June 14, 2024

The Honorable Ron Wyden
Chairman
Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Mike Crapo
Ranking Member
Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

RE: Bolstering Chronic Care through Physician Payment: Current Challenges and Policy Options in Medicare Part B

Dear Chairman Wyden and Ranking Member Crapo:

On behalf of Accountable for Health, we appreciate the opportunity to provide feedback on the Senate Finance Committee White Paper on Bolstering Chronic Care through Physician Payment: Current Challenges and Policy Options in Medicare Part B. 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.

Medicare’s accountable care models have demonstrated that, when properly structured and supported, they can improve care experiences, expand access, and lower costs. For example, most of Medicare’s Accountable Care Organization (ACO) models and many specialty care models have produced savings for Medicare while also improving care through strategies such as providing more timely access to care, making it easier to find specialty care appointments, improving communication and improving care coordination.1

Table displaying evidence from the literature re value-based care and access

In 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) laid out a framework to advance the adoption of accountable care in traditional Medicare. MACRA included “u-shaped” incentives for advanced alternative payment model (APM) participation, including a 5% bonus through the 2022 performance year/2024 payment year, dropping to 0% for 2023 through 2025, and then transitioning to a more favorable conversion factor update for participants in advanced APMs beginning in 2026 when providers in advanced APMs would receive a 0.75% increase to the conversion factor as compared to providers not in advanced APMs who receive a 0.25% increase (a .5% differential), which compounds over time.

While eligibility for the 5% incentive for advanced APMs was set to expire at the end of the 2022 performance year, Congress extended the bonus at 3.5% for a single year. The one-year 3.5% bonus extension expired at the end of the 2023 performance year. Congress again extended the bonus at 1.88% for the 2024 performance year. We note that in 2026, a .5% conversion factor differential begins. This differential compounds over time but leaves a gap in the short term. Therefore, extending the flat fee bonus is necessary to demonstrate Congress’s commitment to advancing accountable care. Absent structural reforms to MACRA by the end of 2024, Congress should extend the advanced APM bonus.

While the advanced APM bonus has decreased, the maximum bonus under the Merit-based Incentive Payment System (MIPS), a fee-for-service payment option, remains at 9%. Historically, as the White Paper notes, the MIPS maximum positive performance adjustment has hovered around 2%. In the most recent reporting from CMS however, the maximum MIPS bonus for the most recent year of data available is 8.26%, substantially greater than the maximum possible bonus for advanced APM participation. Congress should prioritize correcting this structural flaw and ensure that advanced APM incentives are stronger than MIPS/fee-for-service incentives. An immediate action could be reducing the maximum MIPS bonus/penalty to be less than the advanced APM bonus.

MACRA’s incentives worked to grow participation in advanced APMs and more can be done to accelerate the transformation. Importantly, MACRA showed success in transitioning providers to accountable care. In 2022, 386,263 clinicians qualified for the 5% MACRA bonus for participating in a qualifying APM. Notably, 420,591 clinicians participated in advanced APMs in 2022, this is compared to about 100,000 in MACRA’s first measurement year. Clearly, MACRA’s incentives have provided a powerful driver to move clinicians into advanced APMs. However, while the total number of clinicians qualifying for the bonus has continued to grow over time, and the number of MIPS-eligible clinicians has gone down, there is still substantial opportunity to move more fee-for-service providers to advanced APMs. In 2022, there were still 624,209 participating in MIPS.2

Tables displaying qualifying advanced APM participant status and transition from MIPS eligible to qualifying APM participant

Importantly, these APM incentives and growing participation in the models have transformed care. The availability of the incentive payments has supported investments in new staff and expanded approaches to population health management. Broader participation has added benefits to patient populations in terms of better health outcomes, better care coordination, and care teams that meet people’s total health needs. More on the importance of these incentives to invest in the infrastructure for accountable care is available in BRG’s Transitioning to Value-Based Care: Financial Implications for Providers and Policymakers.

Although MACRA has been successful in driving early adopters to enter accountable care models, new tools are needed to encourage late adopters to move into these models and to encourage ongoing participation in two-sided risk. Unfortunately, at the time we need more tools to attract participants, the existing bonus structure works against the goal of getting providers to pursue delivery system transformation.

