Headlines in Review

Our review of payment updates, policy trends, and any other latest healthcare news about or relating to economics, insurance, and behavioral science.

Equity in Payment

Earlier this year in Health Affairs, Dr. Navathe and Dr. Liao discuss the implications of the announcement of the ACO REACH model and future steps toward equity in payment models. This step is a landmark given that it is the first value-based model announced within the Biden Administration by CMMI. It is novel given that it is the first such model with direct incentives for equity.

Drs. Navathe and Liao outline key model improvements designed to address inequity, specifically the implementation of Health Equity Plans, improvements in care access and financial adjustments based on the Area Deprivation Index (ADI). Providers will be required to create a Health Equity Plan which will detail how the intend to address equity within their organizations. Access to care will be improved by including nurse practitioner services within the model. Finally, the new model will introduce financial adjustments to payment based on the ADI to better incentivize physicians in deprived areas to participate in ACO REACH. The experienced gained through the implementation of this model will inform future efforts to improve value-based payment models.

Mike Chernew on Payment Reform: ACO REACH

CMS Background on ACO REACH

Quality Payment Program's 2020 Final Rule

[2020] CMS released the 2020 Final Rule for their Quality Payment Program on November 1, 2019, including changes to their Merit-Based Incentive Payment System (MIPS) 2020 program that will “gradually prepare clinicians for the MIPS 2022 performance period.” As has been standard since 2017, CMS has again increased minimum score, this time to 45 points to avoid (up to) a -9% penalty. Furthermore, CMS has added three significant changes to their Quality category by 1) modifying measures inventory (i.e. adding, removing, and modifying quality measures); 2) increasing data completeness requirements; and 3) adding specialty measure sets. CMS made changes to their Promoting Interoperability category by 1) removing one bonus measure; and 2) changing definitions of hospital-based groups. The Improvement Activities category was altered by 1) increasing the participation threshold for group reporting; and 2) modifying the list of activities, and changes were also made to the Cost category through revision of two measures (Medicare Spending Per Beneficiary and Total Per Capita Cost). For the first year, MIPS performance scores were made publicly available in 2019.

Changes in Accountable Care Organizations

[2020] Accountable Care Organizations (ACOs) are provider-based networks which utilize analytics and population health strategies to increase efficiency, improve patient outcomes, and reduce healthcare costs. Between 2013 and 2017, ACOs have saved Medicare $3.5 billion USD, with an estimated savings of $740 million USD in 2018, and $406 million in 2019. Despite clear savings, though, only 53 new ACOs joined Medicare’s Shared Savings Program for its January 1, 2020 start date—comparatively less than in previous years. As such, there are now 517 ACOs in the Medicare Shared Savings Program, versus the 561 ACOs in 2019. This drop in participation follows a now-consistent decline.

It also follows 2018 changes to the Medicare Shared Savings Program requiring ACOs to take on financial downside risk sooner—after only two years, as opposed to a previous six-year requirement. It is likely that interest in ACO is decreasing as more organizations are unwilling to take on this downside risk, and as such, there’s new possibility that physicians and hospital systems will fall back into a fragmented fee-for service system and—according to Clif Gaus, Sc.D., president and CEO of the National Association of Accountable Care Organizations (NAACOS)—subsequently lose “any momentum to transform our health system.” NAACOS is continuously urging Congress to review revisions to the Medicare Shared Savings Program so that any further decline in ACO participation might be avoided.

CMS Changes in BPCI Advanced Cohort 2

In October 2018, the Centers for Medicare and Medicaid Services launched their Bundled Payments for Care Improvement Advanced (BPCI Advanced), wherein CMS seeks to improve the quality of care offered to Medicare beneficiaries and reduce expenditures through financial accountability, care redesign, data analysis and feedback, health care provider engagement, and patient/caregiver engagement. The program’s first cohort of participants started with its original October 2018 launch; the second cohort of participants started more recently, on January 1, 2020. 

While most of Cohort 2 echoes what was practiced in and by Cohort 1, CMS has developed several changes: namely, five new bundles, including Bariatric Surgery, Inflammatory Bowel Disease, Seizures, and Transcatheter Aortic Valve Replacement (TAVR) added to inpatient bundles, and outpatient Total Knee Arthroplasty (TKA) added to Major Joint Replacement of the Lower Extremity episodes. Unlike other outpatient bundles—wherein participants can select to participate in either the inpatient or outpatient bundle (or both)—participants cannot select to participate in just outpatient TKA; rather, participants opting to participate in Major Joint Replacement of the Lower Extremity will have both inpatient and outpatient TKE included in their volume. CMS is also adding an Alternative Quality Measure Set for BPCI Model Year 3 (2020).