REGULATORY INTELLIGENCE YEAR-END REPORT - 2021 Health Policy Tracking Service - Issue Briefs Healthcare Reform Payment Reform This Issue Brief was written by a contributing writer. 12/20/2021 Introduction The California Department of Health Care Services (DHCS) released a new proposal for CalAIM in response to stakeholder feedback and changes reflecting the effect of the COVID-19 pandemic. A health system executive indicated that the COVID-19 pandemic has emphasized the need for the health care system to transition to payment reform more fully. Experts argued for the use of value-based payment reform in pediatric care in a recent article in Pediatrics Journal. The Interagency Health Reform Council (IHRC) of Pennsylvania recently presented a recommendation for health care systems in the state to transition to payment reform models to address whole person health reform. Some Affordable Care Organizations, like a Buffalo health care group, are thriving despite the COVID-19 global pandemic. According to a recent report, the value-based care payment market is expected to increase from $1.52 billion in 2020 to $2.273 billion in 2021. By 2025, the market is expected to grow to $4.029 billion at a compound annual growth rate (CAGR) of 15%. In a recent New England Journal of Medicine article, physicians encouraged a swifter transition to payment reform throughout the United States healthcare system to protect primary care. Members of The Commonwealth Fund Task Force on Payment and Delivery System Reform recently discussed policy recommendations regarding payment reform at a 2021 AcademyHealth National Health Policy Conference session. According to a recent report by the Kaiser Family Foundation, total healthcare spending through private health insurance in the United States would decrease by $352 billion in 2021 if private health insurers paid providers based on Medicare rates. Due to the COVID-19 pandemic, individual clinicians participating in Medicare's Merit-Based Incentive Payment System (MIPS) will automatically receive changes under the extreme and uncontrollable circumstances policy. A recent national survey of physicians explored attitudes about the relationship of value in healthcare to the Merit-based Incentive Payment System (MIPS). The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would updates payment policies and rates for skilled nursing facilities. The rule is consistent with the legal requirements to update Medicare payment policies annually. The Internal Revenue Service (IRS) has recognized OneCare Vermont (OneCare), an accountable care organization, as a 501(c)(3) charitable organization operated for non-profit purposes. The American College of Cardiology, Heart Rhythm Society and Society for Cardiovascular Angiography and Interventions recently wrote a letter to the Centers for Medicare & Medicaid Services (CMS) asking for improved transparency in the Merit-based Incentive Payment System (MIPS). According to a recent report from the National Academies of Sciences, Engineering, and Medicine, payment reform is an important part of ensuring access to high-quality primary care for all people in the United States. Elizabeth Fowler, the new head of the Center for Medicare and Medicaid Innovation (CMMI) under President Biden indicated that the way to value-based care is at a critical juncture. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. Eleven healthcare organizations signed a letter to Department of Health and Human Services Secretary Xavier Becerra asking the Biden administration to change reporting and quality requirements for accountable care organizations (ACOs). The Oregon Senate recently passes House Bill 2018 with bi-partisan support. The bill is aimed at keeping health care costs down using insurer and provider incentives. A bipartisan group of 24 members of Congress led by Representatives Terri Sewell and Adrian Smith wrote a letter to the Center for Medicare & Medicaid Innovation (CMMI) asking for increased transparency and public engagement, particularly regarding the scope and duration of demonstration projects. The Biden Administration declined to extend the Next Generation ACO Model through next year. The National Association of Accountable Care Organizations (NAACOS) requested CMS to extend the model. The American Medical Association credited physician advocacy efforts with changes to the Medicare Merit-Based Incentive Payment System (MIPS). Richard Slusky, the former CEO at Mount Ascutney Hospital and Health Center in Windsor, outlined the possibilities for Vermont's all- payer model. The Center for Medicare and Medicaid Services (CMS) released a proposed physician fee schedule increasing the performance threshold for incentives for clinicians under the merit-based incentive payment system (MIPS). CMS released a proposed rule creating a new value-based payment program for end-stage renal disease (ESRD) providers. Several national health care groups sent a letter in support of the reintroduction of the bipartisan Value in Health Care Act. A bipartisan bill that would make changes to the program parameters of Medicare's Alternative Payment Models (APMs) was recently introduced in Congress. The largest alternative payment model in Medicare produced its highest annual savings to date in 2020 according to data released by the Centers for Medicare & Medicaid Services (CMS). According to a recent survey of primary care clinicians, they are concerned about the future of primary care medicine and increasingly support payment reform efforts by the federal government. The Centers for Medicare & Medicaid Services (CMS) announced he Calendar Year (CY) 2022 participants in the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model. South Dakota announced that it will use federal grant money from the Centers for Medicare & Medicaid Services (CMS) toward plans for payment reform aimed at combatting hospital closures, particularly in rural areas. A recent study showed that Medicare beneficiaries with dementia are more likely to receive post-acute care in a skilled nursing facility even under payment reform systems. St. Luke's University Health Network earned shared savings from the federal government by meeting cost and quality metrics while treating Medicare patients in 2020. 2020 performance data revealed that accountable care organizations (ACOs) in the Next Generation (Next Gen) ACO Model collectively saved Medicare $637 million last year. The Center for Medicare and Medicaid Innovation (CMMI) has set sights on transitioning all Medicare beneficiaries and most Medicaid beneficiaries to accountable care systems within the next decade. The United States Government Accountability Office (GAO) investigated Medicare's Merit-based Incentive Payment System (MIPS), finding that over 90% of providers earned a small increase of less than 2% to their Medicare payments from 2017-2019. The National Association of Accountable Care Organizations (NAACOS) released a statement in support of the Centers for Medicare & Medicaid Services' (CMS) decision to delay the overhaul of accountable care organization (ACO) reporting and quality metrics. Experts Support Value Based Payment Systems for Pediatric Care Experts argued for the use of value-based payment reform in pediatric care in a recent article in Pediatrics Journal. They indicated that value-based payment reform is becoming more popular in the pediatric setting as health care stakeholders search for ways to lessen costs of care and improve quality. According to the authors, the payment reforms have not been evenly spread in health care. Most payment reform efforts are concentrated in adult care. They noted, 'The relative lack of child-focused APMs represents a missed opportunity." Children's cognitive and behavioral development can benefit from early life interventions. Those improvements could lead to lower health care costs in the future. The early life interventions need new financing models for sustainability. A recent payment model for pediatric care, the Center for Medicare and Medicaid Innovation's Integrated Care for Kids (InCK) model, utilizes payment reform development. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. The program integrates health care and other sectors of family services. The authors indicated that it 'offers new momentum for child- focused payment reform." They emphasized the need to capitalize on reform opportunities using new cost measures for alternative payment models focused on the value of healthy development for children. They also pointed to the need for increased investment in preventive interventions during critical stages in life. Cost measures are important along with quality measures to create incentives for physicians within payment reform models. The authors defined cost-of-care measures as encompassing the total spending on health care services for a particular time, population, or care setting. Alternative payment models utilized cost measures to keep the spending on care lower than spending would be under a traditional payment system in a pediatric care setting. [FN2] COVID-19 Pandemic Highlights Need for Payment Reform A health system executive indicated that the COVID-19 pandemic has emphasized the need for the health care system to transition to payment reform more fully. Dr. Karen Murphy, Geisinger executive vice president and chief innovation officer, warned against returning to pre-pandemic norms in several aspects of the health care system in the United States. 'When we think getting back to normal, do we really want to go back to the healthcare delivery system that we had last February? | think not. | think we've grown, through our pain and suffering and hard work, which has really been hard for everybody, both personally and professionally," Murphy indicated at the HIMSS' Accelerate Health Series. '| think we can see some silver linings in what we have just experienced, and | think we should see a new normal, as opposed to getting back to the way we were." Among the top lessons Murphy highlighted for the industry was reforming the healthcare payment models. 'When we think about what we did in the healthcare delivery system, we brought it to its knees in a period of hours, not days, not weeks. Before, when we looked at a period of innovation, we looked at plans that went out for weeks and years. 'Now we know we have the capability of being much more nimble than we were before, and we have to grab onto those silver linings so we transform into a better, stronger, higher-quality, much more satisfying for healthcare workers ? a system that is going to develop that is going to take the silver lining of a very difficult time and turn [it] into positive change." Murphy advocated for increased payment reform in the future. She pointed to the negative financial impacts on the health systems from the pandemic, indicating that widely implemented payment reform systems would have helped to lessen the impact. 'We have to commit ourselves to payment reform. What we saw during the pandemic was that healthcare delivery systems and providers reacted in the right manner they did what was right to protect patients," she stated. She pointed to the healthcare systems moving staff from areas of care to shift to care for COVID-19 patients. They canceled elective surgeries and closed clinics to allow the medical professionals to move to where they were most needed during the pandemic. 'And what happened? On a fee for service system we had really financial devastation across the industry," she asserted. 'We have to be advocates to change payment to be more quality based, more value based as we move forward. We have to look at things like population-based payment ? global budgets that will allow us in the healthcare system to deliver a higher level of quality. It will allow us to do the right thing at the right time for our patients." Traditional payment systems are based on payments for each individual service, while payment reform systems pay healthcare professionals for providing high quality of care overall at lower costs. [FNS] PA Council Recommends Payment Reform The Interagency Health Reform Council (IHRC) of Pennsylvania recently presented a recommendation for health care systems in the state to transition to payment reform models to address whole person health reform. The agency was created by an executive order by Governor Tom Wolf on October 2, 2020. According to IHRC, prior to the COVID-19 pandemic, warning signs already pointed to problems with cost, access, and equity within Pennsylvania's health care system. The cost of health care in the state has grown annually at a rate outpacing growth in gross domestic product (GDP). One in two Pennsylvania residents found it difficult to pay medical bills. Premiums and out-of-pocket costs increase annually. IHRC's plan aims to align payment and health care delivery systems, reduce costs and disparities, and better address the needs of the whole person. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. 'The recommendations of the council present a comprehensive look at how to address the needs of all Pennsylvanians and how we can make a healthier Pennsylvania a reality," Gov. Wolf said. 