June 10, 2024

Chiquita Brooks-LaSure
Administrator
Centers for Medicare & Medicaid Services
Department of Health & Human Services
200 Independence Ave, SW
Washington, DC 20201

Re: FY 2025 Inpatient Prospective Payment System Proposed Rule [CMS-1808-P]

Dear Administrator Brooks-LaSure,

On behalf of Accountable for Health, we appreciate the opportunity to provide feedback on the proposed Transforming Episode Accountability Model (TEAM). Accountable for Health is a non-partisan, national advocacy and policy organization accelerating the adoption of effective accountable care. We aim to inform policy that advances the movement in the health care system toward accountable care that achieves better outcomes, improved care experiences, increased access and lower costs.

Primary care-centered total cost of care models, such as accountable care organizations (ACOs), have served as the backbone of accountable care delivery system reform efforts to date.1 Recent episode-based payment reforms have focused on acute events (e.g., heart attacks) and major procedures (e.g., joint replacements), representing a small component of the impact specialists have on health care outcomes, experiences and costs.2 These models have made progress toward creating a more holistic approach to payment and health care delivery, but more can be done to create an integrated specialty care strategy that aligns toward whole person care.

Our specific comments on the TEAM proposal are provided below as well as recommendations for a broader specialty care strategy. A4H believes that immediately deploying a longitudinal approach that integrates specialty care models with total cost of care models will best serve people, providers, and the Administration’s goals of aligning 100% of traditional Medicare beneficiaries to accountable care by 2030.

Episode-Based Payment Models Improve Care, Lower Costs

The Innovation Center has substantial experience with episode-based payment models, including the Comprehensive Care for Joint Replacement (CJR) model, Bundled Payments for Care Improvement (BPCI) and Bundled Payments for Care Improvement Advanced (BPCI-A). In general, in these models, providers continue to receive standard fee-for-service payments for services furnished during the episode of care. Payments are then compared to a target price that CMS sets. Participants may receive additional payments if the cost of the episode is less than the target price and quality thresholds are achieved. The predetermined target prices bundle items and services furnished to the beneficiary across care settings. Bundled payment models may include either upside-only or two-sided risk arrangements.

Experience with episode-based payment models demonstrates that these models can improve care coordination, expand access to services including those that address social need, and lower costs. Episode-based accountability can create a structure that lends itself toward greater levels of accountable care, including more familiarity with data and responsibility for care management, experiences and outcomes across settings. CMS’s evaluations show that providers undertook efforts such as developing discharge plans, engaging patients in care plans, following-up with patients, tracking patient outcomes post-discharge, and communicating with post-acute care providers about patient care.3

For example, our members shared examples of episode-based payment models driving implementation of medication reconciliation strategies at each point of a patient’s care journey. In episodic models, care teams ensure that prescribed medications do not result in duplication, omission, or incorrect dosages. Care teams review medications the patient took prior to the episode that must be stopped due to changes in health condition or new prescriptions. They review with the patient and his or her care partners how and why to take each medication. Care teams also help ensure patients have access to prescribed medications, including reviewing how to take a medication, who will pick up the patient’s medication, and identifying and recommending lower cost medications, where possible. Medication reconciliation is one example of how episode-based models create accountability for the patient outside of the single site of care, such as the hospital, coordinating across post-acute sites.

In addition, our members shared examples of how episode-based accountability has created incentives and processes for addressing social needs. Meals were one example – connecting patients post discharge to organizations that can provide meal services to help individuals regain their strength and maintain their independence at home. Patients with food insecurity that are offered a choice of stay in a skilled nursing facility (SNF) or home health may elect the SNF because in that setting that they have access to meals, even if the home would be an appropriate and safe location for their care. When there is an accountable model in place, resources such as Meals on Wheels can be identified and deployed to close gaps, like providing meals, enabling patients to return home. This has significant implications for patient satisfaction and outcomes, and for the cost of that care. The difference between a 30-day home health stay and a 30-day SNF stay is substantial, around $16,000 to $18,000. When a program is in place to create accountability for the episode of care, participants in the program, like discharge planners, social workers and care navigators can ensure and facilitate the right care in the right place at the right time, helping patients return home sooner and creating solutions that meet people’s health care needs.

