Through the last few weeks in office and in anticipation of the new calendar year, the Centers for Medicare and Medicaid Services (CMS) passed a slew of rules, deadline extensions and requests for participation in order to bolster cost-lowering initiatives and incentivize participation in value-based care programs.
The federal government is currently facing an upcoming fiscal crisis, with the looming insolvency of the Medicare Trust Fund arriving in 2024. Health Affairs (HA) reports that the Center for Medicare and Medicaid Innovation (CMMI) is a mechanism to improve efficiencies for long term cost-savings.
In its first ten years, CMMI has overseen a number of payment reform models from primary care vs. specialized care, Medicare vs. multi-payer, risk assessments and it is likely that the combined effect of payment changes across models had greater impact than basic studies suggest. HA suggests that CMMI should consolidate and institutionalize shifts in order to achieve more permanent and broader solutions to generate savings.
The JAMA Network also published a study last week on the Medicare Quality Payment Program (QPP), the largest value-based care program in Medicare. The study found that if Medicare is going to continue in this direction, there are four problems with the Merit-Based Incentive Payment System (MIPS), a track of the QPP. These include that the model is based on fee-for-service, which is the program that value-based initiatives seek to reform.
Additionally, VBP programs are often designed just to help the Medicare program secure savings rather than improve patient care. Furthermore, the administrative complexities of these programs are often a deterrent for participation. Finally, CMS has struggled with risk-adjustment for participants, failing to include important patient factors like poverty and disability into cost and clinical outcome.
Fiscal returns can result from a number of different sources, for example, this week CMS issued a final rule to “Empower States, Manufacturers, and Private Payers to Create New Payment Methods for Innovative New Outcomes Based on Patient Outcomes.” The rule is part of CMS’ ongoing effort to lower prescription drug prices in a fulfillment of President Trump’s campaign promises.
State Medicaid agencies are entitled to manufacturer rebates through the “best price” reporting program, in which drug companies report their annual lowest price for brand name prescription drugs and providing rebates to CMS and states under the Medicaid Drug rebate Program. CMS Administrator Seema Verma explained in a press release how adjustments to the MDRP are necessary to complete the broader changes to ambitious cost-saving payment models:
Rules on prescription drug rebates and related reporting requirements have not been updated in thirty years and are thwarting innovative payment models in the private sector…. A new generation of approaches to payment methods is needed to allow the market the room to adapt these types of curative treatments while ensuring that public programs like Medicaid remain sustainable and continue to receive their statutorily required discounts.
According to Fierce Healthcare, CMS will also allow drug companies to issue multiple best prices as an incentive for them to enter value-based arrangements directly with states and Medicaid managed care organizations.
CMS also extended an invitation for applications from prescription drug plans and Medicare Advantage plans to participate in the Value-Based Insurance Design Model, which also contains a hospice benefit component as of this year. Applications are set for the calendar year 2022 and may be submitted from February 1 through April 16 of next year, the American Hospital Association reports.
Medicare Advantage plans have independently taken initiative to form value-based care programs of their own, under the expectation that these types of plans are going to constitute the brunt of reform efforts for Medicare programs across the board. According to MedCity News, Intermountain Care, an Utah-based hospital system, has partnered with UnitedHealthcare to establish an accountable care organization (ACO) in order to improve care coordination and boost health outcomes for patients.
Becker’s Hospital Review also reports that CMS extended the data submission deadlines for quality and value-based reporting programs for several types of providers. The Data submission deadline for the Hospital Outpatient Quality Reporting Program is now March 1st and the deadline for the Hospital Inpatient Quality Reporting Program was extended from January 6th to February 8th. Due to the COVID-19 pandemic, reporting concerns for overburdened hospitals and providers has been of concern to CMS, by extending the deadline, they’re encouraging continued participation in quality-based programs.
Finally, the National Association of ACOs (NAACOS) applauded Congress for acting on a provision in the year-end spending bill that encourages participation in risk-bearing payment models by freezing thresholds needed to secure a 5% bonus on annual Medicare payments. From Clif Gaus, NAACOS president and CEO:
If healthcare providers cannot count on these incentives, which support their ability to assume risk and fund key patient and ACO initiatives, then far fewer would be willing to participate in risk-bearing alternative payment models… This move will help preserve Medicare’s move to a payment system that’s based more on value and outcomes, rather than volume. Congress was correct to recognize this issue before those thresholds raise next year and to prove it is committed to Medicare’s value movement.