'If we do not consider everything about each person ? their immediate health needs, the conditions they live in, and the environment they grew up in ? we are only treating a small portion of what influences their health and well-being." IHRC's recommendations include the following. The creation of a Health Value Commission to Institute Health Care Cost Benchmarking through legislation. IHRC estimates savings of up to $6.4 billion for Pennsylvania businesses and consumers between 2022 and 2026. Savings would result from using payor and provider performance to establish a cost-growth benchmark. Increased accountability would be required if the benchmark is exceeded. Spending targets would be established to support primary care, behavioral health and value-based payments, what IHRC calls 'the foundations of a well-functioning health care system." The recommendations also address health equity, establish regional accountable health councils for strategic health planning, and integrate social services into the delivery of health care. IHRC would drive quality improvement by making data dashboards public facing. They would include metrics and quality improvement incentives. Additional focus points include aligning value-based purchasing, leveraging state purchasing power to achieve savings, streamlining access to Medicaid to reduce recidivism, and leveraging data-sharing and health-information exchange. The IHRC plans on next identifying a timeline for implementation of recommendations and receiving feedback. It will work with the legislature on areas requiring legislative action and will facilitate alignment across agencies. [FN4] CA Releases Framework for Updated Payment Reform Proposal The California Department of Health Care Services (DHCS) released a new proposal for CalAIM in response to stakeholder feedback and changes reflecting the effect of the COVID-19 pandemic. The CalAIM initiative focuses on broad changes to the program, delivery system, and payment system of the Medi-Cal program. The three goals of the initiative are confronting social determinants of health by addressing whole person care, reducing the complexity of Medi-Cal while increasing its flexibility, and improving health outcomes by changing the delivery system. The original CalAIM proposal was released in October 2019. The agency then welcomed input from stakeholders over multiple meetings. The original implementation date for the CalAIM initiative was January 2021. In light of the COVID-19 public health emergency, the agency pushed back the implementation to January 1, 2022. DHCS concurrently released a document highlighting major changes to the initiative since its first release in 2019. Major changes included adjustments to implementation timelines for proposals. The initiative calls for a phased approach for implementation of the new statewide enhanced care management benefit. Beneficiaries with high needs will transition on January 1, 2022 in Medi-Cal managed care plans in counties with Whole Person Care (WPC) pilots of Health Homes Programs (HHP). Counties without these programs will see managed care plans transitioning to the new system by July 2022. The initiative focuses on joining with communities and considering their needs. Medi-Cal managed care plans will be required to implement a population health management strategy focused on patients. The proposal requires that plans 'must partner with community-based providers to address members' needs." These strategies 'should be developed in coordination with both county behavioral health and public health departments." [FNS] Payment Reform Market Expected to Grow According to a recent report, the value-based care payment market is expected to increase from $1.52 billion in 2020 to $2.273 billion in 2021. By 2025, the market is expected to grow to $4.029 billion at a compound annual growth rate (CAGR) of 15%. The value-based care payment market encompasses sales of value-based care payment services by entities including organizations, sole traders, and partnerships. These companies provide value-based care payment systems for healthcare providers based on the outcome for patients, quality, efficiency, cost, and patient experience of care. The market measures goods and services traded between entities and sold to end consumers of health care. The expected CAGR from 2020 to 2021 is 49.5%. This significant growth is due mostly to companies resuming operations and adapting to the impact of the COVID-19 global pandemic. Experts predict rapid development in value-based health care services, leading to even more significant growth in the market. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. Under value-based healthcare systems, healthcare cost curve and unnecessary health expenditures have decreased to approximately 5.6% on average. UnitedHealth Group, a health insurance company, reported that value-based payments to healthcare providers grew to over fifteen percent for incentives to improve quality of care and efficiency of health system resources. By the end of 2020, $75 billion of UnitedHealth's payments to medical care providers will be under a value-based payment system. The number of Accountable Care Organizations (ACOs) is increasing. The Journal Health Affairs completed an analysis in 2018 showing that over one thousand ACOs existed throughout the United States in 2017. Over 1,400 commercial and government insurance contracts covered over 32 million Americans via ACOs. According to researchers, 'Therefore, rapid expansion in value-based health care services is driving the market by increasing the effective usage of services provided to customers focusing on value-based care model rather than the fee-for-service model." One obstacle to the growth of value-based care is the hesitancy of organizations to take a technological risk on new payment systems. Results of a survey showed that many organizations are hesitant about using artificial intelligence (Al) to accelerate value-based care. A survey of medical executives showed that many healthcare facilities do not have the infrastructure to integrate patient data for value- based care payment systems. These findings could slow the growth the payment reform market. However, researchers noted that growth is tied to popularity of the system, 'Partnerships in value based care are gaining popularity among the providers as these partnerships allow partners such as manufacturers, payers, and provider organizations to co-develop programs, solutions, and initiatives collaboratively for the benefit of patients and healthcare systems. Value-based partnerships assist with conveying the highest value incentive to the healthcare system and society by concentrating on improving patient results with regards to the system and societal total costs." [FN6] Buffalo ACO to Expand Some Affordable Care Organizations, like a Buffalo health care group, are thriving despite the COVID-19 global pandemic. The Greater Buffalo United Accountable Care Organization (GBUACO) earned $3 million in 2020 using a payment reform system. The savings will be shared with local physician groups and hospitals through the ACO payment system. Currently, approximately 150 physicians participate in the organization. It is certified by the state as an ACO. It works under contracts with Fidelis and UnitedHealthcare for $225 million in health care services for 30,800 Medicaid patients. The network earned $1.33 million for Medicaid patients from Fidelis. It eamed an additional $1.1 million for Medicare Advantage and over half a million dollars for special needs patients from UnitedHealthcare. According to Dr. Raul Vazquez, CEO, the organization will see even more success in 2021, due to potential expansion with more physicians and another independent practices association, as well as three IPAs in the state with 150 providers. 'What we're looking at is becoming an aggregator for other IPAs, to put them under our system to better coordinate and do things some of these IPAs can't do on their own, almost like a health care ecosystem 2.0," he indicated. ACOs can access value-based contracts with the state, and so can independent practice associations and individual providers. They can contract with the state by assuming risk and responsibility or may choose to contract with another group. GBUACO took advantage of that model, contracting with managed care organizations to take on the responsibility of the total cost and care as well as patient outcomes for specific populations. IFN7] Task Force Supports Payment Reform Members of The Commonwealth Fund Task Force on Payment and Delivery System Reform recently discussed policy recommendations regarding payment reform at a 2021 AcademyHealth National Health Policy Conference session. The recommendations were in response to the current COVID-19 pandemic and in contemplation of future public health emergencies. The task force also considered care inequalities highlighted by the pandemic. David Blumenthal, MD, MPP, president of The Commonwealth Fund, led the discussion. He was joined by Gregg Meyer, MD, MSc, president of the Community Division and executive vice president of Value Based Care for the Mass General Brigham health care system; Gail Wilensky, PhD, senior fellow at Project HOPE; and Vivian Lee, MD, PhD, MBA, president of Health Platforms at Verily Life Sciences. The task force published a report on policy imperatives for health care delivery system reform in Fall 2020. It made six recommendations including: Increase health system preparedness Increase health system accountability for cost, quality, and equity of health care services Strengthen the underdeveloped primary care infrastructure THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. Support the engagement of patients and communities in their care Reduce administrative burdens and costs Find a balance between the regulatory and competitive approaches in governing local health care markets According to Meyer, regarding the COVID-19 pandemic, 'the truth of the matter is that for us to do anything short of learning all we can from this would be really adding a tragedy on top of one that's already occurred." The task force recommended that the federal government address health care inequities by developing a set of quality measures including performance to promote racial equity. Wilensky noted that the pandemic has shown the need for payment system reform. 'It's really a question of how quickly we can accelerate the movement toward value-based care and also to transfer more of the financial risks to the delivery system" she indicated. The pandemic brought out the problems with fee-for-service medicine when many medical services were not utilized. 'The reliance on fee-for-service medicine not only raised quality concerns, but also financial stability for individual physicians and for the delivery system itself." Wilensky pointed to the need for two-sided risk in payment reform systems and support from the federal government. She continued, 'We've all recognized that when we're forced to change in a hurry because of circumstances that are imposed on us, like being in a pandemic, the system is actually more adaptable and more flexible than some of us may have assumed prior to last spring." The task force was in favor of implementing value-based care to make primary care more sustainable and more widely available. According to Meyer, during the spring of 2020, 'to the extent that payments were based on fee-for-service, when the volumes dropped down, essentially, to zero-there were doctors who were struggling to make payroll for the folks working in their practices, furloughing employees, shutting down sites, decreasing access," meanwhile, 'those who had more of a stream of revenue based on capitated payments or subcapitated payments or other risk arrangements that fronted money to them, they were able to weather that storm much better." Meyer indicated that payment reform systems serve the health care industry better during a crisis. He pointed to a hybrid approach as the best choice overall, combining prospective payment approaches and modest levels of traditional payment systems. 'Delivery systems and physicians, groups of physicians, should be paid partly on the basis of the number of people that they take care of-but having part of the payment reflect the actual utilization of care is also important," Wilensky stated. [FN8] Physicians Recommend Shift to Payment Reform In a recent New England Journal of Medicine article, physicians encouraged a swifter transition to payment reform throughout the United States healthcare system to protect primary care. The authors cited the role of primary care in high-value healthcare and the 'troubling declines in the financial viability of primary care practices" as reasons for the need to shift from a traditional fee-for-service payment system to payment reform that values quality of care. According to recent surveys, 20 to 30% of respondents from primary care practices were at risk for sale, permanent closure, or consolidation. Safety-net practices were particularly at risk. The share of total health expenditures in the U.S. has become increasingly smaller for primary care providers. The authors noted, 'In this context, questions about how best to pay for primary care, how much to pay, and how rapidly change needs to be implemented have reemerged as urgent considerations." The authors criticized traditional fee-for-service payment systems as a 'retrospective, piecemeal approach to payment [that] leaves clinicians trapped in a volume-maximizing culture that leads to rushed visits, wasteful practices, and high rates of clinician burnout." Further criticisms of traditional fee-for-service payment systems include stifling innovation in care delivery, and undermining integration with behavioral health and community services. [FNS] MIPS Automatic Changes Due to COVID-19 Due to the COVID-19 pandemic, individual clinicians participating in Medicare's Merit-Based Incentive Payment System (MIPS) will automatically receive changes under the extreme and uncontrollable circumstances policy. The Center for Medicare & Medicaid Services recently announced the decision to automatically apply the policy. Individual MIPS eligible clinicians will receive a neutral payment adjustment in 2022. MIPS eligible clinicians who submit 2020 performance data as an individual in two or more performance categories will not automatically receive the exception, nor will clinicians working for practices that report as groups. