MARCH 19, 2020

Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
the National Medical Home Summit, National MACRA MIPS/APM Summit,
and the National Medicare Advantage Summit

CMS Selects 205 Applicants for New Emergency Triage, Treat and Transport Model
The Centers for Medicare and Medicaid Services has announced the selection of 205 applicants to participate in the new Emergency Triage, Treat and Transport Model. A final list of ET3 Model participants will be made available after the applicants sign a participation agreement. he model will reimburse emergency services for Medicare fee-for-service beneficiaries when treatment is provided at a facility other than an emergency department. Ambulance care teams will have greater flexibility to address emergency needs following a 911 call. Currently, Medicare only pays for emergency ground ambulance services when beneficiaries are transported to specific types of facilities, most often a hospital emergency department. This creates an incentive to transport all beneficiaries to the hospital even when an alternative treatment option may be more appropriate, CMS said. CMS will test two new ambulance payments, while continuing to pay for emergency transport of a Medicare beneficiary to a hospital ED or other destination covered under current Medicare requirements. The first is for transport to a primary care office or an urgent care clinic; the second allows qualified healthcare practitioners, either in-person or by telehealth, to initiate and facilitate treatment. The ET3 voluntary, five-year payment model allows for a greater range of treatment options and the most appropriate level of emergency care. The emergency room is the most expensive facility in which to receive care. The model may have lower costs for both Medicare and the patient. A patient may always choose to be brought to the ER, CMS said. Under the new model, upon arriving on the scene of a 911 call, ambulance providers may triage Medicare beneficiaries to one of the model's intervention sites. This requires partnering with alternative destinations, such as primary care offices or urgent-care clinics and with qualified healthcare practitioners to deliver treatment in place, either on-the-scene or through telehealth. (Healthcare Finance, February 20, 2020)

The Role of Population Health in Value-Based Care
As value-based care gains momentum, healthcare systems and insurers are looking at care with a new lens. Reimbursement is dependent on positive patient outcomes, not the volume of services rendered. As a result, providers must take a team-based approach to care that focuses on the whole person, not just the conditions that patients present at a given point in time. Within five years, value-based care could be the norm for most patient populations. The Health Care Payment Learning and Action Network, a public-private partnership established by the Centers for Medicare and Medicaid Services, has set aggressive goals. By 2025, they expect 50% of Medicaid and commercial insurance payments and 100% of traditional Medicare and Medicare Advantage payments to be tied to quality and value. Value-based care organizations recognize that a significant key to success is getting the treatment plans right the first time for the right individuals. However, delivering the right care to the right people at the right time, requires providers to have comprehensive knowledge about their patients. To deliver true value-based care, healthcare providers need insight into the characteristics of both individuals and larger groups of patients. Population health management replaces "one size fits all" care with tailored, cost-effective interventions based on patients' risk levels. This approach is well aligned with the goals of value-based care. (Modern Healthcare, February 27, 2020)

Medicare's Shared Savings Program Update

(CMS, retrieved March 2020)

Microsoft Announced a New and Improved Line of Healthcare Provider-Facing Tools
The tech giant introduced a line of solutions designed to streamline operations and bulk out tech capabilities within provider organizations. One solution is a healthcare-specific version of Microsoft Teams -- its workplace communication platform -- that seeks to make it easier for clinicians to schedule and manage consultations, conduct virtual visits, and coordinate with care teams.

Other new tools include a symptom checker embedded into its healthcare chatbot and an augmented cybersecurity solution for connected devices. These services should offer added value to potential healthcare partners looking to provide a more convenient experience for patients, fend off dilemma within healthcare.

