Half of U.S. health care payments to be made through APMs

Learning & Action Network (LAN)

Our Mission: To accelerate the health care system's transition to alternative payment models by combining the innovation, power, and reach of the public and private sectors.


SPEECH: Remarks by Administrator Seema Verma at the Health Care Payment Learning and Action Network (LAN) Fall Summit

Centers for Medicare and Medicaid Services, October 30, 2017

The LAN offers a unique and important opportunity for payors, providers, and other stakeholders to work with CMS - in partnership - to develop innovative approaches to improving our health care system. Since 2015, the LAN has focused on working to shift away from a fee-for-service system that rewards volume instead of quality. We support this move.

We all agree that quality measures are a critical component of paying for value. But we also understand that there is a financial cost as well as an opportunity cost to reporting measures. Until we get to a smaller set of more impactful measures that assess outcomes rather than processes, the burden associated with reporting measures will run the risk of outweighing their intended purpose. We understand the problem…we understand the frustration…and we understand that something needs to be done.

That’s why we’re revising current quality measures across all programs to ensure that measure sets are streamlined, outcomes-based, and meaningful to doctors and patients. This includes a review of the Hospital Star Rating program. And, we’re announcing today our new comprehensive initiative, "Meaningful Measures.”

“Meaningful Measures” takes a new approach to quality measures to reduce the burden of reporting on all providers. It draws on advice and input from the LAN as well as the National Academies of Medicine, the Core Quality Measures Collaborative, and the National Quality Forum. Continued input from the LAN will be critical in this effort.

Our vision is to develop models that promote a patient centered system of care within a market driven health care system. Models should empower consumers to make decisions that are right for them and providers should compete around value and quality. We want patients to be activated shoppers and need to make sure they have the information and the incentives to make decisions that are right for them.


CMS announces new ‘Meaningful Measures’ initiative

By Greg Slabodkin
Health Data Management, October 30, 2017

The Centers for Medicare and Medicaid Services on Monday announced a new initiative intended to streamline quality measures, reduce regulatory burden and promote innovation in the healthcare industry as it transitions from fee-for-service to value-based payment.

The effort, called the Meaningful Measures initiative, is being described as a “new approach to quality measurement.” CMS Administrator Seema Verma made the announcement during a plenary session at the Health Care Payment Learning and Action Network (LAN) Fall Summit in Arlington, Va.

According to the agency, the Meaningful Measures initiative will “involve only assessing those core issues that are most vital to providing high-quality care and improving patient outcomes,” while adding that CMS “aims to focus on outcome-based measures going forward, as opposed to trying to micromanage processes.”

In her presentation on Monday at the LAN Fall Summit, Verma said that CMS is re-examining its “process for conducting quality measurement across the board,” such as implementing the Medicare Access and CHIP Reauthorization Act (MACRA) in a way that minimizes the burden and costs providers face in meeting the requirements.

Jeff Smith, vice president of public policy for the American Medical Informatics Association, was guarded in his assessment of new CMS initiative.

“The goals are laudable, but the talking points have been with us for several years now,” observed Smith. “Measurement depends on agreed-upon definitions of quality, and in an electronic environment, it requires access to and use of computable data. If CMS is going to turn these talking points into reality, it will need to put forth far more resources and commit additional experts to a complete overhaul of electronic quality measures for value-based payments.”


U.S. Health Care System Ties 29% of Payments to Alternative Payment Models

Markets Insider, October 30, 2017

A report released today showed that 29% of total U.S. health care payments were tied to alternative payment models (APMs) in 2016 compared to 23% in 2015, an increase of six percentage points. The report was issued by the Health Care Payment Learning & Action Network (LAN), a public-private partnership launched in March 2015 to drive adoption and alignment of APMs. Payment reform plays a critical role in building a health care system that results in better accessibility, quality, affordability, empowerment, and innovation. Results were in line with the goals of the LAN to tie 30% of total U.S. health care payments to APMs by 2016 and 50% by 2018.

The report marks the second year of the LAN APM Measurement Effort, the largest and most comprehensive of its kind at the national level. The findings capture actual 2016 health care spending from four data sources: the LAN, America's Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association (BCBSA), and the Centers for Medicare and Medicaid Services (CMS) across commercial, Medicaid, Medicare Advantage, and fee-for-service (FFS) Medicare market segments, and categorize them according to the four categories of the original LAN APM Framework.

The LAN APM Measurement Effort determined the following results:

* 43% of health care dollars in Category 1 (e.g., traditional FFS or other legacy payments not linked to quality)

* 28% of health care dollars in Category 2 (e.g., pay-for-performance or care coordination fees)

* 29% of health care dollars in a composite of Categories 3 and 4 (e.g., shared savings, shared risk, bundled payments, or population-based payments)

Report findings show some interesting trends. First, there was a shift away from legacy FFS payments and a marked growth in Category 2, where payments are tied to value. Second, there was a six percentage point increase in alternative payment model payments (Category 3 and 4), bringing total APM spending to approximately $354.5 billion dollars nationally.

"We are encouraged by these results and the great progress being made towards APM adoption," said Trent Haywood, Chief Medical Officer at the Blue Cross and Blue Shield Association. "These findings underscore the importance of the public and private sectors working in concert supporting providers towards APM adoption. We know that providers need information and support from health plans to take on risk. This Measurement Effort helps develop the rationale for continued payment reform, and we as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress."


CMS loses money as Medicare ACOs remain risk-averse

By Maria Castellucci
Modern Healthcare, October 31, 2017

The CMS' Medicare shared savings program paid out more in bonuses to accountable care organizations than the savings those participants generated, as many were unprepared to take on downside risk, new federal data show.