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. CMS indicated that group participation in MIPS is optional. Individual MIPS eligible clinicians within a practice will automatically qualify for the exception policy of the practice cannot submit 2020 performance period data as a group. For those practices, CMS will consider all four performance categories at zero percent, leading to a neutral payment adjustment in 2020. Clinicians submitting 2020 performance data as an individual in two or more performance categories or groups for at least one performance category will not receive the automatic exception. The deadline for the MIPS extreme and uncontrollable circumstances application is March 31, 2021. CMS decided to widen the exception policy because of the COVID-19 pandemic and its effect on clinician performance. Most COVID-19 metrics have improved overall. However, physician practices have also seen declines in patient visits and hospital diagnostic services and procedural volumes, according to healthcare consulting firm Kaufman Hall. At the beginning of 2021, most performance measures had declined below 2019 levels. The decline in new patient visits is expected to significantly affect the rate of growth of physicians' practices. The pandemic's effect on clinician performance has impacted value-based reimbursement payment models including MIPS. The MIPS value-based reimbursement track bases physicians' Medicare payments on performance in four categories of metrics: Quality, Promoting Interoperability, Improvement Activities, and Cost. MIPS has been in effect since 2017. Since that time, CMS has adjusted the track to encourage clinician participation. Due to the COVID-19 pandemic, CMS has had to significantly adjust the metrics to ensure that clinicians are not penalized for performance negatively affected by the public health emergency. CMS has added a COVID-19 clinical data reporting measure, added a doubled complex patient bonus, and expanded the use of telehealth codes. Under the extreme ad uncontrollable circumstances metric, clinicians are not penalized for failing to submit the correct data to CMS. If eligible clinicians submitted data for two or three performance categories, they will receive a MIPS final score and payment adjustment in 2022 based on the data submitted. They will not be able to change or cancel the submitted data. However, groups that have only submitted data for one performance category can apply to CMS to recalculate the performance categories. Qualifying groups include small practices that received automatic scores as a group on Medicare Part B claims during 2020. [FN10] Report: Healthcare Spending Would Decrease Significantly if Private Insurers Adopted Medicare Rates According to a recent report by the Kaiser Family Foundation, total healthcare spending through private health insurance in the United States would decrease by $352 billion in 2021 if private health insurers paid providers based on Medicare rates. Current reimbursement rates to healthcare providers through private health insurance are significantly higher than Medicare rates. Researchers found that the change would result in a 41 percent decrease from the $859 billion projected cost of private insurance healthcare spending for 2021. Employers would likely save $194 billion, employees would save $116 billion, and people who purchase individual health insurance plans would collectively save $42 billion. Forty-five percent of the total reduction in spending would come from outpatient hospital services. The difference in pay rates between private insurance and Medicare in these settings is large. Twenty-seven percent of the savings would come from inpatient services and the remaining fourteen percent would be from physician office visits. Approximately one third of the savings would result from spending for health services for people in the 55-64 age group. They tend to use more healthcare services than younger people. The average savings per person with private health insurance coverage would be $2,096 for adults and $1,033 per child. Both federal and state lawmakers have proposed basing private health insurance payments on Medicare rates. Implementation of the idea could fall under several initiatives, including Medicare for all, a public option, decreasing the age for Medicare eligibility, and all-payer rate setting. [FN11] Proposed Rates for Skilled Nursing Facilities The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would updates payment policies and rates for skilled nursing facilities. The rule is consistent with the legal requirements to update Medicare payment policies annually. The facilities affected would include the Skilled Nursing Facility (SNF) prospective payment system (PPS) for fiscal year (FY) 2022. It also includes proposals for the SNF Quality Reporting Program (QRP), and the SNF Value-Based Program (VBP) for FY 2022. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. The proposed payment changes would increase Medicare Part A payments to SNFs in FY 2022 by approximately $444 million. The update of the payment rates of 1.3 percent is based on a 2.3 percent SNF market basket update, minus the 0.8 percent forecast error adjustment and a 0.2 percent multifactor productivity (MFP) adjustment. The proposed reduction to SNF PPS rates due to the recent blood-clotting factors exclusion is $1.2 million. The impact figures do not include SNF Value-Based Program reductions, estimated at $184.25 million in FY 2022. CMS implemented a new case-mix classification model, the Patient Driven Payment Model (PDPM) in October 2019. This payment model was implemented in a budget neutral manner, not affecting the aggregate SNF spending. However, it resulted in an unintended increase in payments of approximately 5 percent, or $1.7 billion in FY 2020. CMS indicated that the COVID-19 global pandemic might have affected the data for the analysis to achieve budget neutrality under PDPM. CMS wishes to recalibrate the PDPM parity adjustment to account for the effects of COVID-19 accurately. The agency is soliciting broad public comments on the methodology. It is considering delaying or gradually phasing in adjustments. In the proposal, CMS suggested rebasing and revising the SNF market basket to improve payment accuracy under the SNF PPS. It would update the PPS payment rates based on the 2018 market basket. The new consolidated billing requirements for SNF PPS exclude some blood clotting factors, items, and services for the treatment of patients with bleeding disorders. To account for this exclusion, CMS is proposing a proportional reduction in the Medicare Part A SNF rates, resulting in the estimated decrease of $1.2 million in aggregate Part A SNF spending. The proposed reduction is aimed at offsetting the increase in Part B spending because the items and services will no longer be part of SNF consolidated billing. According to the agency, 'CMS is working to further the mission to improve the quality of healthcare for beneficiaries through measurement, transparency, and public reporting of data. The SNF QRP and CMS' other quality programs are foundational for contributing to improvements in health care, enhancing patient outcomes, and informing consumer choice. We believe that advancing our work with use of the FHIR standard offers the potential for supporting quality improvement and reporting which will improving care for our beneficiaries. We are seeking feedback on our future plans to define digital quality measures (dQMs) for the SNF QRP. We also are seeking feedback on the potential use of Fast Healthcare Interoperability Resources for (QMs within the SNF QRP aligning where possible with other quality programs." [FN12] Survey Explores Physician Attitudes about MIPS A recent national survey of physicians explored attitudes about the relationship of value in healthcare to the Merit-based Incentive Payment System (MIPS). Researchers performed the survey to gather physician perspectives concerning the drivers of value in four categories: quality, improvement activities, promoting interoperability, and cost. Researchers mad the following findings from the survey of physicians: Most believed that value would be improved by activities in the 4 MIPS domains of quality (55%), improvement activities (70%), promoting interoperability (54%), and cost (71%). Process quality was the most frequently selected driver in the quality (77%), improvement activities (70%), and promoting interoperability (70%) domains. They concluded that physicians believing that MIPS domain activities would improve value in healthcare had most confidence in process improvement activities rather than other forms of containing costs. Researchers utilized a nationwide web-based survey in collaboration with the American College of Physicians. They received responses from 726 internal medicine physicians between March 22 and May 7, 2017. They primarily analyzed the responses to four questions regarding MIPS domains and whether activities in those domains improved value. Physicians were asked which mechanisms, quality, patient experience, and/or cost accounted for the improvement in value. About half of the respondents indicated that quality or productivity affected their compensation. Most respondents agreed that value would be improved by activities in at least one of the four domains: -quality (55%; n = 399) -improvement activities (70%; n = 503) -promoting interoperability (54%; n = 385) -cost (71%; n = 509). 'FN13) Cardiologists Ask for Improved Transparency for MIPS The American College of Cardiology, Heart Rhythm Society and Society for Cardiovascular Angiography and Interventions recently wrote a letter to the Centers for Medicare & Medicaid Services (CMS) asking for improved transparency in the Merit-based Incentive Payment System (MIPS). THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. Dozens of United States healthcare organizations signed the letter as stakeholders affected by MIPS. They requested that CMS release MIPS cost measure data from the prior three years. The organizations also requested that all cost measure benchmarks for 2021 and in the future be made available on a close to real time basis on a rolling schedule. 'We are very concerned that CMS has never published MIPS cost measure benchmarks, despite using these metrics to evaluate physician and group performance in the MIPS Cost Performance category," the groups wrote. 'Because the benchmarks have not been published, physicians cannot compare their spending to the target in the current performance period or prior periods, nor can they determine whether the benchmarks are fair and valid, accounting for variations in resource use that are within a physician's control. Moreover, physicians cannot identify opportunities to reduce spending or best practices for providing efficient care." The organizations also pointed to the need for detailed information concerning MIPS cost measures so that healthcare providers can identify opportunities for improved cost savings and areas in need of performance improvement. They asked CMS to provide information regarding quality benchmarks in an ongoing manner. 'Since CMS releases updated benchmarks with significant changes to individual measure in the middle of the performance period, physicians and group practices may need to readjust or revise their reporting strategy well after the start of the performance period," the groups wrote. 'This inconsistency leads to confusion and inability to focus on improvement. CMS should release the quality measure benchmarks at least 30 days prior to the start of the performance period and hold harmless physicians by moving to pay-for-reporting when significant updates to benchmarks are made during the performance period." [FN14] Vermont Accountable Care Organization Working to Promote Payment Reform Qualifies as Non-Profit The Internal Revenue Service (IRS) has recognized OneCare Vermont (OneCare), an accountable care organization, as a 501(c)(3) charitable organization operated for non-profit purposes. The organization applied for the qualification with the IRS. It requested 501(c)(3) status due to its commitment to supporting the health care delivery system in Vermont and its efforts toward payment reform. The organization called the designation by the IRS 'a major milestone for the organization, and a testament to the organization's commitment to transparency and value based reform efforts." According to Vicki Loner, RN.C, OneCare CEO, 'OneCare has always operated in the spirit of a non-profit organization in alignment with its non-profit founders and many of its participating organizations. We are pleased that our status will accurately reflect our operations and our commitments to the system changes that are necessary to achieve better health outcomes for Vermonters." OneCare Vermont was able to meet the requirements to become a charitable organization by lessening the burden on the government. Its partnership in the All-Payer Accountable Care Organization Model (APM) furthered this goal. Additionally, the organization's promotion of improved health through the transition to value-based care, improved primary care delivery supports, health care innovation, and primary prevention programs helped the organization to achieve charitable organization status. John Brumsted, M.D., OneCare Board Chair indicated, 'This is a recognition of OneCare's status as a provider-led organization in service to the people of Vermont. Achieving 501(c)(3) designation from the IRS affirms our commitment to advance the important work of supporting the way health care is delivered and reimbursed in our state." The charitable organization designation, combined with OneCare's strategic planning effort and the Scott Administration's APM Implementation Improvement Plan, to help the organization work toward the organization and its provider partners' goals of payment and delivery reform. OneCare Vermont is an accountable care organization led by health care providers. It works to improve the health of Vermont residents while at the same time it works toward lowering the cost of care. The organization's partners include health insurance companies, hospitals, independent medical practices, and community collaborators. Together, they offer programs that incentivize positive outcomes and fund healthcare activities. OneCare allows physicians and other health care providers access to data, resources, and tools to improve patient health. Participants in OneCare, particularly health care providers, join to share resources and expertise to improve the health of Vermont residents. They help to improve access to primary care, work toward reducing deaths from suicide and drug overdoses, and manage chronic illness. N19) New CMMI Head Says Value-Based Care at Critical Juncture Elizabeth Fowler, the new head of the Center for Medicare and Medicaid Innovation (CMMI) under President Biden indicated that the way to value-based care is at a critical juncture. Under the Biden administration, some models testing value-based payments in healthcare have been paused or ended. According to Fowler, these actions do not point to a loss of interest in the mission of CMMI to move toward payment reform. