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CMS: Innovative new payment models are coming -- and some will be mandatory

CMS has made it clear that it wants health systems to share the risk of cost and outcomes.

Susan Morse, Managing Editor

In the ongoing push toward value-based care and reducing costs,  the Centers for Medicare and Medicaid Services will be releasing new payment models, according to CMS Administrator Seema Verma.

"You're going to see more models from us," Verma said during a meeting of the Physician-Focused Payment Model Technical Advisory Committee meeting this month.

Some may even be mandatory, according to Alex Azar, secretary for the Department of Health and Human Services.

"We need strategies and models that provide better care at a lower price, not just new models for the sake of new models and not 

new systems of payment for old systems that aren't open to real change," Azar said at PTAC. "In some cases that's going to mean mandatory models from CMMI and other mandatory reforms."

Requiring participation can be necessary to determining whether a model really works, but it may also be necessary to meet what HHS sees as an urgent need for reform, he said.

CFOs should expect more risk-sharing

Forthcoming models will be focused on high cost areas such as end-stage renal disease, cancer care, chronic disease and other serious medical conditions, Verma said. 

CMS has also made it clear that providers need to be ready to take on more risk. In August the agency proposed an overhaul of the accountable care organization Medicare Shared Savings Program. The proposed rule would limit upside risk for two years. Currently, the 561 ACOs in MSSP can share in the savings of the program for six years.

More than 100 ACOs are expected to drop-out under the new rules. If the move to risk means fewer ACOs, "that's OK with us," Azar said. 

The MSSP ACOs have not delivered significant savings, Azar said, a statement contested by the National Organization for ACOs. Those showing the best results took on downside risk and the best performing ACOs tended to be physician-run, rather than hospitals.

"Without real accountability, we're just offering bonuses on top of payments that may be too high already," Azar said. "That's why we have now proposed to simplify the ACO system into two tracks, requiring them to take on risk sooner."

Verma said her concern was that only 14 percent of providers in the Medicare program are taking on risk.

Yes, there's an upside to more risk

The good news for participants moving into risk is that they will get regulatory breaks, more telehealth and the carrot of qualifying for bonus payments from the advanced alternative payment model under MACRA.

Azar said the agency is committed to lessening the regulatory burden for physicians. Unnecessary quality measures should be replaced with measures such as artificial intelligence in EHR data, he said.

New payment models will come out of the Centers for Medicare and Medicaid Innovation, where Adam Boehler took over as director in April. Azar also appointed Boehler as senior advisor for value-based transformation and innovation.

The Center for Medicare and Medicaid Innovation plays a critical role in implementing new payment models and evaluating their effectiveness.

Soon after he took, Boehler said he went through the agency's payment models with a fine-toothed comb to end those that didn't work or to double-down on those that did.

CMS has a list of 82 innovation models on its website, some ongoing, such as the Next Generation ACO model, and some, such as the nursing home value-based purchasing demonstration, listed as no longer active.

Boehler has already introduced his first model to help combat the nation's opioid crisis, the Integrated Care for Kids Model. It links behavioral, physical and other child providers.

"There will be multiple others we'll introduce soon," Boehler said at PTAC. 

In fact, he said, some of the models under consideration were put forward by the physician payment model committee that was formed by Congress when MACRA replaced the sustainable growth rate formula.

PTAC has suggested models around chronic kidney disease, primary care redesign and serious illness, Boehler said. 

"They're active," he said, presumably in reference to a June 13 letter from Azar that said HHS would not be implementing any of the ten Medicare payment models recommended by PTAC.

Boehler said the four components of new models will be around the "four Ps." These are patients as empowered consumers; physicians as accountable patient navigators in models that take away burden that doesn't add value; payment for outcomes; and prevention of disease before it occurs.

Lower healthcare costs are the end goal

HHS remains committed in its myopic focus on lowering cost and  improving quality, according to Azar. However, how health systems get there will be up to them. CMS will not be micromanaging them, Azar said.

"The outcome we're aiming for is pretty simple: better healthcare at a lower price," Azar said. 

That is perhaps the only simple aspect. While Azar pointed to progress in executing the transformation the lingering issue is executing broadly on that aim of improving care while also cutting costs. 

"We have more alternative payment models, more coordinated care, and more value-based compensation than ever before. But the results we hope for haven't always materialized," he said. "We also want to take a broad view of how providers can take on risk and earn rewards for good outcomes."

And that will invariably mean hospitals CFOs and operations leaders need to be ready for longitudinal models with real risk but real rewards when they succeed at keeping patients out of high-cost care.

Focus on Innovation

In September, we take a deep dive into the cutting-edge development and disruption of healthcare innovation.

Twitter: @SusanJMorse
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