CMS Asked to Bolster Value-Based Payment Models for Providers

December 21, 2017 - The American Academy of Physicians, Aledade, the Texas Medical Association, Iora Health, and the Medical Group Management Association (MGMA) are among provider advocates urging CMS to create more opportunities for providers interested in value-based payment models with higher financial risk.

In a letter to CMS Administrator Seema Verma, the organizations argued that physicians are excellently positioned to excel in payment models that financially reward, and penalize, healthcare providers based on performance.

“Physicians — especially independent physician practices — are the linchpin of our nation’s health care system,” the letter stated. “They have repeatedly demonstrated their superior ability to generate positive results in value-based care arrangements, both in improved health outcomes and reduced costs. They are the most powerful tool we have to foster an affordable, accessible system that puts patients first.”

Specifically, the provider advocates lobbied for CMS to prioritize physician-led advanced alternative payment models (AAPMs), physician-led accountable care organizations (ACOs), and consumer-directed care models that potentially reward or waive patient healthcare costs.

The organizations suggested future AAPMs and provider-led ACO designs should gradually put providers at financial risk over time and offer higher financial gains as providers increase their financial accountability.

Provider risk should also be proportional to an organization’s financial attributes, such as profitability and revenues, so that larger provider groups are not favored under these potential AAPM and ACO models. The letter proposed developing a new Next Generation ACO with updated flexibilities could help providers move physician finances into a measure of value.

“In addition, models should provide more predictable and accurate benchmarks, as in Medicare Advantage, with regional benchmarks and risk adjustment,” the provider advocates noted.

The organizations contend that CMS has an opportunity to support consumer-directed care models that factor patient healthcare decisions into value-based payments. Consumer-directed care models could allow providers to determine if certain cost-sharing amounts should be waived or paid back to a patient for recommended services.

The provider advocates added that these types of models could help fund financial incentive programs for patients aimed at improving positive healthcare behaviors. “However, any regulatory changes to beneficiary assignment must not impose substantial new administrative burden and paperwork requirements on already overburdened practices,” the advocates wrote.

The second half of the letter includes suggestions for improving payer market conditions, such as increasing provider competition to lower healthcare costs and integrating Medicare Advantage (MA) administrative services into provider operations.

The organizations asked CMS to take action in reducing regulatory incentives that undermine physician independence and limit excessive provider consolidation. Proposed actions included creating payment parity policies across practice settings and prohibiting anti-competitive market tactics such as data-blocking and physician non-compete requirements.

Additionally, the provider advocates asked CMS to consider conducting a Capability Maturity Model Integration (CMMI) that allows providers to contract directly with CMS to insource administrative MA plan functions such as claims processing and fraud detection.

The organizations added that allowing providers to contract directly with CMS could increase the ability for (MA) provider-sponsored health plans to break into the market.

Integrated care models have gained momentum in previous months and could allow payers to successfully manage rising healthcare costs if providers remain enthusiastic about participating in related value-based payment models.