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. Fowler said that the agency will focus on fewer models that are more targeted. 'In my view, we're at a really critical juncture in the path to value-based care,' Fowler said at the National Association of Accountable Care Organizations' spring conference. The agency was created through the Affordable Care Act with the goal of moving toward payment reform in healthcare, where providers are rewarded for quality of care rather than quantity of care. Fowler noted that changing the traditional fee-for-service system is not easy. The agency has a role to incentivize that change through alternative payment models, particularly with the effect of the COVID-19 pandemic on healthcare providers. Fowler has experience in health policy. She held leadership roles at HHS and assisted in writing and implementing the ACA while on staff at the Senate. CMMI recently paused some payment reform models and delayed the implementation of other models. '| understand that collectively these announcements may have raised questions about where the center is headed next,' Fowler stated. 'True innovation means failing until we get things right.' CMMI will focus on more creative ideas in a complex area of many models. Fowler indicated that, in the future, development will not necessarily be based on evaluating payment models. The Medicare Payment Advisory Commission recommended last Fall that the agency consolidate the trial programs and focus on long- term goals for payment reform. CMMtl's strategy has involved certifying models and implementing them through Medicare. Fowler criticized that approach as limiting. Since the beginning of the agency, only four models have survived the process to become permanent payment systems in Medicare. As many as 50 models have been tested. Few of these models have resulted in savings or improved quality of care. Over a year ago, a bipartisan group of legislators called for increased oversight of the agency. Fowler wants providers to become more proactive in the shift to payment reform systems and to assume greater risk. She does not support broad incentives for providers. 'What happens when the model goes away and the payment ends?' Fowler asked. 'Payments for the sake of payments may not generate that transformation that we're seeking.' IFN16] Report Recommends Payment Reform for Care Equity According to a recent report from the National Academies of Sciences, Engineering, and Medicine, payment reform is an important part of ensuring access to high-quality primary care for all people in the United States. Researchers pointed to reforming payment models, expanding telehealth services, and supporting integrated, team-based care, as integral to achieving care equity. The report also recommends the formation of a Secretary's Council on Primary Care and an Office of Primary Care Research at the National Institutes of Health (NIH). The new report, Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care, provides an implementation plan for primary health care that is cost-effective and high quality. According to the report, all individuals should have the opportunity to have a consistent source of primary care, regardless of insurance status. Researchers asserted that health insurance providers should require all covered individuals to annually declare their source of primary care. Researchers recommended payment reform to strengthen care delivery and payment for primary care providers. Payment systems need to better support independent practices and team-based care. It's time we invest in health care as a lifelong relationship, rather than as a series of transactions. Primary care has the potential to improve health and health equity for all of society, and the way we pay for it should reflect that," said Linda McCauley, dean of the Neil Hodgson Woodruff School of Nursing at Emory University and co-chair of the committee that wrote the report. 'If we are to recognize high-quality primary care as a common good, it requires accountability structures, which this report clearly outlines." The committee recommended payment reform for public and private sectors, first to hybrid models, part traditional payment systems and part capitated that reward providers for better outcomes per patient. Over time, payment reform should become the default. Researchers also encouraged CMS to aim toward increasing payment rates for primary care services by fifty percent by identifying overpriced health care services in other areas of care. [FN17] Oregon Senate Passes Accountable Care Bill THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -10- The Oregon Senate recently passes House Bill 2018 with bi-partisan support. The bill is aimed at keeping health care costs down using insurer and provider incentives. The legislation is focused on maintaining a consistent health care cost growth rate to lower overall costs for patients. The measure also passed Oregon's House with bi-partisan support. The bill is based on previous legislation, SB 889, a measure that created the Health Care Cost Growth Benchmark aimed at cost control measures for the rapid increase in health care expenditures in Oregon. That law, passed in 2019, led to the creation of recommended benchmarks. The Implementation Committee also created a final report on the program logistics. The program was implemented in February 2021. Under this current pending legislation, an 'accountability mechanism" for providers and insurers would facilitate lowering costs. Jeremy Vandehey, the director of the health policy and analytics division at the Oregon Health Authority (OHA) spoke about the intent of the measure. The transparency concept is aimed at keeping insurers and providers accountable for remaining at cost-growth targets. If costs continue to grow at an unreasonable rate, the OHA will implement mandated improvement plans. Insurers and providers could then face a financial penalty, according to Vandehey. 'With the passage of HB 2081, we can get to work in earnest and begin to limit how much our state's overall health care costs grow annually. We believe this is one of the key strategies to help Oregon families struggling with health care costs and a deeply important step towards eliminating health inequities," noted Vandehey. The initial 5 years will have a cost growth target of 3.4%. In the following 5 years, the cost growth target will be 3%. The current growth rate is 6.4%. Vandehey pointed out that meeting the cost growth targets could save $16 billion over the next 6 years. The OHA joined with the Oregon Health Leadership Council to create a voluntary compact with health care stakeholders about the use of value-based payments. They also agreed on the transparency necessary to achieve and enforce cost-growth targets. The compact included over 45 organizations in mid-April. Many of the largest health systems and insurers in Oregon were participants, as reported by OHA. According to Becky Hultberg, president and CEO of the Oregon Association of Hospitals and Health Systems, 'While we have voiced some concerns about the details of how HB 2081 would be implemented, Oregon's hospitals support the goals of the Health Care Cost Growth Target program. There has been significant progress made through thoughtful discussion and collaboration, and we hope that process continues as we create a system that works for all Oregonians." Eric Hunter, CEO of CareOregon, noted, 'These growth targets are an important and critical first step towards addressing these cost trends in an innovative way. We must start somewhere, and | commend the efforts to move this work along in a way that involves all of the different parts of Oregon's health care system." N14 Organizations Ask for Changes to ACO Reporting and Quality Requirements Eleven healthcare organizations signed a letter to Department of Health and Human Services Secretary Xavier Becerra asking the Biden administration to change reporting and quality requirements for accountable care organizations (ACOs). The groups cited rushed implementation, unanswered questions on changes, and negative consequences to patient care. 'The changes ignore the time it takes to adopt and implement electronic measures," the letter states. 'Therefore, key policy changes and additional time are needed to ensure that ACOs can participate successfully, and that patient care is not negatively impacted.' The organizations pointed to the uncertainty in the healthcare industry due to the ongoing COVID-19 pandemic. They indicated that the timing was problematic for the release of the 2021 Medicare Physician Fee Schedule, which confirmed the change to electronic quality measures for ACOs, and other requirements. The changes will require ACOs in the Medicare Shared Savings Program to collect data from unintegrated electronic health records (EHR) systems, and report on quality data from all patients regardless of payer. These requirements apply to data from non-ACO providers and patients without a connection to an ACO. The groups warned that the changes could widen health disparities due to misrepresentation of quality performance. The changes are to be implemented in 2021 and 2022. 'ACOs treating vulnerable populations have a different mix of payers and patients, which will cause them to appear to have lower quality," the letter states. 'This will reduce their shared savings at a time they should be receiving more resources to combat health equity issues and more support to remain on the path to value.' THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -11- A recent survey by the National Associations of ACOs indicated that 75 percent of ACOs are concerned about the changes. [FN19] CMS to End Next Generation ACO Model The Biden Administration declined to extend the Next Generation ACO Model through next year. The National Association of Accountable Care Organizations (NAACOS) requested CMS to extend the model. NAACOS released a statement expressing disappointment about the decision, calling an extension of the program a 'top advocacy priority." The organization indicated, 'We understand the constraints and narrow timeframe the CMS Innovation Center had to work under to prolong the model and disagree with findings in formal evaluations, which we believe were flawed. However, we appreciate today's move to allow Next Gen ACOs a limited opportunity to apply for Direct Contracting to starting next year. This will be a viable path for some to continue participation in an innovative accountable care model like Direct Contracting. Non-Next Gens won't be granted this limited exception unless they have already applied and deferred their exception." NAACOS will continue to advocate for a permanent ACO model like Next Gen. The organization emphasized the importance of a better bridge between MSSP Enhanced and the full capitation option under Direct Contracting. The organization suggested that the Centers for Medicare & Medicaid Services (CMS) consider exercising Innovation Center authority to try out successful and popular parts of Next Gen with the Shared Savings Program. According to NAACOS, Next Gen ACOs have saved Medicare over $1 billion over the CMS-generated benchmark. Next Gen ACOs have also netted $616 million to the Medicare Trust Fund after accounting for shared savings, shared losses, and CMS discounts. NAACOS called the program successful and urged policymakers to build upon that success. [FN20] The Next Generation ACO Model will end December 31, due to CMS's decision not to extend the program. The payment model began on January 1, 2016 as an initiative for experienced ACOs. The program allowed participants to take on higher levels of financial risk and reward than offered through the Medicare Shared Savings Program. Currently, 41 ACOs participate in the model. Participants face three initial performance years and two optional one-year extensions. NAACOS urged the federal government to make the program permanent. The Trump administration agreed to extend it through 2021. CMS sent a letter to participants recently indicating that the model would end this year. Next Generation model participants will be able to apply for the Global and Professional Direct Contracting Model, which includes two voluntary risk-sharing options. Contrary to the claim from NAACOS, evaluations conducted by NORC at the University of Chicago, an independent research organization, showed no net savings for Medicare from the model. A recent report showed that the model reduced gross Medicare spending by 0.9% but increased net spending by 0.3% when accounting for shared savings payments. Advocates for the model argued that it handled the pandemic well when it 'deployed the necessary infrastructure, information sharing, waivers, and tools to respond to and prevent the spread of disease." [FN21] Legislators Ask CMMI for More Transparency A bipartisan group of 24 members of Congress led by Representatives Terri Sewell and Adrian Smith wrote a letter to the Center for Medicare & Medicaid Innovation (CMMI) asking for increased transparency and public engagement, particularly regarding the scope and duration of demonstration projects. The legislators aim to ensure that the agency is reducing health care costs, addressing health disparities, and improving the quality of care delivered for beneficiaries as much as possible. 