Payment Reform 3.0: It s Time

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1 Payment Reform 3.0: It s Time Len M. Nichols, Ph.D. NCHC Summit on Affordable Health Care Philadelphia, PA November 15,

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4 ACOs MSSP Pioneer Next Generation? Primary Care CPCI Individual payment models performance mixed disappointing, glass > ½ full? Bundled Payments (Models 2* {acute and post-acute} and 4** {prospective acute})

5 Medicare Accountable Care Organization Results For 2015: The Journey To Better Quality And Lower Costs Continues David Muhlestein, Robert Saunders, and Mark McClellan September 9, 2016 Health Affairs Blog Round Start Date 1 April July January January January 2015 Assigned Beneficiaries Percent Savings/Loses Net Savings/Loss 351, % $72,045,856 1,704, % $21,966,968 1,782, % $-107,232,592 1,783, % $-148,839,104 1,648, % $-54,230,300 Total 7,270, % $-216,289,172

6 Pioneer ACO results Flagship ACO program Participation has dropped from (in 2015) Of 12, 6 earned shared savings bonuses of 8 with net savings One of 4 losers had to pay $1.6m to CMS This Program DOES meet criteria to have Secretary expand into a program, not a pilot

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8 Private Sector PCMH evaluations Sinaiko et al ( collaborative meta analysis) Only 3 included studies had more than 25 practices 4.2% cost reduction for sickest patients* BCBS of MI (4000+ docs), better results CareFirst (4000+ docs; conflicting results, plus MCR study) Even if PCMH saved 2% off trend, not enough McWilliams et al, NEJM perspective: Care Coord. not enough

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11 Quality Payment Program Repeals the Sustainable Growth Rate (SGR) Formula Streamlines multiple quality reporting programs into the new Merit-based Incentive Payment System (MIPS) Provides incentive payments for participation in Advanced Alternative Payment Models (APMs) The Merit-based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (APMs) First step to a fresh start We re listening and help is available A better, smarter Medicare for healthier people Pay for what works to create a Medicare that is enduring Health information needs to be open, flexible, and user-centric

12 Independent PFPM Technical Advisory Committee PFPM = Physician-Focused Payment Model Goal to encourage new APM options for Medicare clinicians Submission of model proposals by Stakeholders Technical Advisory Committee 11 appointed care delivery experts that review proposals, submit recommendations to HHS Secretary Secretary comments on CMS website, CMS considers testing proposed models For more information on the PTAC, go to:

13 What Has PTAC Done So Far? Reviewed 7 proposals, 13 more in process April: Recommended 2 of 4 (1 withdrew after PRT report) Sec agreed to reject one, engage with others (Project Sonar +, ACS-Brandeis - ) Sept: Recommended 2 of 3 (sent one back for more work) HAH+ and Oncology BP were suggested limited scale C-TAC s Advanced Care Model judged incomplete

14 Lessons from PTAC so far Most stakeholders view PTAC as alternative pathway to AAPM status Many specialty care areas/clinicians do not fit in CPC+ or ACO framework PTAC and CMS/CMMI are not going to agree 100% Seema Verma s WSJ op ed and CMS RFI lay out new priorities

15 Apparent Priorities of Trump s New CMMI Less micromanagement from DC Imply less interest in new payment models per se? More competition among providers Hints at vision of price competition for Medicare patients More waivers from current regulations Direct contracting? More information and incentives for consumers Make cost-sharing a variable? Also interested in MA-led and state-led reforms

16 Lessons for Payment Reform 3.0 Focus on ID ing right patients and directing care resources to them PMPM + risk not nec. better than targeted in-kind assistance TCC not the problem, but CPC+ drew that lesson? Need to focus on PRICES as much as win-win utilization reduction (reference prices, with time certain transition path) Tie exclusivity period to $/QALY for new drugs Focus on specific SDOH might lower health costs enough HIT systems not ready for prime time, need back-office HIT at CMS to speed use of info system as real time pop health tool