Experience with episode-based models also shows cost savings. The CMS Innovation Center released a synthesis of results across bundled payment models and concluded that BPCI reduced episode costs for the majority of clinical episodes evaluated (50 out of 67) where 27 were statistically significant with an average decline of about $1,630 per clinical episode (6.1%). The results from the first two performance years of the CJR model indicated a 3.7% reduction in gross Medicare payments of $997 per episode. These reductions were attributed to increases in efficiency as care is shifted from institutional post-acute care to less intensive post-acute services (home health and outpatient therapy).

In May 2024, the CMS Innovation Center released the evaluation for BPCI Advanced model year four. The evaluation found that participants reduced total episode payments by $930 per episode, or 3.5% of the baseline mean, relative to the comparison group. Changes in post-acute care utilization and spending drove the reduction in payments. In addition, the report finds that hospitals and physician group practices transformed care on four domains: creating a culture around accountable care; investing in technology and care management tools and staff; creating or improving processes around data, standardized care pathways, and connections to primary care providers; and forming new partnerships between inpatient providers and post-acute facilities. CMS notes that it made significant design changes starting with model year four with the aim of driving increased savings and expanding care redesign to more patients.4

The TEAM proposal seeks to build on the lessons learned from over 10 years of experience with bundled payment models, including previous mandatory and voluntary models. We commend the CMS Innovation Center on a process that has carefully evaluated what has worked in previous demonstrations and seeks to incorporate those lessons learned in this new proposed model. In addition, we appreciate the process that allowed stakeholder feedback on the request for information and proposed rule, along with multiple collaborative discussions with the stakeholder community.

TEAM Feedback

CMS is proposing a mandatory, episode-based alternative payment model in which selected acute care hospitals would coordinate care for people who undergo a surgical procedure included in the model and assume responsibility for quality and cost of care from the surgery through 30 days after the beneficiary leaves the hospital. Hospitals would be required to connect patients to primary care services to help establish accountable care relationships. Procedures in the model include lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure. CMS will provide participants with a target price for the episode.

Participation Tracks
CMS is proposing three tracks in the TEAM, each with differing financial risk, participation and quality performance adjustments. Track 1 would be available only in performance year (PY) 1 for all TEAM participants and would have only upside financial risk with quality adjustment applied to positive reconciliation amounts. Track 2 would be available in PYs 2-5 for a limited set of TEAM participants including safety net hospitals and would have two-sided financial risk and quality adjustments. Track 3 would be available in PYs 1-5 for all TEAM participants and would have two-sided financial risk with quality adjustments.
A4H is concerned about the proposed mandatory two-sided risk track for safety net hospitals. Many safety-net, rural and critical access hospitals have closed due to financial distress. We are concerned that they may not be ready to undertake two-sided risk models after one year of experience with upside only models. We recommend that the agency consider making their participation in two-sided risk optional.

Model Overlaps
CMS proposes to permit overlap with TEAM and total cost of care or shared savings models or programs. CMS proposes to allow any savings generated on an episode in TEAM and any contribution to savings in the total cost of care model be retained by each respective participant in the reconciliation process. CMS seeks comment on ways to implement a notification process for shared savings or total cost of care participants that would be used to alert a shared savings or total cost of care participant that one of their aligned beneficiaries has initiated an episode in TEAM. A4H supports this proposed approach to model overlaps and appreciates the agency’s efforts to ensure greater harmonization across models.

We recommend that CMS allow ACOs that are participating in two-sided risk, such as Medicare Shared Savings Program ENHANCED or ACO Realizing Equity Access and Community Health (REACH) be permitted to have their participating hospitals opt out of TEAM. This would create an additional incentive for participation in two-sided risk total cost of care models and recognize that these entities are already accountable for cost and health outcomes for their population.