'The Innovation Center is a critical tool in improving the quality and efficiency of our health care system, especially for rural and underserved communities where innovation is made more difficult by limited resources," said Rep. Sewell. 'l am proud to lead this bipartisan push to increase the Innovation Center's transparency and public engagement and ensure that it is delivering on its promise of value-based health care focused on positive outcomes." 'Innovation is key in health care, and CMMI has an important role in improving health care delivery for the future," said Rep. Smith, lead Republican co-signer. 'However, for such innovation to take place we also need transparency and accountability from CMMI, which is why this letter urges CMMI to increase public engagement and participation and provide more detailed plans to enhance its models." Congress and stakeholders have sometimes found the CMMI model development process opaque. The agency has a statutory requirement to gather input from interested parties. This requirement has not always been followed, according to the legislators. The legislators want more external expertise for CMMI demonstrations for maximum effectiveness. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -12- Sewell noted, 'The letter requests that CMMI increase transparency in all its processes and put greater reliance on the use of present data to immediately understand the impact of models on healthcare providers and patients. " [FN2] Vermont Hospital CEO Outlines Possibilities for Payment Reform Richard Slusky, the former CEO at Mount Ascutney Hospital and Health Center in Windsor, outlined the possibilities for Vermont's all- payer model. Slusky also served as director of payment reform for the Green Mountain Care Board for six years. He directed the information as an open letter to the Green Mountain Care Board, OneCare, and the Scott administration regarding Vermont's all-payer model. It was in response to recent reports that the Vermont all-payer model is not reaching financial and clinical targets after four years. Slusky recommended that the state consider changing the plan and/or the administrators of the plan. Slusky noted, 'I think the principles upon which the all-payer ACO model is based are still worth pursuing." He defined those principles as to: -provide quality health care services to as many Vermonters as possible under the auspices of a collaborative health care system that is focused on the health of the population and not on the volume of services provided. -transition from a fee-for-service payment model to 'value-based" payments that offer providers a secure revenue flow as long as they meet reasonable targets for patient access, improved quality, and cost containment. -improve the health of Vermonters by increasing access to primary care, lowering the prevalence of chronic disease and reducing deaths from suicide and drug overdose. Slusky indicated that a recent state auditor's report showed inadequacies in communication for the ACO, OneCare's purpose or value for the system related to its costs. He argued that 'there is clear evidence significant improvements need to be made in the way costs are defined, calculated, reported, and measured against targets." He criticized Vermont hospitals for continuing to operate as separate entities rather than the success of the entire health system in the state. He made the following suggestions to improve payment reform in Vermont: -form a group to evaluate the progress of the all-payer model -identify successes and challenges -provide specific recommendations for changes to the system The stakeholder group should address transitioning to value-based payments without reconciliation from all payers, increasing the numbers of Vermonters attributed to the model, evaluating the sufficiency and manner of payments to primary care practices, increasing funding of care-coordination and chronic-care management on a community level, consider the incorporation of payments for social determinants of health such as housing, transportation and supplemental food payments under state waiver agreements with Medicare, encourage self-insured employer plans to engage with the model and to voluntarily submit payment information to the all- payer claims database, and evaluate the pros and cons of restructuring OneCare and its governing board to be more independent. [FN23] AMA Highlights Changes to MIPS The American Medical Association credited physician advocacy efforts with changes to the Medicare Merit-Based Incentive Payment System (MIPS). The changes to the program are aimed at making metrics more clinically relevant, less burdensome and more transparent. The advocacy efforts have also targeted regulatory and financial relief for physician practices facing economic hardships due to the COVID-19 pandemic. According to the AMA, 'Most notably, these efforts resulted in the Centers for Medicare & Medicaid Services (CMS) recent decision to reweight the MIPS cost performance category to 0% of the final score for practices and physicians who report quality, promoting interoperability, or improvement activity data for the 2020 performance year." The changes to the metrics will protect physicians from unfair evaluations under the MIPS cost performance category. The MIPS scoring system is designed to reward health care providers for improving the quality of care. In response to the COVID-19 pandemic, CMS began a policy allowing MIPS participants to request a reweighting of the performance categories. The categories include quality, cost promoting interoperability, and improvement activities. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -13- Physician advocacy also led to CMS's decision to automatically apply an extreme and uncontrollable hardship exception to MIPS eligible health care providers. They were not penalized for being unable to submit data. The AMA noted, 'In its more recent decision to reweigh the cost category to 0%, CMS acknowledged the negative financial impact COVID-19 has had on practices, which included severe drops in the volume of patient visits. It also prevented physicians from being unfairly penalized for services associated with caring for patients diagnosed with COVID-19 during the pandemic." The organization asserted that the financial relief measures will allow for short-term mitigation. However, long-term changes to the system are still needed to address ongoing issues for care providers. IFN24] CMS Proposes Rule for Payment Reform Program CMS released a proposed rule creating a new value-based payment program for end-stage renal disease (ESRD) providers. The rule also updates Medicare rates for renal dialysis services. The ESRD Prospective Payment System (PPS) will change the ESRD Treatment Choices (ETC) Model, a mandatory value-based payment model. ETC began in January 2021. The changes are focused on health and socioeconomic disparities. CMS indicated that these disparities contribute significantly to chronic kidney disease. The changes will create incentives for facilities and physicians participating in the payment model. The incentives are aimed at improving rates of home dialysis and kidney transplants for Medicare beneficiaries with lower incomes. The ETC Model is the first CMS Innovation Center model aimed at health equity. 'Health equity is at the center of our work here at CMS," CMS Administrator Chiquita Brooks-LaSure, stated in a press release. 'Today's proposed rule is grounded in measures to ensure people with Medicare who suffer from chronic kidney disease have easy access to quality care and convenient treatment options. When CMS encourages dialysis providers to offer more options for Medicare patients to receive dialysis treatments, it can be life changing and lead to better health outcomes, greater autonomy and better quality of life for patients with kidney disease." The proposed rule would increase ESRD PPS increase base rates in the 2022 calendar year. The increase and other updates to reimbursement would increase total payments to facilities by 1.2 percent. ESRD facilities in hospitals would see an estimated 1.3 percent decrease in total payments. Freestanding facilities would see total payment increases of 1.2 percent. A wage index update and the two-year transition to the Office of Management and Budget (OMB) delineations will also affect total ESRD Medicare payments. The proposed rule would extend the time facilities are required to report data under the ESRD Quality Incentive Program (QIP) from September 2020 to September 2021. This change is due to the impact of the COVID-19 pandemic. The agency also proposed limiting the use of some quality measures, including the standardized hospital ration clinical measure and the standardized readmission rate clinical measure during 2022. The proposed rule would exclude the 2020 performance year from performance standards for the future. Comments on the proposed rule are due by August 31, 2021. [FN25] New MIPS Payment Schedule Increases Threshold for Incentives The Center for Medicare and Medicaid Services (CMS) released a proposed physician fee schedule increasing the performance threshold for incentives for clinicians under the merit-based incentive payment system (MIPS). The new standard for incentives would match the requirements for MIPS under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The proposal of the first seven MIPS Value Pathways signals that CMS is transition toward the next implementation of the Quality Payment Program. The initial proposed MVP clinical areas include: -rheumatology -stroke care and prevention -heart disease -chronic disease management -lower extremity joint repair -emergency medicine and anesthesia. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -14- Under the proposal, CMS is also suggesting a revision to the current eligible clinician definition to expand to clinical social workers and certified nurse-midwives. These workers often serve acute healthcare needs. The regulation would also implement a recent statutory change allowing Medicare to make direct payments for Physician Assistants for medical services provided under Medicare Part B. Physician assistants would be able to bill Medicare directly starting in 2022 for the first time. This change would expand access to care and reduce administrative burdens. Currently, the physician assistant's employer must bill Medicare for the services. Through this change, MVPs will be able to compare performance across clinician types and give relevant feedback, according to CMS. Under MACRA, which received bipartisan support in 2015, physicians can choose between two tracks for participation in the Quality Payment Program. The MIPS system has its own benchmarks. The advanced alternative payment model includes more risk to participating clinicians. The Quality Payment Program has both financial incentives and disincentives aimed at promoting high-value care. [FN26] Bipartisan Legislation for Payment Reform Introduced A bipartisan bill that would make changes to the program parameters of Medicare's Alternative Payment Models (APMs) was recently introduced in Congress. Representatives Suzan DelBene (WA-01), Peter Welch (VT-At-large), Darin LaHood (IL-18), and Brad Wenstrup (OH-02) reintroduced the Value in Health Care Act. The legislation aims to increase participation in value-based health care programs to improve the quality of care and health outcomes for beneficiaries while decreasing the cost of care. According to a U.S. Health and Human Services Inspector General report in 2017, 98 percent of Accountable Care Organizations (ACO) participating in models for three or more years met or exceeded quality measures. Changes were made to the ACO program in 2019, leading to decreased participation for the first time since the program began in 2012. ACOs participating in Medicare's ACO program in 2019 reached their highest annual savings since the program's inception. Net savings were $1.4 billion. ACOs have saved Medicare a net $2.5 billion since 2012. 'Physicians and hospitals participating in APMs are driving the change in health care we so desperately need. The Value in Health Care Act makes sensible modifications to the existing APM parameters and encourages more providers to participate. This ultimately helps seniors by improving the quality of care and outcomes," indicated DelBene. 