Microsoft's new offerings reveal that it's going all in on its enterprise-facing healthcare endeavors. Microsoft's healthcare play largely hinges on the products it sells to health organizations. It's been racing to get its cloud and AI solutions through healthcare company doors, and it counts major partners like health system Providence St. Joseph Health and pharma titan Novartis, for example. (Business Insider, March 11, 2020)

Doctors in Difficulty or Difficult Doctors?
How do you distinguish between 'difficult doctors', who are a real problem, and doctors who are just in difficulty? Difficult doctors tend to be those who lack insight into their behaviour, especially if it falls below what is expected of them, whereas doctors in difficulty tend to be those who are struggling with their career progression or may have external factors in their personal lives, which may negatively affect their performance or capability. A look at the General Medical Council (GMC) website 'Search the Register' area makes interesting reading. Medscape UK looked at a sample of 60 names from the 84 doctors given warnings by the GMC in 2019 and up to and including January 2020. Below is a breakdown of the types of behaviours that warranted the GMC issuing warnings in 2019/2020. (MedScape, March 11, 2020)

MedPAC Suggests Making Medicare Advantage Bonuses Budget Neutral
Medicare Advantage plans are lucrative for insurers, as shown from UnitedHealth Group's earnings report. UnitedHealthcare Group reported strong enrollment in individual Medicare Advantage plans for 2020. In fact, the company's 2020 individual Medicare Advantage annual enrollment results are its strongest ever, UnitedHealth Group CEO David Wichmann said. Within the company's Medicare Advantage offerings including dual eligible growth, UnitedHealth expects to serve nearly 700,000 more people in 2020, the upper end of the range of projected performance. Other insurers are expected to report similar strong MA results when they release their earnings. At least a third of seniors are in MA plans over traditional fee-for-service Medicare and that percentage is expected to grow. The Centers for Medicare and Medicaid Services has allowed the plans to offer more supplement health benefits. (Healthcare Finance, January 21, 2020)

How CMS Can Create More Successful APMs More Quickly

In 2010, Congress created the Center for Medicare and Medicaid Innovation (CMMI) and provided it with significant funding and regulatory flexibility to develop and test Alternative Payment Models (APMs). In MACRA, Congress created incentives for physicians to participate in Medicare APMs and specifically encouraged the creation of more physician-focused APMs. Unfortunately, a decade after creation of CMMI and five years after passage of MACRA:

  • CMS has not created APMs for most Medicare beneficiaries or physicians. The majority of Medicare beneficiaries and the majority of physicians are unable to participate in any Medicare APMs. There is no Primary Care-Focused APM available for most Medicare beneficiaries and their primary care providers, there are no Condition-Based APMs designed to support better ambulatory care by specialists for patients with chronic conditions, and there are no APMs designed for most patients receiving outpatient procedures.
  • CMS APMs have failed to produce significant savings or improvements in quality. To date, most CMMI APMs have actually increased Medicare spending and have not resulted in significant improvements in the quality of care. ACOs in both the Medicare Shared Savings Program and the Next Generation ACO program have failed to achieve significant savings.

The failure to implement successful APMs means that each year, millions of Medicare beneficiaries are being denied the opportunity to receive higher-quality care and the Medicare program is spending billions of dollars more than is necessary.

A new report from CHQPR - How to Create More Successful Alternative Payment Models in Medicare - explains the causes of this problem and what should be done to get payment reform in Medicare back on track.

The Problems With the CMS Approach to Creating APMs

As described in more detail in the report, there are four basic reasons why there are so few successful Alternative Payment Models in Medicare:

  • CMMI has used only a small portion of its funding from Congress for development and implementation of Alternative Payment Models. Over the past decade, less than half of CMMI's total spending, and less than 15% of the funds Congress appropriated for CMMI projects, was used to develop and implement APMs in which physicians could participate under MACRA. Moreover, nearly one-third of the funds spent to develop APMs were used to create variations on ACOs and the Medicare Shared Savings Program, rather than to create completely different types of APMs in which specialists and small and rural physician practices could participate.

  • CMMI uses a slow, expensive process to design and implement APMs. The steps that CMMI follows in choosing, designing, implementing, and evaluating APMs require 7-9 years or more to complete, and CMMI has spent $75 million or more solely on model design and evaluation contracts for each one of the APMs it has developed. The cost and time involved in this process makes CMS less likely to test multiple APMs, causes unsuccessful APMs to continue operating for too long, and prevents successful APMs from being created and expanded more quickly.

