Public Payers News

CMS Innovation Center’s Role in Improving Value-based Care

Through a wide variety of different programs, the CMS Innovation Center is moving the Medicare program and healthcare at large toward a greater focus on quality instead of quantity of services.

By Vera Gruessner

- As healthcare payers and providers look toward adopting value-based care and move away from fee-for-service payment models, the Centers for Medicare & Medicaid Services (CMS) Innovation Center has been pursuing a variety of new healthcare reimbursement arrangements in an effort to provide more value to Medicare beneficiaries.

Bundled Payment Models

Patrick Conway, M.D., Acting Principal Deputy Administrator, Chief Medical Officer, and Director of the CMS Innovation Center, wrote for The CMS Blog about some of the transformative initiatives taken to renovate healthcare reimbursement and move toward value-based care. The Home Health Value-based Purchasing Model is one way that home health reimbursement can be tied to quality performance benchmarks with an overall goal of ensuring better patient outcomes.

Starting on January 1, 2016, Medicare-certified home health establishments located in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee will be participating in the Home Health Value-based Purchasing Model.

Earlier this year, the CMS Innovation Center also brought more focus toward value-based care by establishing Alternative Payment Models and the Merit-Based Incentive Payment System. The federal government repealed the Sustainable Growth Rate (SGR) formula this past April and passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

These type of healthcare reimbursement methods are geared toward value-based care and rewarding physicians for providing quality care at reduced costs. Repealing the SGR formula and investing in value-based care is also expected to increase the amount of time doctors will spend treating their patients.

Through a wide variety of different programs, the CMS Innovation Center is moving the Medicare program and healthcare at large toward a greater focus on quality instead of quantity of services. The CMS Innovation Center first came onto the scene five years ago in an effort to reduce healthcare costs while at the same time improving the quality of care through performance benchmarks and analysis.

Along with alternate payment systems and the Home Health Value-based Purchasing Model, the Pioneer Accountable Care Organization (ACO) Model has led to significant cost savings for the healthcare industry since its implementation.

The Department of Health and Human Services announced earlier this year that the Pioneer ACO Model brought $384 million in savings within two years. Additionally, the Office of the Actuary has given the Pioneer ACO Model the go-ahead for expanding across more Medicare beneficiaries due to these tremendous cost savings for CMS.

“This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” HHS Secretary Sylvia M. Burwell said in a public statement. “The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the health care system at large.”

The Medicare Shared Savings Program is also taking bits and pieces of the approaches within the Pioneer ACO Model in order to ensure the best care at the right price among Medicare beneficiaries. Acting Principal Deputy Administrator Patrick Conway states that there were 1.3 million fewer hospital-acquired infections between the years 2010 to 2013 and an overall savings of $12 billion.

Some other important value-based care initiatives taken by the CMS Innovation Center include the Comprehensive Care for Joint Replacement model and the Bundled Payment for Care Improvement. The former program is essentially bundled payments for hip and knee replacements set to start in April 2016.

The Comprehensive Care for Joint Replacement is meant to bring greater care coordination by offering more incentive to lower cost and boost quality between nursing facilities, home health agencies, hospitals, and other healthcare providers.

The latest statistics show that more than 1,600 hospitals, rehabilitation centers, and physician groups are participating into the Bundled Payment for Care Improvement model, which manages the reimbursement for entire episodes of care in an effort to reduce spending and improve quality.

“We are pleased with the progress towards transforming our healthcare system into one that is better, smarter, and results in healthier people. But, there is more work to be done. The last five years have seen the most positive delivery system improvements in our nation’s history, and we are committed to accelerating that progress,” Conway wrote.

In an interview with HealthPayerIntelligence.com, Jeremy Earl, Associate at McDermott Will & Emory, spoke about the overall benefits the CMS Innovation Center brought for the healthcare industry including reducing costs and providing more value-based care opportunities.

From the stipulations of the Affordable Care Act such as the formation of Accountable Care Organizations, the CMS Innovation Center has brought even more transformations and reforms for healthcare reimbursement.

“I would say it’s probably the Center for Medicare and Medicaid Innovation that’s the most promising [at reducing healthcare spending]. Particularly, now we’ve seen what they’ve done with bundled payments and the chronic care joint program that they’ve rolled out mandatorily nationally,” Jeremy Earl mentioned.

“The Medicare penalties for hospital readmissions and other efforts from CMS [Centers for Medicare & Medicaid Services] to alter its payment methodologies, particularly through the work of the Center for Medicare and Medicaid Innovation, has made providers more accountable for the quality of care they provide,” he continued. “CMS’s authority to implement these payment reforms is from the Affordable Care Act, so it definitely has played a part in the shift to paying providers for value.”

“This shift, which is a significant development, is also driven by the commercial sector and the expansion into value-based reimbursement and movement away from fee-for-service. I see that all the time in my practice where insurers are looking to align themselves with providers based on cost-effectiveness and also providers who have demonstrated consistent quality.”