures beyond those used by the APM. All APMs should include an acceptable set of quality measures. Every APM should seek to be uniform in their quality measurement and justify variation in measures. We do believe that most APMs will have some level of justifiable variation.
We wholeheartedly support the principles of quality measurement outlined in the Health Care Transformation Taskforce comments to which Aledade is a signatory. We take this opportunity to highlight the principle of public accountability. In distinction to MIPS, in the APMs it is particularly incumbent on policymakers and risk-sharing providers to reassure beneficiaries and the public that reductions in cost are not associated with stinting on needed care- that protection and transparency must be a key goal of quality measurement in APMS.
Physician Focused Payment Models
The core principal in evaluating any payment model is whether it improves health, health care and/or lowers costs better than fee for service. Models should also serve as experiments to improve or fill gaps in existing APMs. The Committee should not approve models that are just easier or less risky than APMs. An approved PFPM should identify gaps that address a specific provider or beneficiary population or seek to improve on an existing APM. For example, our earlier recommendation to experiment with segmentation of downside risk exposure based on health care provider control. PFPM could serve as a platform for determining the right segmentation and defining provider control for different specialties. In this instance the PFPM would be built on an APM rather than a substitute for an APM.
We acknowledge the difficulty is determining a clinically relevant group of physicians, facilities and other health care providers. NPI accurately identifies individual providers, but as of yet no identifier successfully identifies a clinically relevant group. The Employer Identification Number (EIN) for organizations is used in many CMS programs, but as its name implies it is designed to identify an employer for tax purposes. This obviously creates potentially competing considerations between the tax and business structure implications of an EIN and clinically relevant aspects of health care providers coming together as a group.
We believe it is important to the success of both MIPS and APMs for health care providers to create groups that include only a subset of EINs. We have observed health care providers creating new EINs and therefore new groups for purposes of CMS programs simply to make the groups more clinically relevant. By doing this they make the group less relevant for tax and corporate compliance reasons. Creating an identifier for groups based solely on clinical relevancy is a needed step whether that identifier is the organizational NPI or a new number.
As with quality measures we recommend the principles outlined in the Health Care Transformation Taskforce:
- Provider discretion to create the group that makes the most sense clinically and better prepares them for APM participation,
- Maintaining the link between performance year and the year of effect of MIPS at the individual provider level,
- Quality is attributable to individual provider level unless something in the design of the measure prevents it.
Low Volume Threshold
While not referenced in the RFI, we believe the low volume threshold is very important consideration for making the decisions about MIPS that are addressed in the RFI. As those eligible professionals (EPs) who are in MIPS will be graded on total costs and those costs will include costs generated by EPs under the low volume threshold, it is important to consider both constituencies in determining the low volume threshold. The first constituency is those EPs who would be exempt from MIPS under the low volume threshold. The exemption exists for two reasons: small number concerns in the accuracy of the MIPS score and to alleviate burden in reporting on EPs so they do not decide to forgo the Medicare population altogether. The burden question can be attacked on several fronts not just an exemption due to low volume and we would encourage CMS to wait on valuing the burden reduction in determining the low volume threshold until more details on MIPS are available and can be commented on. For the small number variation, we encourage CMS to conduct statistical analysis using the data already available through the value based modifier program to determine what the minimum valid threshold would be to generate valid scores. We urge CMS to use this number and attack burden of reporting through other means due to the considerations of the second constituency.
The second constituency is the EPs under MIPS. We anticipate that they would be accountable for total costs not just their own costs. This means that costs generated by EPs excluded from MIPS will contribute to their costs. Now you have two participants with different financial incentives. The MIPS EP is financially tied to their MIPS score while the exempt EP is only tied to increasing their FFS revenue. For this reason, we believe that the low volume threshold should be as low as it can be and still produce a valid MIPS score for the EP so that as much of the cost as possible is covered either by MIPS or an APM.
Finally, as part of this consideration of both constituencies we encourage CMS to model all three aspects of low volume: patient panel, number of items/services and costs. We believe CMS will find that at a minimum consideration of both patient panel size and costs will be necessary. The measure of total costs is the most critical component of MIPS if it is to be successful in incentivizing better value in health care. Every EP excluded from MIPS due to low volume is a missed opportunity to impact value.
The use of number of beneficiaries, number of items/services or costs applies across many aspects of MIPS and APMs. We ask that CMS model all three when proposing how calculations dependent on any of the three.
Thank you for the opportunity to provide input as CMS begins to consider the policies that will implement MACRA. We look forward to contributing to the development of these critical policies.