  • The APMs that CMS has developed fail to solve the problems with current payment systems. Most of the APMs created by CMS are merely pay-for-performance programs: no changes are made in current fee-for-service payments, and providers receive bonuses or penalties based on whether spending is less than CMS projections. These types of APMs have not given providers the resources or flexibility they need to deliver high-value services to patients that could reduce spending and improve quality. Moreover, these types of APMs can penalize providers for things they cannot control and reward providers for failing to deliver services patients need. There is no evidence that simply increasing the amount of downside risk in APMs will produce greater savings.

  • CMS has refused to implement additional or different APMs. More than 30 proposals for Alternative Payment Models have been developed by physicians, medical specialty societies, health systems, and other individuals and organizations and submitted to the Physician-Focused Payment Model Technical Advisory Committee (PTAC) created by Congress. PTAC has recommended that 16 of these proposals be implemented or tested, but CMS has not implemented or tested any of them and has no plans to do so.

How to Create More Successful APMs in Medicare

Clearly, a different approach to creating APMs in Medicare is urgently needed. There are three things that CMS can and should do to accelerate the implementation of more APMs that will achieve much greater savings for the Medicare program and improve the quality of care for many more Medicare beneficiaries:

#1 Design and Implement Patient-Centered Alternative Payment Models.
Rather than continuing to add more "incentives" and "risk" on top of current fee-for-service payment systems, CMS needs to take a patient-centered approach to designing APMs. How to Create More Successful Alternative Payment Models in Medicare describes the four-step process that should be used for designing a Patient-Centered Alternative Payment Model, and it also describes the four key components needed to create a successful Patient-Centered APM. There is no single Alternative Payment Model that will work for all types of patients and all types of healthcare providers, so multiple APMs will be needed to successfully reduce spending.

#2 Use a "bottom-up" instead of a "top-down" approach to creating APMs.
Physicians and other healthcare providers are in the best position to identify specific opportunities to reduce spending and improve quality for patients and to know what changes are needed in current payment systems to support higher-value care. CMS should encourage a greater role for healthcare providers in the development of APMs through the following actions:

  • Send a clear signal that well-designed APMs developed by physicians and other stakeholders will be tested by CMS. One obvious way to do this would be to implement at least a subset of the 16 APMs that have been recommended by PTAC.
  • Provide data and technical assistance to help physicians and other stakeholders develop good APMs. HHS should either permit PTAC to provide data and technical assistance to APM developers or create a separate mechanism for doing do.
  • Work collaboratively with providers to refine the details of APMs and encourage participation.

#3 Use a more efficient and effective approach for testing APMs.
Similar to the approaches used to encourage innovations in other industries, CMS should select multiple APMs for "beta testing" in order to refine the APMs and determine if they are likely to work before inviting large numbers of providers to participate and committing large amounts of money to extensive evaluations. This would enable design and testing of an APM to be completed within a 4-5 year period rather than the 7-9 years required under the current approach, and it would provide a much higher return on the investment of the funding Congress has made available.

The report also explains the modifications needed to this approach in order to support successful primary care payment reform:

  • Testing of additional primary care APMs should be designed so that every Medicare beneficiary in the country has an opportunity to participate in a patient-centered primary care APM that provides adequate, flexible payments to support high-quality services.
  • Because the biggest benefits of improved primary care will occur beyond the time periods typically used for evaluation, and because the short-term savings for Medicare may not offset the higher payments needed to support good primary care, Congress will need to change the law so CMMI can continue primary care APMs that improve the quality of care even if they do not reduce short-term spending.


Pay for Performance Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, comparative effectiveness, patient safety, bundled payment, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

Annual Medicare Advantage Update

John Gorman
Founder & Former Executive Chairman, Gorman Health Group; Former Assistant to the Director, Office of Managed Care, HCFA, Former Press Secretary and Staff Director, US Representative John Conyers, Jr. (D-MI), Washington, DC