Report shows management of CMS payment program shows vulnerabilities

While CMS has made some progress towards addressing problems with the Quality Payment Program (QPP), a new report shows vulnerabilities remain regarding technical assistance for clinicians and the potential for fraud and improper payments. The HHS Office of the Inspector General (OIG) report noted that if CMS fails to sufficiently address these issues, clinicians may struggle to success under the QPP or choose not to participate. The report also found that CMS needs to put systems in place to effectively prevent, detect, and address fraud and improper payments.

CMS is implementing core provisions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) as the QPP, a set of clinician payment reforms designed to put increased focus on the quality and value of care. The QPP is a significant shift in how Medicare calculates payment for clinicians and requires CMS to develop a complex system for measuring, reporting, and scoring the value and quality of care.

Technical assistance

The report shows that if clinicians do not receive sufficient technical assistance, they may struggle to succeed under the QPP or choose not to participate. Clinician feedback collected by CMS demonstrates widespread basic awareness of the QPP, but also indicates uncertainty regarding details of participation such as who must report and how to submit data. CMS contractors have focused largely on general education initiatives, with fewer resources devoted to more customized, practice-specific technical assistance. CMS has established a Service Center to answer questions about the QPP by phone or email. Service Center data indicate that clinicians continue to have questions about both eligibility and scoring criteria, and that small practices, in particular, need information and assistance. Small practices and clinicians in rural or medically underserved areas, who may have fewer administrative resources and less experience with prior CMS quality programs, should be prioritized for assistance. The report stated, “Clinician feedback collected by CMS demonstrates widespread awareness of the QPP, but also uncertainty about eligibility, data submission, and other key elements of the program.”

Fraud

The report also found that if CMS does not develop and implement a comprehensive QPP program integrity plan, the program will be at greater risk of fraud and improper payments. To ensure that the QPP succeeds, CMS must effectively prevent, detect, and address fraud and improper payments. QPP payment adjustments are intended to reward high-value, high-quality care. Safeguarding the validity of Merit-based Incentive Payment System (MIPS) data and the accuracy of QPP payment adjustments is critical to ensure that these payments are based on clinicians’ actual performance. Appropriate oversight is critical to prevent fraud and improper payment adjustments. CMS needs to clearly designate leadership responsibility for QPP program integrity. CMS also needs to develop a comprehensive program-integrity plan for the GPP to ensure the accuracy of MIPS data submitted by clinicians. CMS said that it “is currently in the early stages of developing an oversight plan to QPP data.”

Study finds weak results for outcomes-based drug contracts

There is no evidence that outcomes-based pharmaceutical contracts lead to less spending or higher quality health care, according to a study conducted by the Commonwealth Fund. The limited impact of outcomes-based reimbursement may be due to the fact that the reimbursement model is only used for a small subset of drugs which offers limited metrics to evaluate the model’s effectiveness. The Commonwealth Fund suggested that voluntary testing and more rigorous evaluation could lead to better understanding of outcomes-based pharmaceutical reimbursement.

Outcomes-based

Following the trend towards value-based reimbursement in health care, some pharmaceutical manufacturers and private payers have made a push towards an outcomes-based pricing model in the prescription drug market. Outcomes-based models attach rebates and discounts to the health care outcomes observed in the patients who receive certain drugs. The purported goal of such arrangements is to improve the value of pharmaceutical-based care by paying more for drugs that work and less for drugs that do not. The reimbursement model appeals to manufacturers and payers as a means to increase the scope of formularies and coverage while reducing prices.

Restrictions

The outcomes-based model is limited by the fact that the model cannot apply to pharmaceuticals that do not have reliable outcomes measurements. Additionally, the outcomes measurements that do exist typically rely on claims data and exclude significant clinical outcomes. In other words, the outcomes-based contracts may not lead to optimized value because the actionable outcomes are limited to those that can be measured. Thus, while outcomes-based pharmaceutical reimbursement has the potential to increase the value of pharmaceutical treatments, greater evaluation of the model’s effectiveness and implementation is necessary to determine its true benefit.

Strike balance in proposals to modify private physician contracts, KFF warns

Policy makers considering proposals to ease Medicare private contracting rules should strike a balance between ensuring doctors and practitioners receive fair payment and helping beneficiaries face predictable and affordable medical care, a Kaiser Family Foundation (KFF) issue brief concluded. While proponents of such proposals may tout increased physician autonomy, easing private contracting rules could lead to “an unraveling of financial protections” currently in place.

Options for charging Medicare patients

Currently, physicians and practitioners have three options for charging patients in traditional Medicare—by registering as a participating provider, a nonparticipating provider, or an opt-out provider who privately contracts with Medicare patients. Participating providers (see Social Security Act (SSA) Sec. 1842(h)(1)) agree to accept the Medicare physician fee schedule amount as payment in full for all Medicare services, and patients are liable for a 20 percent coinsurance. Nonparticipating physicians may choose, on a service-by-service basis, to charge Medicare beneficiaries higher fees, up to a limit of 115 percent of the fee schedule amount (see SSA Sec. 1848(g)).

Opt-out providers with private contracts may charge Medicare patients any fee they feel is appropriate, as agreed upon in the contract, and Medicare does not cover or pay for such services (see SSA Sec. 1802(b)). Less than 1 percent of physicians in clinical practice chose to opt out of Medicare in 2016.