Efforts to reform MACRA should retain a “wedge” or positive payment differential for advanced APM participation with lower payment for remaining in fee-for-service. This can be done in a way that is more targeted and clear to drive participation in advanced APMs that save money and improve care:

  • Transition to incentives that are value-based not volume-based. For example, Congress could create a per-aligned beneficiary incentive rather than an incentive based on claims.
  • Ensure strong and clear incentives for models that lower costs and improve care, including at least one global risk model.
  • Make clear that advanced APM participation is preferred to fee-for-service MIPS participation by ensuring the MIPS bonus cannot be larger than the advanced APM incentive.
  • The time between performance and payment should be shortened to the greatest extent possible to ensure incentives are meaningful.
  • Disentangle APMs from complex MIPS requirements to the greatest degree possible.

Responses to Committee Questions

1. In considering a new design for future A-APM bonus payments, are there existing demonstrations that structure A-APM incentive payments to reward providers that attribute beneficiaries to the A-APM?

Yes, there a many existing examples of advanced APM models that provide a per-beneficiary payment. One common example is a care coordination fee – a per-member amount paid monthly based on the number of patients assigned to primary care physicians. These fees may vary based on the complexity of the patient. These fees are often paid up-front, on a monthly basis, and not associated with a specific volume-based service.3

2. What methodology should form the basis for incentive bonuses, if not total PFS revenue for all providers participating within an A-APM? What bonus structure best encourages new providers participating in A-APMs?

Two key considerations should guide the development of a new methodology for advanced APM bonuses:

  • Lag in payments: Today, clinicians are paid their APM incentive two years after their performance in an advanced APM. This delay means that it is sometimes unclear what the payment is for and that the payment is not a strong driver of behavior.
  • Volume-based incentives work against movement to accountable care: Tying incentives to the volume of services provided is at odds with our goals of reducing the health system’s reliance on volume-based payments.

Since 2015, we have seen steady growth in participation in advanced APMs and the incentive payment has helped participation climb from about 99,000 clinicians in 2017 to over 400,000 clinicians in 2022. However, more can be done to accelerate this transformation.4 Under the structure of original MACRA, the bonus is applied to certain Part B revenue and flows to the clinician directly, two-years after the performance in an advanced APM takes place. For example, a clinician who performs in an advanced APM in 2022 will receive their bonus, a percentage of their Part B claims revenue, in 2024. In addition, the advanced APM entity must pass one of two threshold tests, described below, and then the individual clinician (not the APM entity) receives the bonus.

Bonuses that are tied to claims are delayed in their payment because of the time it takes to process claims and calculate the bonus amounts. This has served to dilute the incentives today as there is a lengthy delay between when a clinician performs and when they receive their bonus. Moving to something more predictable, like an attribution-based bonus, could shorten the time between performance and payment, thereby strengthening the incentive for participation.

Looking to the future of physician pay under the Medicare Physician Fee Schedule and in other contexts, there is evidence that other forms of payment (bundles, hybrid payments, capitation) can be effective to provide better health outcomes and a better experience of care. The CMS Innovation Center continues to test new advanced APMs that move away from fee-for-service cash flow, and legislation on the Hill and discussed in this White Paper seek to introduce alternative forms of payment alongside fee-for-service payments to advance accountable care options that may better meet the needs of clinicians and populations. A volume or claims-based incentive may not be harmonious with capitated payments in these future models. As policymakers seek to test alternative forms of payment and reduce volume-based incentives, creating an A-APM bonus that is not tied to claims/volume, supports those goals.

Finally, we note that the existing conversion factor differential (the .5% increase for participating in an A-APM) as currently structured, poses challenges for APM financial performance. This differential is not currently carved out of advanced APM spending against the benchmark and therefore will negatively impact APM’s ability to generate savings against their benchmarks. If this differential moves forward, it should be carved out so that it operates as a true incentive.

3. Should the bonus continue to require participation thresholds, or modify or eliminate thresholds to allow for greater participation? How?

We recommend eliminating the participation thresholds. Moving to a flat-fee bonus, such as an attribution-based bonus, would achieve the goal of eliminating the need for thresholds.

While well-intended in the beginning as a metric of increased advanced APM participation, the thresholds, which require minimum revenue or patient participation through an advanced APM to qualify for the incentive payment, have worked against MACRA’s goals of greater participation. In addition, data inconsistencies and a lack of visibility into the calculation of these thresholds have increased complexity and dampened the effectiveness of the bonus.

Finally, and perhaps most importantly, some APMs have removed specialists from their participant lists in an effort to ensure that their advanced APM entity reaches the thresholds. The reason being that while a specialist may see some advanced APM patients, the majority of their patients may not be attributed to an advanced APM. The non-advanced APM patients would water down the entity’s performance against the threshold, potentially causing the entity not to qualify for the bonus. In response, advanced APM entities have removed specialists from their participant lists, which is the opposite of MACRA’s intent. Eliminating participation thresholds will encourage more advanced APMs to engage with specialists, supporting these providers coming off the fee-for-service chassis and increasing coordination among providers.