Discount
CMS is proposing to apply a discount factor of 3% to the benchmark price to serve as Medicare’s portion of reduced expenditures from the episode. The agency noted that it considered different approaches to the discount factor in developing its proposed rule, including lower discounts for certain types of participants.

A4H believes that a 3% discount is too high for this mandatory model and encourages CMS to reduce the discount to no more than 1%. We are concerned that the proposed level of discount for a 30-day episode requires too significant of a reduction in spending to be achievable. We are particularly concerned about a 3% discount in the context of rural and safety net hospitals. In addition, for hospitals that have previously participated in BPCI Advanced or CJR, CMS should account for the reduction in costs that have already been achieved. This could be done by applying shared savings for those episodes and not using a discount or by removing these episodes from the model for those participants.

Low-Volume Threshold
CMS has established a low-volume threshold of 31 total episodes in the baseline period for PY 1. The proposed low-volume threshold is too low to offer sufficient protection from catastrophic losses. This threshold is lower than the low-volume threshold used in BPCI Advanced, which was 41 episodes during the four-year baseline period for a given episode. A4H encourages CMS to align the low-volume threshold with the threshold used for BPCI Advanced.

Primary Care Referral
CMS proposes that a TEAM participant must include a referral to a supplier of primary care services for a TEAM beneficiary on or prior to discharge from an anchor hospital or anchor procedure. A4H supports this requirement and additional incentives to connect patients to a longitudinal primary care relationship. We note that TEAM retains beneficiary choice of provider consistent with traditional Medicare rules. However, we recommend CMS explore additional safeguards to ensure that patients who are already aligned to a provider be “tucked back in” to that provider. For example, CMS could consider including care coordination warm hand off CPT II codes like the Advanced Care Planning (ACP) code included as a BPCI Advanced ACP quality measure. In the case of a provider in an ACO, TEAM can create an opportunity for collaboration between the hospital and the ACO to improve care transitions and ensure longitudinal care strategies.

We also suggest that ACO patient rosters be incorporated in participating hospital electronic medical records, if requested by the ACO in their market, to facilitate communication with TEAM- beneficiaries who overlap with ACO beneficiaries.

Comprehensive Specialty Care Strategy

To achieve the goals of having all Medicare and most Medicaid beneficiaries in accountable care relationships by 2030, CMS should develop and deploy a longitudinal specialty care strategy that integrates with total cost of care models in the short term. There are several ways that the agency can leverage its experience and existing models to more quickly create voluntary options for meaningful specialist engagement and integration in accountable care.

The agency can create opportunities for specialists within its existing total cost of care portfolio. As the largest of the total cost of care delivery models, the Medicare Shared Savings Program (MSSP) can be a powerful mechanism to engage specialists in total cost of care delivery. The CMS Innovation Center can support this collaboration by providing additional tools to facilitate nested episode-based payment models within MSSP. This could include additional data sharing about specialist performance; supports and tools for understanding and leveraging data; development of contract templates or voluntary models that could be integrated within the MSSP structure at the ACO’s election. In partnership with MSSP ACOs, specialty care models could be implemented voluntarily with the option to negotiate shared responsibilities for population health outcomes and costs and the opportunity to share in savings. These partnerships have strong potential to benefit the Medicare program and the people Medicare serves. As an example, one MSSP ACO that incorporated a nested specialty program for beneficiaries with kidney disease saw a 33 percent reduction in emergency department visits and a 20 percent reduction in total cost of care among this specialized population.

Another way to encourage this collaboration is through ACO contracting that allows greater flexibility to move away from fee-for-service reimbursement. Innovation Center ACO models like ACO Realizing Equity Access and Community Health (REACH) create cash flow mechanisms that enable ACOs to pursue contracts with specialists that test payments that move away from fee-for-service reimbursements. Providers may also be able to leverage or share experiences from Medicare Advantage (MA), where payments are not strictly fee-for-service in nature. The Innovation Center should engage in a dialogue with REACH participants and subcapitated MA providers to better understand best practices and opportunities to continue to support subcontracting from ACOs that moves away from fee-for-service reimbursement toward more sustainable specialty care payment including accountability for health outcomes.