Patient protections

Before providing services, physicians must inform a beneficiary in writing that they opted out of Medicare (see 42 C.F.R. Sec. 405.415). The physician is prohibited from entering into a private contract when the beneficiary needs emergency or urgent care. Also, a physician must opt out of Medicare for all of his or her Medicare patients and for all services provided to them. A two-year opt-out period is automatically extended for two-year periods.

Proposals to change Medicare private contracting

The issue brief described various proposals to modify private contracting in Medicare, including legislation introduced by Rep. Tom Price (R-Ga): (1) allowing physicians to contract more selectively, on a patient-by-patient or service-by-service basis; (2) allowing patients and physicians to seek Medicare reimbursement for an amount that Medicare would normally pay under the physician fee schedule; and (3) allowing patients and physicians to seek reimbursement from supplemental insurance, such as Medigap policies and employee-sponsored retiree coverage.

KFF noted the arguments in favor of these proposals. First, lifting restrictions on private contracting would allow physicians to receive higher payment for services, which could offer practitioners greater autonomy. Second, the proposals could increase the number of physicians willing to accept Medicare patients because they could charge higher fees to some Medicare patients. Third, the proposals could reduce beneficiary out-of-pocket costs because beneficiaries entering into private contracts would be able to seek Medicare reimbursement for part of the physician’s bill.

KFF raised concerns, however. For example, liberalizing private contracting rules could increase costs for beneficiaries. In addition, some beneficiaries could lose access to affordable services, particularly for less common physician specialties.

Vermont’s ACO Model: A unified payment structure focusing on health outcomes

The trial of an alternative payment model designed to incentivize “health care value and quality, with a focus on health outcomes, under the same payment structure for the majority of” Vermont health care providers throughout the state, including Medicare, Medicaid, and commercial health care payers, will begin on January 1, 2017, and end on December 31, 2022. According to CMS, the goal of this payment model, known as the Vermont All-Payer Accountable Care Organization (ACO) Model, is “to deliver meaningful improvements in the health of a state’s population by transforming the relationships between and amongst care delivery and public health systems across Vermont” (see HHS delivers on alternative payment model promises ahead of schedule, Health Law Daily, March 4, 2016). The Vermont All-Payer ACO Model builds on the Maryland All-Payer Model by bringing statewide health care transformation beyond the hospital (All-payer system helps Maryland keep cost growth below federal level, Health Law Daily, July 22, 2016).

The Vermont ACO model will be in effect for six performance years (PY0-PY5), each spanning a full calendar year. CMS will provide start-up funding of $9.5 million in 2017 to support care coordination and collaboration between practices and community-based providers. Vermont will be accountable for statewide health outcomes, financial, and ACO scale targets across health care payers. CMS also approved a five-year extension of Vermont’s section 1115(a) Medicaid demonstration, which enables Medicaid to be a full partner in the Vermont All-Payer ACO Model.

According to CMS, “the Vermont Medicare ACO Initiative is considered a Medicare Advanced Alternative Payment Model for the providers in the two-sided risk Medicare ACO portion of the model within CMS’ Quality Payment Program, and physicians and other clinicians participating in the Vermont Medicare ACO Initiative may potentially qualify for the Advanced Alternative Payment Model bonus payments starting in performance year 2018.”

Targets

Vermont’s statewide targets include ACO scale targets, all-payer and Medicare financial target, and health care and quality of care targets.

Although ACOs will continue payer-specific benchmarks and financial settlement calculations, the ACO design will be aligned across payers. Vermont payers and providers will be encouraged to participate in ACO programs with a goal of attaining 70 percent of all residents, including 90 percent of Vermont Medicare beneficiaries, participating in an ACO. Vermont’s ACO Model will help CMS attain itsgoal of “having 50 percent of all Medicare fee-for-service payments made via alternative payment models by 2018” (see New alternative payment models announced by CMS, Health Law Daily, October 26, 2016).

In terms of the financial target, Vermont will limit the annualized per capita health care expenditure growth for all major payers to 3.5 percent and the Medicare per capita health care expenditure growth for Vermont Medicare beneficiaries to at least 0.1-0.2 percentage points below that of projected national Medicare growth.

Vermont identified four priorities for its Health Outcomes and Quality of Care target: substance use disorder, suicides, chronic conditions, and access to care. Each of the priorities will be measured in three categories: (1) population-level health outcomes regardless of whether the population seeks care at the providers in the ACO; (2) health care delivery system measures and targets primarily related to the performance of care delivered by the ACO; and (3) process milestones measurable during the early years of the Model that would support achievement on the population-level and health care delivery system measures and targets.

Medicare ACO Initiative 

The CMS Medicare Fee-for-Service ACO initiative that is offered by CMS to ACOs in Vermont has been tailored for the Vermont All-Payer ACO Model. The Vermont Medicare ACO Initiative is based on CMS’ Next Generation ACO Model and will support ACO design alignment with other Vermont payers’ ACO programs. Participants in the Vermont Medicare ACO Initiative may not participate in the Medicare Shared Savings Program simultaneously.

Medicaid

The section 1115(a) Medicaid demonstration promotes delivery system and payment reform by allowing Vermont Medicaid to enter into ACO arrangements that align in design with that of other health care payers in support of the Vermont All-Payer ACO Model. For more information on Vermont’s section 1115(a) Medicaid demonstration extension see Fact Sheet and CMS Approval Letter.