MACRA Commentary Outlines Barriers to Advanced Payment Models

The Duke-Margolis Center for Health Policy was founded to be a different kind of policy center – one that brings together individuals from many different disciplines to have translational policy impact.  One that transcends the boundaries of Duke University’s Durham campus.

That’s why leaders, faculty, and research staff from both the Washington, DC and Durham campuses came together to comment on the Centers for Medicare and Medicaid Services’ (CMS) proposed rule for implementation of payment reforms.

To understand why a comment like this can have policy impact, we have to understand how the rules are made.  The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) included plans to reform Medicare and Medicaid payment with a quality payment program, ending the Sustainable Growth Rate formula for determining Medicare payments, creating a new framework to reward providers for giving better care (not just more care), and to simplify reporting.

Of course the devil is always in the details – the responsible agency, CMS, then had the job of determining how to make this happen.  On April 27, 2016, CMS issued a 952 page proposed rule to  establish key parameters for the new Quality Payment Program, including Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs), giving about 60 days for public comment.

The team’s commentary to CMS focuses on ways to give more providers access to advanced alternative payment models instead of continuing to create payment policies that are not well aligned with clinicians’ efforts to support higher-value care or prevention-oriented personalized medicine. Payment models that lack reimbursement for electronic consultations, digital health services, and care coordination and that undervalue cognitive services are not, the authors argue, going to help Medicare remain financially sustainable.  Between 2017 and 2019, fewer than a quarter of physicians will have access to APMs, with only 10 percent having access to advanced APMs.

APMs require physicians, practices and systems to take on more risk.  In real world situations, this means that small and medium-sized practices may not be able to implement APMs because their portfolio of business is not sufficiently diverse.  In anticipation, there has been consolidation in many health care markets, with the unintended consequence that some large systems and provider groups have more market power and can actually increase price and costs for private payers. Models need to be developed in the short and long-term that don’t make consolidation the only logical pathway

The authors urge CMS to create better opportunities to participate in APMs, limiting the administrative burden and supporting evidence and learning networks to help level the playing field for practices that are limited in size and scope. In addition, they argue, payment models that encourage coordination between primary and specialty care for patients with specialized needs could save significant resources, since these individuals account for most health care spending.

Because many providers will not immediately be able to participate in APMs, the authors also urge CMS to work to improve performance measures and risk adjustment, making data available in more timely and transparent ways so that providers can know whether their efforts are making a difference and to make data about performance more available.

To support care transformation, they argue, CMS also needs to provide technical assistance to clinicians in terms of best practices, administrative efficiency, and evidence-driven assessment of new payment models.  Without evidence that helps providers and practices understand the drivers of variation in outcomes and inefficiency, it becomes very difficult to determine whether payment reforms are achieving their intended goals.

Approximately 4,000 comments on the proposed rule were submitted and CMS has indicated that they will provide a final rule on November 1. Duke-Margolis’ director Mark McClellan, along with Jeffrey Clough (Medicine), Ziad Gellad (Medicine), Nandan Lad (Medicine), and Barak Richman (Law) signed the letter.  Authors also include Rob Saunders, who manages the Center’s portfolio of healthcare delivery reform projects, Senior Policy Advisor Steve Farmer from George Washington University, and Senior Research Associate Frank McStay.

The positions in this comment represent the opinions of the authors and do not represent the positions of Duke University or the Duke University Health System.  The authors received no funding for their efforts and did not receive any form of financial support or sponsorship for their recommendations.