About 56% of the 432 Medicare ACOs generated a total of $652 million in savings in 2016, according to the CMS dataset released last week. However, participant bonuses eclipsed those savings. The CMS paid $691 million in bonuses to ACOs, resulting in loss of $39 million from the program.

"Medicare isn't saving money," said David Muhlestein, chief research officer at Leavitt Partners.

That's because 95% of the Medicare ACOs — or 410 — participated in Track 1 of the Medicare Shared Savings Program, which doesn't require ACOs to take on any downside risk, so they aren't on the hook for penalties if they miss their targets. Just 22 ACOs participated in advanced tracks — Track 2 or Track 3 — with downside risk. In those tracks, the ACO must pay back any losses to the CMS.

ACOs continue to shy away from downside because it's difficult to prepare for. To participate in Tracks 2 or 3, the ACO must show the CMS it has extra capital on hand to pay losses if it misses performance targets.

Acquiring the extra capital is no easy feat, said Allison Brennan, vice president of policy at the National Association of ACOs. Typically, organizations spend millions of dollars to establish an ACO. The organizations usually have to build data analytics tools, enhance information technology and hire care coordinators and additional staff to oversee the venture.

These investments make it challenging for ACOs to free up any extra capital to take on downside risk, Brennan said.


Value of CMS' voluntary bundled-payment program remains unclear

By Virgil Dickson
Modern Healthcare, October 31, 2017

For the third consecutive year, researchers cannot determine whether a voluntary Medicare bundled-pay initiative actually cut costs and improved care.

In a CMS-funded analysis released Oct. 26, the Lewin Group said providers were starting to reap the benefits of the Bundled Payments for Care Improvement initiative, but it's still unclear whether the savings and improved quality actually stemmed from the program.

"Because we are measuring multiple outcomes across the range of model, participant, and episode combinations, by chance alone some results will appear significant, although in reality, they are not true effects of the initiative," the report stated.

The results are disappointing, as BPCI is one of the longest-running programs to transition Medicare from a fee-for-service system to one that focuses on value and quality.

"We still don't know the answer to whether bundled payments improve care," said James Scott, CEO of Applied Policy, a reimbursement consulting firm.


Survey: Only 1 in 4 providers strongly agree EHRs prepared them for new healthcare economy

By Julie Spitzer
Becker’s Health IT & CIO Review, October 30, 2017

PwC's Health Research Institute surveyed 300 healthcare provider executives working at for-profit, nonprofit and government-owned facilities on their experience implementing and using EHRs.

While 31 percent of providers said their organization moved to an EHR as part of a broader business strategy, 69 percent said they did so to meet CMS' meaningful use requirements.

Just 23 percent of providers strongly agree EHRs have helped their organization's population health and value-based care strategies.

PwC Health Research Institute Spotlight; EHRs in the New Health Economy: Essential but insufficient


Clarity on 2017 MIPS: 4 things physicians must do to participate

By Andis Robeznieks
AMA Wire, October 31, 2017

At this point, there are two big items that should be on physicians’ to-do list regarding their 2017 obligations for the new Medicare Merit-based Payment System (MIPS): Verify that they that they are on the right path for their goals for the program; and, if not, take advantage of the “one patient, one measure” reporting option to avoid a 4 percent payment penalty in 2019.

For physicians who have not collected quality-measure data, are confused by the whole MIPS process, or who are just preparing for more active participation in 2018, the minimum reporting option may be the best course of action to take. The AMA “One Patient, One Measure, No Penalty” tutorial offers a step-by-step guide to complete the minimum-reporting process and help physicians avoid a 4 percent Medicare payment penalty for 2019.



By Don McCanne, M.D.

The mission of the Learning & Action Network (LAN) is to “accelerate the health care system's transition to alternative payment models.” In endorsing this concept CMS Administrator Seema Verma uses the rhetoric of “rewarding quality instead of volume” and advancing her vision of “a market driven health care system.” In doing so she introduces the rhetorical concept of “Meaningful Measures.”

The LAN report has shown that there has been an explosion in the growth of alternative payment models (APMs), yes, the APMs called for in MACRA (the SGR replacement). Yet, as typified by the accountable care organizations (ACOs) and the Bundled Payments for Care Improvement program (BPCI), the APMs are not delivering. Even electronic health records (EHRs) were driven more by "meaningful use requirements” rather than population health and value-based care.

The health care reform process has been and continues to be driven by rhetoric, heavily tinged by ideology, without much substance. For years, we’ve been exposed to talking points, but the health care system remains in a quagmire because of the lack of much needed infrastructure changes such as those of a well designed single payer system.

You might want to read Seema Verma’s full speech - beautiful rhetoric calling for freeing us from regulatory burdens while empowering consumers (patients) to “make decisions that are right for them” while “providers compete around quality and value.” Oh, and if you have any idea on how to accomplish that, she invites your input.

Trent Haywood, Chief Medical Officer at the Blue Cross and Blue Shield Association seems to understand what it is all about. “We as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress." It is a portal to sell us more administrative services - a whole lot more.

In the meantime, physicians will face a 4 percent Medicare payment penalty for 2019 if they do not meet the MACRA requirements - a program designed to herd physicians into APMs. Physicians have the option this year of complying with MACRA through MIPS (Merit-based Incentive Payment System) by providing one measure on one patient, and that will allow them to avoid the penalty. That solution must have been quite an intellectual challenge for the policy community.

The LAN goal is to have half of all health care payments through APMs next year even though they do not seem to be working, and they really don’t even seem to understand what they are (thus the “one patient, one measure” escape).

The policy community says that we single payer advocates need to start answering questions about our proposals. Well, we do have the answers in the form of very specific policy proposals. Maybe instead they should provide us with answers about their alternative payment models which will cover half of health care spending next year in spite of the fact that they don't work, and they don’t even seem to understand just what the heck they are.

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