CMS can also continue to layer incentives for specialty care coordination in its models similar to the integration component of Making Care Primary (MCP). In MCP, CMS will provide data to participants regarding specialists in their region, prioritizing specific measures related to cardiology, pulmonology and orthopedics. Eligible specialty care partners who have an arrangement with an MCP participant will also receive additional per-month payments for taking on care delivery requirements. Experimentation with care management or care coordination payments may serve as a more powerful incentive for specialty care alignment and could be layered into other models in the CMS Innovation Center portfolio as a way to increase participation and begin to form the infrastructure for broader based future collaborations.

CMS should ensure that there are strong and compelling programs for specialists to participate in total cost of care models. As an example, the Comprehensive Kidney Care Contracting (CKCC) model is a voluntary total cost of care model that is specific to the nephrology specialty. CKCC is designed specifically for nephrologists and Medicare beneficiaries with kidney disease, and the specialized nature of the model has already led to a significant uptake in participation – data suggests that over 50% of independent nephrologists in the U.S. are currently participating in the CKCC model. CMS should continue programs and expand access to models such as CKCC that encourage specialists to actively participate in total cost of care accountability, particularly focusing on specialists that care for patients with highly specialized, complex, and chronic needs.

In addition, CMS should ensure there are strong incentives for specialists to participate in accountable care. Specifically, the Medicare Access and CHIP Authorization Act (MACRA) included incentives for participation in advanced alternative payment models (APMs), including total cost of care models that have two-sided risk. To qualify for the incentive payment, APM entities must meet certain thresholds of patients or revenue “through” the APM. MACRA’s intent was to encourage expansion of APM participation. However, because of the way that threshold is calculated (currently at the APM entity level) specialists, who often see many patients not attributed to the ACO, diluted the ACO entity’s performance against the MACRA thresholds. As a result, many ACOs removed specialists so the entity could hit the threshold – the exact opposite of MACRA’s intent. The threshold calculation should be revisited altogether to ensure it is meeting its stated goals of expanding participation in APMs.

Model Continuity

Given the success in BPCI Advanced and that the model seems to be improving in its outcomes over time, we encourage CMS to consider ways to ensure that there are smooth glidepaths for model participants as that model comes to an end. We understand that the Innovation Center is exploring additional avenues for sharing data through shadow bundles and the nesting of bundles within total cost of care models. We encourage a robust dialogue with existing model participants and planning around wind down of any existing voluntary bundles as well as a well-thought out transition to new models. Participants in accountable care models make substantial investments to participate in these models, including hiring staff, investing in data and technology, and otherwise deploying population health tools. As these models evolve and participation requires adjustments, we ask that the agency provide sufficient advance information to model participants to ensure smooth transitions and the appropriate business planning to make these shifts.

Conclusion

Accountable for Health appreciates the opportunity to provide comments on the proposed rule. If you have any questions about our comments or need more information, please do not hesitate to contact Mara McDermott, mmcdermott@accountableforhealth.org.

Sincerely,
Mara McDermott
CEO
Accountable for Health

1 We note that CMS indicates it is not seeking feedback on models that address conditions over a longer period of time such as the Enhancing Oncology Model and the Kidney Care Choices model. These models continue to be important elements of the agency’s accountable care strategy and we look forward to continued engagement on these topics as well.
2 Strengthening Specialist Participation in Comprehensive Care through Condition-Based Payment Reforms, Duke Margolis (November 2022), available at https://healthpolicy.duke.edu/sites/default/files/2022-11/Strengthening%20Specialist%20Participation%20in%20Comprehensive%20Care%20through%20Condition-Based%20Payment%20Reforms.pdf
3 CMS Comprehensive Care for Joint Replacement Model: Performance Year 5 Evaluation Report, The Lewin Group (April 2023).
4 CMS Bundled Payments for Care Improvement Advanced Model, Fifth Annual Evaluation Report, https://www.cms.gov/priorities/innovation/data-and-reports/2024/bpci-adv-ar5 (2024).

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