'ACOs in Washington were critical to providing coordinated care for seniors during the pandemic and we should continue to incentivize these models in our communities." The pending legislation changes the APM and ACO parameters with the following parameter shifts: Encourages participation in the Medicare ACO program by increasing the percent of shared savings beginner participants receive. Program changes under the previous administration decreased shared savings, making the program less attractive. Modifies risk adjustment to be more realistic and better reflect factors participants encounter like health and other risk variables in their communities. Removes barriers to ACO participation by eliminating arbitrary program distinctions so all participants are participating on a level playing field. Supports fair and accurate benchmarks by modifying performance metrics so participants aren't competing against their own successes in providing better care. Provides greater technical support to ACO participants to cover the significant startup costs associated with program participation. Incentivizes participation in Advanced APMs by extending the annual lump sum participation bonus for an additional six years. Corrects arbitrary thresholds for Advanced APM qualification to better reflect the existing progress of the value-based movement and to encourage bringing more patients into this model of care. Addresses overlap in value-based care programs so that APM overlap within markets complement each other rather than cause confusion. Sheds light on healthy equity by directing the GAO to study health outcomes of seniors assigned to ACOs compared to seniors in regular fee-for-service. 'Accountable Care Organizations are vital to our work to drive down health costs in this country - which are far too high. By using a more collaborative approach to health care, we can improve both quality and efficiency in patient access and care. We need to encourage value, not volume of services," noted Welch. 'ACOs deliver better care for a better price, and we should continue working to make sure that they succeed." 'The Value in Health Care Act is a commonsense proposal that includes substantive reforms to encourage and support greater participation by health care providers in ACOs, particularly in our rural communities in central and west-central Illinois," asserted THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -15- LaHood. 'By incentivizing the use of these value-based health models that support coordinated care between doctors, hospitals, and other health care providers, this legislation will improve health care access and the quality of care for seniors and patients across my district, which is critical as we recover from COVID-19." 'It's important that we give health care providers additional flexibility if we're going to successfully transition our health care system into one that prioritizes the value of positive patient outcomes over just the sheer volume of services provided," said Wenstrup. 'Our bipartisan legislation helps accomplish that and puts our health care system on a better track to keep patients healthier for lower costs." Providers participating in quality improvement programs through MACRA can join either an APM or the Merit-Based Incentive Payment System (MIPS) to receive incentives to improve the quality of care and value. [FN27] Health Groups Support Value in Health Care Act Several national health care groups sent a letter in support of the reintroduction of the bipartisan Value in Health Care Act. The Value Act focuses on strengthening the Medicare Shared Savings Program and rewarding ACOs. It will increase the shared savings rates, update risk adjustment rules, eliminate the artificial distinction between 'high" and 'low' revenue ACOs, address ACOs' 'rural glitch," and restart the ACO Investment Model. 'The Value in Health Care Act of 2021 makes a number of important reforms to strengthen Medicare's value-based care models and Accountable Care Organizations to ensure that these models continue to produce high quality care for the Medicare program and its beneficiaries as well as to generate savings for taxpayers," stated the organizations in the letter. Signatories included AHIP, American Academy of Family Physicians, America College of Physicians, American Hospital Association, American Medical Association, America's Essential Hospitals, AMGA, America's Physician Groups, Association of American Medical Colleges, Federation of American Hospitals, Health Care Transformation Task Force, Medical Group Management Association, National Association of ACOs, and Premier. [FN28] Survey: Primary Care Physicians Support Payment Reform According to a recent survey of primary care clinicians, they are concerned about the future of primary care medicine and increasingly support payment reform efforts by the federal government. The Primary Care Collaborative released the results of the survey along with the Larry A. Green Center and 3rd Conversation. The poll included 702 primary care clinicians in the United States. Four in ten clinicians were concermed that primary care would be gone in five years. One in five reported that they expected to exit the field within three years. 'As the federal government updates guidance to keep COVID-19 at bay, it also needs to implement strategies to support primary care, which is a vital ally in the vaccination effort," Ann Greiner, president and CEO of the Primary Care Collaborative, indicated. At the time of the survey, 76% of clinicians reported the strain of COVID-19 related changes and pressures was low to moderate. According to Greiner, clinicians were 'just not hopeful about what the future holds." Thirty-six percent of primary care clinicians reported being constantly lethargic, struggling to find joy in anything and struggling to think clearly. Thirty-eight percent of clinicians faced staff shortages and trouble maintaining patient volume. Over half of clinicians reported an adequate supply of COVID-19 for their patient populations. Fifty-three percent indicated that vaccine hesitancy is high and difficult to combat. A significant number of respondents supported the federal government's role in improving primary care. Forty-six percent of clinicians supported policy changes transitioning to payment reform and away from fee-for-service models. Fifty-six percent of respondents supported policymakers protecting primary care. 'Primary care is the front door to the health care system for most Americans, and the door is coming off its hinges," Christine Bechtel, co-founder of 3rd Conversation, noted. 'The fact that 40% of clinicians are worried about the future of primary care is of deep concern, and it's time for new public policies that value primary care for the common good that it is." Greiner indicated that specialists also support strengthening primary care through legislation. In some areas, a lower capacity in primary care has led to overflows in specialty care of patients who could be treated by primary care clinicians. Greiner urged primary care clinicians and other stakeholders to 'make the case to decisionmakers about the importance of primary care." "They are successfully doing that state after state," she stated. 'Also, we are getting some traction at the federal level. I'm confident we can tum the current picture around.' N?9l Payment Reform Program Created Largest Savings to Date in 2020 THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -16- The largest alternative payment model in Medicare produced its highest annual savings to date in 2020 according to data released by the Centers for Medicare & Medicaid Services (CMS). The Medicare Shared Savings Program is a payment reform model and accountable care organization (ACO) with 10.6 million senior beneficiaries in 2020. The program saved Medicare $4.1 billion last year. After accounting for shared savings payments, it saved the program $1.9 billion. The ACO members also reached an average quality score of 97.8 percent. Sixty ACOs earned a perfect quality score of 100. In 2019, MSSP netted $2.6 billion in gross savings and $1.2 billion in net savings for Medicare. 'Today's data underscores the need for policymakers to do all they can to grow the ACO model and extend the program's benefits to more patients,' said Clif Gaus, Sc.D., president and CEO of the National Association of ACOs (NAACOS). 'We currently have the fewest number of Shared Savings Program ACOs since 2017. That trend must be reversed, given continued debate about ways to improve our health system.' ACOs are a move away from the traditional fee-for-service payment system. Groups of doctors, hospitals, and other health care providers join to take responsibility for the cost and quality of care for a specific set of patients. If they generate savings by meeting spending and quality metrics, they receive a share of the savings from Medicare. In 2020, participation in the voluntary Shared Savings Program through Medicare was 513 ACOs. According to NAACOS, the decrease in ACO participation was due to Trump-era policies, such as the 2018 'Pathways to Success," a program limiting the time ACOs had before assuming financial risk and decreasing the share of savings paid to health care providers. The Value in Health Care Act (H.R. 4587) would increase shared savings rates for providers, change adjustment and benchmarking policies in favor of providers, and increase the neutral period before required risk-taking to three years. Additional significant metrics from the recently released ACO data include: $390 in gross savings per beneficiary 345 out of 513, or 67 percent, of ACOs earned shared savings ACOs earned $2.3 billion in shared savings payments 75 percent of shared savings-only ACOs produced gross savings and 55 percent earned shared savings. [FNSO} South Dakota to Use Grant for Payment Reform Program South Dakota announced that it will use federal grant money from the Centers for Medicare & Medicaid Services (CMS) toward plans for payment reform aimed at combatting hospital closures, particularly in rural areas. The initial grant money was $2 million. The South Dakota Department of Social Services will receive up to $5 million from CMS for rural healthcare. The agency will focus on improving services for Medicare and Medicaid beneficiaries. The money will also go toward improving hospital technology. Organizations in other states also received CMS grants targeting disparities in rural healthcare, including the Texas Health and Human Services Commission, University of Alabama at Birmingham and Washington State Healthcare Authority Each grant was $2 million for an initial pre-implementation phase. An addition $3 million will be available to each organization that achieves a series of milestones over six performance periods. South Dakota will use the money to transition physician reimbursement for Medicare and Medicaid services to a payment reform system that rewards physicians for quality of care rather than volume of care. A payment reform system will allow healthcare providers increased flexibility in times of uncertainty and upheaval in the healthcare system, like during the COVID-19 pandemic. The grant money is targeted to prevent hospital closures. According to the Center for Healthcare Quality and Payment Reform, 24 percent of rural hospitals in South Dakota are at risk of closure. The grant money will also support purchasing of telehealth equipment and expansion of maternity care. [FN31] CMS Announces Participants in Payment Model The Centers for Medicare & Medicaid Services (CMS) announced he Calendar Year (CY) 2022 participants in the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model. According to CMS more than two times the number of participants enrolled in the model payment systems in 2022 compared to 2021. The VBID Model was designed to test many MA health plan innovations aimed at improving the quality of care for Medicare beneficiaries. Beneficiaries with low incomes were particularly considered, including dually eligible beneficiaries and beneficiaries eligible for Low Income Subsidy (LIS). THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -17- Under the Model test, MA plans will offer additional supplemental benefits, reduced co-payments, and rewards and incentives intended to improve health and health equity through meeting social needs. These needs include food and transportation, and other benefits aimed at encouraging enrollees to participate in health-related activities. The benefits are also aimed at reducing financial barriers to access to measures that improve health. VBID Model participation grew significantly in CY 2022. Enrollment also had significant growth in CY 2021 and Cy2020. For the upcoming year, the VBID Model includes 34 participating MA organizations (MAOs), in increase from 14 in 2020 and 19 participants in 2021. The participants will test the Model in 49 states, DC, and Puerto Rico through 1,014 plan benefit packages (PBPs), up from 30 states and Puerto Rico with 157 participating PBPs in 2020, and 45 states, DC, and Puerto Rico with 451 participating PBPs in 2021. An estimated 7.8 million beneficiaries are expected to be enrolled in participating PBPs in 2022. Enrolled beneficiaries increased from about 1.2 million in 2020 and 4.6 million in 2021. Thirteen of the 34 MAOs participating in 2022 will join the Hospice Benefit Component. This is four more than in 2021. The Hospice Benefit Component began in 2021. CMS noted, In participating in this voluntary Model component, MAOs are incorporating the Medicare hospice benefit into MA covered benefits while offering comprehensive palliative care services outside the hospice benefit for enrollees with serious illness. Each participating MAO included as part of their palliative care strategy the following: palliative care consults, comprehensive care assessments and services provided by an interdisciplinary care team, care planning and goals of care discussions, advance care planning, 24/7 access and support, psychosocial and spiritual support, pain and symptom management, medication reconciliation, caregiver support and a focus on ensuring access to social services and community resources. In addition, participating MAOs are able to provide individualized, clinically appropriate transitional concurrent care through in-network providers and offer hospice-specific supplemental benefits. The VBID Model was initiated in January 2017. It will be tested through December 2024. The main purpose of the model is testing whether creating specific flexibilities in coverage and payment for MAOs aimed at promoting MA health plan innovations will reduce costs for the Medicare program and improve the quality of care for Medicare beneficiaries, including dual-eligible beneficiaries. The testing will also measure the efficiency of health care service delivery. Changes to the VBID Model were made to test additional flexibilities for modernizing the MA program. [FNS2] ACO Earns Medicare Shared Savings St. Luke's University Health Network earned shared savings from the federal government by meeting cost and quality metrics while treating Medicare patients in 2020. The organization will share $18.6 million in savings with the government. The hospital received one-half of its savings, $9.2 million. The organization received a 100% quality score while saving costs treating older and disabled Medicare beneficiaries. It was the only health network in its immediate area (Lehigh Valley) in 2020 to receive a perfect quality score and earn a payment from the Medicare Shares Savings Plan (MSSP). The Centers for Medicare & Medicaid Services (CMS) administers the program. 