CMS outlines reforms to benchmarks, financial incentives to entice providers to participate in models

Value-based care payment models must be adjusted to make it easier for providers to get savings and not lose money, according to a new vision released by the Centers for Medicare & Medicaid Services (CMS).

The agency outlined its vision for payment models in an article in the journal Health Affairs this week. After an exhaustive review of the Center for Medicare and Medicaid Innovation’s (CMMI's) more than 50 models, CMS leaders found major challenges in setting benchmarks that determine cost-saving goals for payment models, and providers find it difficult to accept financial risk without flexibility for caring for certain populations.

The agency also wants to put healthcare equity at the centerpiece in every model going forward.

“From here on, the Innovation Center will embed equity in every aspect of its models by seeking to include more providers serving low- and modest-income, racially diverse and/or rural populations; the Innovation Center will aim to ensure everyone has access to providers at the leading edge of transformation,” the article penned by agency leaders said.

CMS Administrator Chiquita Brooks-LaSure and CMMI Director Liz Fowler were among the article’s authors.

The agency’s vision is guided by a review of every model launched since CMMI was created by the Affordable Care Act more than 10 years ago. The center has launched more than 50 models and is running 28 concurrently.

It found that six models generated statistically significant savings for Medicare: the ACO Investment Model, Home Health Value-Based Purchasing, Medicare Care Choices, Maryland All-Payer, Pioneer ACO and Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport.

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It also found that the home health, ambulance transport, Pioneer ACO and Medicare Diabetes Prevention Program models met requirements to be expanded in their duration and scope.

Creating new incentives for providers is also going to be a major initiative moving forward.

One of the takeaways from the review is that the center must reevaluate how it designs financial incentives and hints that more mandatory models are coming.

“While voluntary models can demonstrate a proof of concept, they limit the potential savings and full ability to test an intervention, because participants can opt in when they believe they will benefit financially and opt out (or never join) when they believe they are at risk for losses,” the article said.

But adding more mandatory models means providers need the tools to take on such risk, one expert said.

“In order to do this successfully, there has to be more partnership,” said Alexis Finkelberg Bortniker, a partner in the healthcare group at law firm Foley & Lardner, in an interview with Fierce Healthcare last month. “It is not that providers don’t want to do this; it is that providers are really not ready and, in some cases, don’t have the tools to implement this successfully.”

More models means more overlap

The review discovered that offering too many models has been an issue.

“Testing too many models at once can create opposing, even conflicting incentives and burden model participants with figuring out the model hierarchies and interactions,” the article said. “Ultimately, this not only makes decisions about joining or continuing to participate in models difficult but also stymies systemic, scalable transformation.”

The center hopes to focus on launching fewer models soon.

CMMI should ensure providers have options for manageable levels of risk and lay out what they need to take on more risk, the article said. This could include waivers and support in transforming care, especially for vulnerable populations.

“This will require the Innovation Center to provide strong, consistent signals and expectations about where CMS is heading in value-based care,” the article added.

CMMI can also change what it defines as success away from just meeting spending and quality targets. Currently, providers in models that lower costs or meet certain quality metrics get a share of any savings and must repay Medicare if they don’t meet the benchmarks.

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But models can instead define success based more on lasting care transformations, the agency leaders said.

A major takeaway for providers is CMS understanding the issues with setting financial benchmarks, which are the spending targets a provider must meet to qualify for savings. CMMI is evaluating options to ensure that models don’t result in overpayment and “exploring opportunities to improve or replace the current risk adjustment methodology,” the article said.

CMMI plans to offer more details on how to install its vision for value-based care in the coming months. For now, it is engaging with stakeholders to develop short- and long-term objectives.

“CMS cannot do this alone, and we look forward to partnering with patients, providers, payers, state and communities to build off the progress made in the last 10 years,” the article said.

The new vision comes as accountable care organization advocates have been worried about a slide in participation in the program stemming back to Trump administration efforts to force ACOs to take on more risk. Groups such as the National Association of ACOs have called for providers to get more shared savings to help buttress any losses.