'St. Luke's achieved this remarkable accomplishment by keeping costs lower than expected even as it delivered the highest quality care,' says Ken Berkta, MD, Family Physician and Vice President of Clinical Integration at St. Luke's. Accountable care organizations (ACOs) are health care providers that join voluntarily to provide high-quality services and simultaneously save money. They serve Medicare and Medicaid beneficiaries. St. Luke's created an ACO that includes over 1,700 physicians and advanced practitioners. They serve 45,000 Medicare patients. Patients who access care through Medicare or Medicaid can choose primary care physicians who participate in ACOs. Medicare predicted that the cost of patient care in the St. Luke's network in 2020 after accounting for the effect of the COVID-19 pandemic would be $470 million. The actual cost of care ended up reaching $451 million, with a savings of over $18 million. At the same time, the organization received a perfect quality score of 100%. The quality of care was high despite less access to preventive care testing for a large part of the year due to pandemic related shutdowns. The organization credited the following initiative with improving quality of care and reducing costs: Proactive care management services driven by artificial intelligence (Al) analytical tools to identify patients at higher risk for poorer outcomes Use of evidence-based, patient-centric clinical protocols developed by physicians and other clinical leaders across the spectrum of care including hospital, outpatient, home care, and skilled nursing facilities THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -18- Real-time clinical decision support tools in the electronic health record to aid in the ordering of the most cost-effective tests Focus on preventive care services and other initiatives to reduce avoidable hospitalizations and readmissions St. Luke's is a regional non-profit network with over 17,000 employees at 12 hospitals and 300 outpatient sites. It has a yearly net revenue of over $2.6 billion. It serves 11 counties in Pennsylvania and New Jersey. [FN33] Dementia Patients Receive Post-Acute Care in Skilled Nursing Facilities Under Payment Reform A recent study showed that Medicare beneficiaries with dementia are more likely to receive post-acute care in a skilled nursing facility even under payment reform systems. Researchers from the University of Pennsylvania published the study in JAMDA. They collected data from the Medicare program spanning from 2013 to 2016. They compared which beneficiaries received home health care and which recipients were sent to a skilled nursing facility for post-acute care over time. Researchers found that 32% of all fee-for-service Medicare beneficiaries receiving post-acute care were diagnosed with dementia. Seven out of ten of these beneficiaries received post-acute care in a skilled nursing facility. Similar trends were evident in the Medicare Advantage program. Lead author Robert E. Burke, M.D. hypothesized that dementia patients in need of post-acute care were vulnerable to potential changes in the availability of that care due to payment reform efforts. However, researchers found that major payment reform initiatives implemented during the study period did not affect the availability of post-acute care for Medicare beneficiaries. Payment reform initiatives included: -Bundled Payments for Care Improvement in 2013 -Hospital Readmission Reduction Program (which included lower extremity joint replacement as a targeted condition in 2013) -Comprehensive Care for Joint Replacement model in 2015. Researchers were also surprised to find that payment reform efforts did not change treatment protocol for common diagnosis groups, such as joint replacement patients. They received similar levels of post-acute care under fee-for-service payment systems and under payment reform systems. 'These results, in combination with our current findings, could suggest SNF is over-used in this population," the authors asserted. 'High rates of SNF use among individuals with dementia may not translate to high-value care, particularly when it comes to severe dementia at the end of life." However, they indicated, an increased level of support is needed for patients diagnosed with dementia receiving post-acute care at home. 'Otherwise, this could shift the burden of post-acute care onto families and informal caregivers at home without necessary supports," they noted. [FN34] CMMI Favors Accountable Care The Center for Medicare and Medicaid Innovation (CMMI) has set sights on transitioning all Medicare beneficiaries and most Medicaid beneficiaries to accountable care systems within the next decade. The agency announced the goal during a recent webinar. CMMI also released a white paper outlining the plan to transition Medicare and Medicaid to value-based payment systems. It will focus on innovative payment models. CMM1 is not currently planning on halting models. However, according to CMMI Director Liz Fowler, the agency 'will guide revisions to existing models, as well as consideration of future models.' Eventually, the agency will reduce the number of models. CMMI will also address issues of burdensome or complex benchmarks within current models. Providers have expressed concern over these issues. 'In addition to reducing overlap, we also want our models to be simpler and easier to participate in with less administrative burden,' Fowler indicated. 'While there might be fewer models, they will move towards total cost of care approaches that will require a focus on advanced primary care and ACOs,' she continued. According to CMS Administrator Chiquita Brooks-LaSure, plans include 'an unwavering focus on equity, to pay for health care based on value to the patient instead of volume of the services provided, and deliver affordable, person-centered care.' The agency's objectives include driving accountable care, advancing health equity, supporting innovation, addressing affordability and partnering to achieve system transformation. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -19- The Affordable Care Act created the innovation center in 2010 with the goal of transitioning the healthcare system to a more value- based payment system. It tests new payment and service models in Medicare, Medicaid and the Children's Health Insurance Program. It has tested over 50 models. The center focuses on health equity as well as the transition to accountable care. Plans include evaluating the impact of payment models on underserved communities. The agency also wants to increase participation in the payment models for safety net providers. According to Ellen Lukens, director of policy and program groups at CMMI, they want to 'ensure that eligibility criteria and application processes don't inadvertently exclude or disincentivize care for specific populations.' Provider groups were in favor of the proposed goals. The Primary Care Collaborative noted that accountable care relationships are a foundation to primary care. Smaller and independent practices could benefit. Jeff Micklos, executive director of the Health Care Transformation Task Force noted that CMMI 'properly recognizes providers' and payers' desire for greater value-based payment model consistency across all populations they serve, which is likely to lead to a more predictable and sustainable value-based ecosystem.' The National Association of ACOs was in favor of the plan of the goals. It also stated that CMS should increase the Medicare Shared Savings Program, the permanent ACO model. [FN3S] Next Generation ACO Model Saved $637 Million 2020 performance data revealed that accountable care organizations (ACOs) in the Next Generation (Next Gen) ACO Model collectively saved Medicare $637 million last year. The 37 participating ACOs reached an average quality score of 96.5 percent. They served 1.1 million seniors. Some of the savings went back to ACOs as shared savings for reaching cost and quality benchmarks. After shared losses and discounts, the Next Gen program netted $230 million in savings to Medicare in 2020. In 2019, the Next Gen program saved $519 million and netted $194 million to Medicare after shared savings and losses. Savings have increased every year since 2016, leading to over $1.66 billion in gross savings and $836 million in net savings. According to Clif Gaus, Sc.D., president and CEO of the National Association of ACOs (NAACOS), 'The impressive Next Gen Model results are the latest illustration of the success of Medicare ACOs, benefiting patients, providers and taxpayers alike. Recent ACO results coupled with an enhanced commitment to accountable care from the Biden administration represent a notable paradigm shift toward achieving healthcare transformation.' CMS declined NAACOS' request last year to make the Next Gen program permanent. It is scheduled to sunset at the end of 2021. NAACOS is strongly in favor of CMS creating a new full-risk option for ACOs under the Medicare Shared Savings Program (MSSP). A full risk and capitation option within MSSP has only been available in Innovation Center ACO models. The suggested 'Enhanced Plus" option would encourage ACO participation through a full risk and capitation option within MSSP. The new model would add benefit enhancements and incentives and create a middle option between MSSP and Direct Contracting. 'Many Next Gen ACOs aren't moving into Direct Contracting and have expressed a desire to have an ACO option that allows them to more gradually move toward capitation without feeling like they're taking a step backward in their transition to value-based payment models,' said Gaus. 'CMS could use its waiver authority under the Innovation Center to create a new MSSP option we call 'Enhanced Plus,' much like it did with Track 1+, which was very popular and successful.' [FN36] NAACOS Supports CMS Decision to Delay Reporting and Quality Metrics Changes The National Association of Accountable Care Organizations (NAACOS) released a statement in support of the Centers for Medicare & Medicaid Services' (CMS) decision to delay the overhaul of accountable care organization (ACO) reporting and quality metrics. CMS delayed the planned overhaul by one year. NAACOS has lobbied for the delay for over a year, citing several potential negative consequences to patient care. The overhaul is a transition to electronic clinical quality measure (eCOM) reporting. In the statement, NAACOS indicated, 'We appreciate CMS listening to ACOs, providers, and the health IT vendor community on the need for more time and additional changes. We hope the agency uses the next three years to make further refinements to the policy to make it workable, fair, and an accurate representation of the quality of care ACOs provide. Ensuring high-quality care is a hallmark of ACO programs, so it's important that any changes not create unintended consequences." The organization was also in favor of CMS's decision to minimize administrative and financial burdens for repayment mechanism requirements. The agency cut in half the amount of a required financial guarantee for ACOs choosing to move to a risk-based model. The organization supports further burden reduction from CMS throughout the MSSP. NAACOS had hoped that CMS would utilize the regulation to adjust the ACO benchmark and risk adjustment policies. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -20- NAACOS called current program methodologies 'flawed." The organization noted, 'We hope the agency will take action in rulemaking as soon as possible and not wait another full year. Specifically, NAACOS supports removing ACO-assigned beneficiaries from ACOs' regional reference populations and capping risk scores in an ACO's region at the same level of the ACO. Both of these changes, which are long overdue, will help create more fair and accurate spending targets for ACOs." Last year, CMS finalized a transition to eCOMs for ACOs. The change required ACOs in the Medicare Shared Savings Program (MSSP) to aggregate data from disparate electronic health record systems. These systems are not interoperable. ACOs were required to report quality data on all patients for all payers. There are issues surrounding collecting data from providers that are not part of the ACO and patients with no direct connection to the ACO. The change could negatively affect health disparities. ACO quality performance could be misread due to variation from patient access to care or complexity rather than actual quality of care from the ACO. NAACOS performed a survey earlier this year, finding that almost 75 percent of MSSP ACOs were either 'extremely concerned" or 'very concerned" about the new requirement to implement eCOMs or Merit-based Incentive Payment System (MIPS) CQMs next year. Eighty-five percent of ACOs responding to the survey indicated that aggregating data from ACO participants' electronic health records would be burdensome under reporting requirements. [FNS7] GAO and MIPS The United States Government Accountability Office (GAO) investigated Medicare's Merit-based Incentive Payment System (MIPS), finding that over 90% of providers earned a small increase of less than 2% to their Medicare payments from 2017-2019. GAO also reported that providers noted strengths as well as challenges of the incentive payment system. Some providers pointed to aspects that assisted smaller practices. Other providers were uncertain about the effect of the program on quality of care. MIPS increases or decreases Medicare payments to providers based on the cost and quality of care provided to beneficiaries. MIPS providers receive a final score that depends on performance in four categories, including quality and cost of care. Providers receive a rating of negative, neutral, or positive based on the final score and a performance threshold. They receive a payment adjustment based on the rating. Providers who achieve the exceptional performance threshold may receive a larger payment adjustment. GAO found that final scores were usually high. About 93 percent of providers earned a small positive adjustment. The largest payment adjustment was 1.88 percent. Approximately 72 to 84 percent of providers earned exceptional performance bonuses. Providers identified strengths and challenges in the MIPS program. They pointed to bonus points as a help for small practices or providers that might be otherwise disadvantaged. Some of the stakeholders questioned the effectiveness of the program to improve quality of care or health outcomes. They indicated that the program incentivizes reporting over quality improvement. Providers might choose to report more on quality measures where they are doing well and less on areas needing improvement. CMS pointed to the MIPS Value Pathways (MVP), a new program in 2023 that will address some of the challenges. It will standardize performance measurement in specific specialties, for some medical conditions, and episodes of care. It will develop clinically cohesive sets of measures and activities. GAO performed the study under a provision in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) that allows for an examination of the MIPS program. [FN38] © Copyright Thomson/West - NETSCAN's Health Policy Tracking Service [FN2] . Counts, Nathaniel Z., Kamila B. Mistry and Charlene A. Wong, "The Need for New Cost Measures in Pediatric Value-Based Payment," Pediatrics Official Journal of the American Academy of Pediatrics, January 2021, available at https://pediatrics.aappublications.org/ content/early/2021/01/08/peds.2019-4037. [FN3] . Lovett, Laura, "Geisinger's chief innovation officer on why healthcare shouldn't go back to normal," Mobi Health News, January 14, 2021, available at https://www.mobihealthnews.com/news/geisingers-chief-innovation-officer-why-healthcare-shouldnt-go-back-normal. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -24- [FN4] . Press release, "Interagency Health Reform Recommendations Provide Path to Healthier Pennsylvania," Governor Tom Wolf, January 15, 2021, available at https:/Awww.governor.pa.gov/newsroom/interagency-health-reform-recommendations-provide-path-to-healthier- pennsylvania/. [FN5] . Boerger, Emily, "DHCS releases revised CalAIM proposal," State of Reform, January 15, 2021, available at https://stateofreform.com/ news/california/2021/01/dhcs-releases-revised-calaim-proposal/. [FN6] . Press release, "Value Based Care Payment Global Market Report 2021: COVID 19 Growth And Change To 2030," The Business Research Company, January 2021, available at https://Awww.thebusinessresearchcompany.com/report/value-based-care-payment- global-market-report-2020-30-covid-19-growth-and-change. [FN7] . Drury, Tracey, "Greater Buffalo United Accountable Care Organization explores growth options outside WNY," Buffalo Business First, February 9, 2021, available at https://www.bizjournals.com/buffalo/news/2021/02/09/gbuaco-explores-growth-options-outside-wny.html. [FN8] - Melillo, Gianna, "Panel: COVID-19 Presents Opportunity to Reform Health Care Payment, Delivery," AJMC, February 17, 2021, available at https:/Awww.ajmc.com/view/panel-covid-19-presents-opportunity-to-reform-health-care-payment-delivery. [FNS] . Goroll, Allan H., M.D., Ann C. Greiner, M.C.P., and Stephen C. Schoenbaum, M.D., M.P.H., "Reform of Payment for Primary Care - From Evolution to Revolution," The New England Journal of Medicine, February 17, 2021, available at https:/Awww.nejm.org/doi/ full/10.1056/NEJMp2031640. [FN10] . LaPointe, Jacqueline, "CMS: Automatic Exception for MIPS Eligible Clinicians in 2020," RevCycle Intelligence, March 1, 2021, available at https://revcycleintelligence.com/news/cms-automatic-exception-for-mips-eligible-clinicians-in-2020. [FN11] . Press release, "Analysis: Spending on Health Care Would Drop by an Estimated $352 Billion in 2021 if Private Insurance Used Medicare Rates to Reimburse Hospitals and Other Health Care Providers," KFF, March 1, 2021, available at https:/Awww.kff.org/ medicare/press-release/analysis-spending-on-health-care-would-drop-by-an-estimated-352-billion-in-2021 -if-private-insurance-used- medicare-rates-to-reimburse-hospitals-and-other-health-care-providers/. [FN12] . Press release, "Fiscal Year (FY) 2022 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1746-P)," CMS Newsroom, April 8, 2021, available at https:/Awww.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2022-skilled-nursing-facility- prospective-payment-system-proposed-rule-cms-1746-p. [FN13] . Leah M. Marcotte, MD , Amol S. Navathe, MD, PhD , Lingmei Zhou, MS , Joshua M. Liao, MD, MSc, "Physician Perspectives: How the Merit-based Incentive Payment System Improves Value," AJMC, April 6, 2021, available at https://www.ajmc.com/view/physician- perspectives-how-the-merit-based-incentive-payment-system-improves-value. [FN14] . Walter, Michael, "Cardiologists join fight for better MIPS transparency," Cardiovascular Business, April 21, 2021, available at https:// www.cardiovascularbusiness.com/topics/economics-policy/cardiologists-cardiology-medicare-mips. [FN15] . Press release, "OneCare Vermont Designated as a 501(c)(3) Organization," OneCare Vermont, April 22, 2021, available at https:// www.onecarevt.org/onecare-vermont-designated-as-a-501c3-organization/. [FN16] . Pifer, Rebecca, "Value-based care at 'critical juncture,' new CMMI chief says," MedTechDive, April 23, 2021, available at https:// www.medtechdive.com/news/value-based-care-at-critical-juncture-new-cmmi-chief-says/598895/. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -29- [FN17] . News Release, "High-Quality Primary Care Should Be Available to Every Individual in the U.S., Says New Report; Payment Reform, Telehealth Expansion, State and Federal Policy Changes Recommended," The National Academies of Sciences, Engineering, Medicine, May 4, 2021, available at https:/Avww.nationalacademies.org/news/2021/05/high-quality-primary-care-should-be-available-to- every-individual-in-the-u-s-says-new-report-payment-reform-telehealth-expansion-state-and-federal-policy-changes-recommended. [FN18] . Jones, Patrick, "Insurers and providers could have "accountability mechanism' for rising costs in Oregon bill," State of Reform, April 21, 2021, available at https://stateofreform.com/featured/2021/04/oregon-bill-would-hold-insurers-and-providers-accountable-for-rising- costs/; Hayes, Elizabeth, "Oregon Senate passes measure to hold health care organizations accountable for cutting costs," Portland Business Journal, May 10, 2021, available at https:/Awww.bizjournals.com/portland/news/2021/05/10/oregon-senate-health-costs.html. [FN19] . Press release, "Medical Groups Urge CMS to Walk Back ACO Quality Overhaul," NAACOS, available at https:/Avwww.naacos.com/ press-release--medical-groups-urge-cms-to-walk-back-aco-quality-overhaul. [FN20] . Gaus, Clif, Sc.D., President and CEO of the National Association of ACOs, "NAACOS Disappointed with No Extension of the Next Generation ACO Model," NAACOS, May 21, 2021, available at https:/Awww.naacos.com/press-release--naacos-disappointed-with-no- extension-of-the-next-generation-aco-model. [FN21] . Vaidya, Anuja, "CMS' Next Generation ACO Model to end this year," MedCity News, May 24, 2021, available at https:// medcitynews.com/2021/05/cms-next-generation-aco-model-to-end-this-year/?rf=1. [FN22] . Press release, "Reps. Sewell, Smith Lead Bipartisan Push to Increase CMMI Transparency and Public Engagement," Congresswoman Terri Sewell, June 3, 2021, available at https://sewell.house.gov/media-center/press-releases/reps-sewell-smith-lead- bipartisan-push-increase-cmmi-transparency-and-0. [FN23] . Slusky, Richard, "Richard Slusky: Ways Vermont could fix its all-payer health care model," VT Digger, July 1, 2021, available at https:// vidigger.org/202 1/07/01 /richard-slusky-ways-vermont-could-fix-its-all-payer-health-care-model/. [FN24] . Robeznieks, Andis, "MIPS relief, reform and research in play to make program relevant," AMA, June 8, 2021, available at https:// www.ama-assn.org/practice-management/payment-delivery-models/mips-relief-reform-and-research-play-make-program. [FN25] . LaPointe, Jacqueline, "CMS Proposes New Value-Based Payment for End-Stage Renal Disease," RecCycleintelligence, July 2, 2021, available at https://revcycleintelligence.com/news/cms-proposes-new-value-based-payment-for-end-stage-renal-disease. [FN26] . Morse, Susan, "CMS proposes higher performance threshold for MIPS," Healthcare Finance News, July 14, 2021, available at https:// www.healthcarefinancenews.com/news/cms-proposes-higher-performance-threshold-mips. [FN27] . Press release, "DelBene, Welch, LaHood, Wenstrup Introduce Bipartisan Legislation to Incentivize Value-Based Health Care," U.S. Congresswoman Suzan DeiBene, July 20, 2021, available at https://delbene.house.gov/news/documentsingle.aspx? DocumentID=2854. [FN28] . Press release, "Fourteen Leading Health Groups Support Value in Health Care Act," NAACOS National Association of ACOs, July 20, 2021, available at https://www.naacos.com/press-release--fourteen-leading-health-groups-support-value-in-health-care-act. [FN29] . Marabito, Maria, "Survey: Many clinicians say future of primary care is ?uncertain'," Healio News, August 4, 2021, available at https:// www.healio.com/news/primary-care/20210804/survey-many-clinicians-say-future-of-primary-care-is-uncertain. THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -23- [FN30] . Press release, "Medicare ACOs Increased Savings for Seventh Straight Year," NAACOS, August 25, 2021, available at https:// www.naacos.com/press-release--medicare-acos-increased-savings-for-seventh-straight-year. [FN31] . Plescia, Melissa, "South Dakota to use up to $5M federal grant to improve rural health access," Becker's Hospital Review, September 29, 2021, available at https:/Avww.beckershospitalreview.com/finance/south-dakota-to-use-up-to-5m-federal-grant-to-improve-rural- health-access.html. [FN32] . Press release, "Medicare Advantage Value-Based Insurance Design Model Calendar Year 2022 Model Participation," CMS Newsroom, September 29, 2021, available at https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-value-based-insurance- design-model-calendar-year-2022-model-participation. [FN33] . Press release, "St. Luke's Controls Costs and Saves Medicare Almost $20 Million," Cision PR Newswire, October 7, 2021, available at https:/Avww.prnewswire.com/news-releases/st-lukes-controls-costs-and-saves-medicare-almost-20-million-301394821 .html. [FN34] . Lasek, Alicia, "Most post-acute Medicare recipients with dementia sent to SNFs despite payment changes: study," McKnights Long- Term Care News, October 15, 2021, available at https:/Avww.mcknights.com/news/clinical-news/most-medicare-recipients-with- dementia-sent-to-snfs-despite-payment-changes-study/. [FN35] . Mensik, Hailey, "CMMI wants every Medicare beneficiary in an accountable care plan by 2030," https:/Avww.healthcaredive.com/news/ cmmi-every-medicare-beneficiary-accountable-care-arrangement-2030/608620/. [FN36] . Press release, "Next Generation ACOs Saved Medicare $637 Million in 2020," NAACOS, October 2021, available at https:// www.naacos.com/press-release--next-generation-acos-saved-medicare--637-million-in-2020. [FN37] . News release, "NAACOS Statement on CMS's Final 2022 Medicare Physician Fee Schedule," NAACOS, November 2, 2021, available at https:/Avww.naacos.com/press-release--naacos-statement-on-cms-s-final-2022-medicare-physician-fee-schedule. [FN38] . "Medicare: Provider Performance and Experiences Under the Merit-Based Incentive Payment System," U.S. GOVERNMENT ACCOUNTABILITY OFFICE: A Century of Non-Partisan Fact-Based Work, October 1, 2021, available at https://www.gao.gov/products/ gao-22-104667. Produced by Thomson Reuters Accelus Regulatory Intelligence 24-Jan-2022 THOMSON REUTERS © 2022 Thomson Reuters. No claim to original U.S. Government Works. -24-