4. Are there other A-APM programmatic designs that would make participation more attractive for providers?

In addition to creating a stable, predictable, and more timely bonus structure for A-APM participation, there are several changes that could be made to increase stability and predictability within the models themselves. This includes:

  • Updating benchmarking approaches. Many A4H members have participated in advanced APMs for a decade or more. Because these models are based on achieving shared savings on historical utilization as a benchmark, it becomes harder and harder to achieve savings under this methodology over time. We recommend continuing to work with CMS to identify benchmarking strategies that are sustainable over the long term for a wide variety of participants.
  • Beneficiary Engagement Improvements. Advanced APMs are limited today in how they can communicate with beneficiaries and how they can talk about their work to improve health care for beneficiaries. We recommend revisiting these communications restrictions and working closely with consumer organizations and advanced APM entities to incorporate the lessons learned from the last decade-plus of advanced APM experience. Communication should be straight forward, transparent, user friendly and less restricted.
  • More Flexible and Patient Focused Voluntary Alignment. As the ACO movement has progressed, some ACOs have used voluntary alignment, meaning the patient can affirmatively elect participation in an ACO. The current process in the Medicare Shared Savings Program requires the patient to log into a CMS portal. We have also observed confusion across models as to whether the patient is being aligned to a specific doctor, practice or APM entity and existing rules may be too rigid to honor the patient’s choice – whether that be a practice or a specific provider. This is particularly important when a provider changes practices, as to whether the patient’s intent was to follow that provider or stay with the practice. CMS systems and processes should be updated and become more nimble to be responsive to beneficiary choice. We recommend creating in-office voluntary alignment, where patients can use a paper or electronic form to make their voluntary alignment choices and those forms can be submitted to CMS through a portal or spreadsheet. We recommend creating a portal where APM entities can see what provider each patient is aligned to and creating greater visibility into which beneficiaries are not aligned. We also request more flexibility in marketing for advanced APM entities to communicate the benefits of the model to patients. CMS should also work with stakeholders to determine how to broaden voluntary alignment rules to best meet patients’ healthcare needs, including examining which settings are appropriate for voluntary alignment and appropriate safeguards for beneficiaries. • Streamlined Quality and Performance Measurement. MACRA was envisioned to create greater simplicity and reduced administrative burden for participants in advanced APMs. However, over time, the requirements of MIPS have increasingly been merged into advanced APM requirements. This is particularly true for the Medicare Shared Savings Program advanced APM tracks as evidenced by the transition to electronic clinical quality measure (eCQM), the information blocking proposal, and promoting interoperability (PI) categories. In addition to creating unnecessary costs, these requirements weaken the incentive for providers to join advanced APMs. We strongly encourage Congress to disentangle MIPS from advanced APM performance.
  • Eliminating retrospective trend adjustments. Across the CMS Innovation Center portfolio, we have observed that significant, one-year retrospective trend adjustments are disrupting participation and longevity in these models. This is particularly true for smaller organizations participating in these models who can see significant financial updates wipe away their savings after a participation year. We recommend eliminating retrospective trend adjustments and identifying other mechanisms to achieve savings across the life of a model.
  • Encourage Waiver Innovation. Over the past several years, we have seen a decrease in new waivers available for advanced APM participants. In addition, the existing waivers are underused due to the burdensome requirements that surround their implementation. We recommend working with advanced APM stakeholders to identify and test new waivers and reduce the administrative burden for existing and new waivers.
  • Model Continuity and Glidepaths. Clinicians make substantial investments to participate in models at the CMS Innovation Center. While we understand that these are intended to be limited duration experiments, we also believe that more can be done to communicate the transitions from model to model as model end dates approach. Examples of this include ACO REACH and Kidney Care Choices, both of which are currently scheduled to end in 2026. Winding down model participation requires eliminating staffing, rolling back additional benefits to patients and other disruptions, all of which harm beneficiaries and providers. The CMS Innovation Center should be required to engage in early dialogue with stakeholders about future plans for models and provide more transparent processes around model termination or continuation strategies.

5. How could Congress ensure a broader array of A-APM options, including models with clinical relevance to specialties or subspecialties confronting few, if any, such options? How could Congress encourage ACOs led by independent physician groups and/or with a larger proportion of primary care providers?

We encourage adoption of a framework that considers the care experience of the beneficiary to determine whether a separate model is needed or whether providers across the care continuum working together under existing total cost of care structures can meet patient needs.

To consider a broader array of advanced APM options, we recommend a more transparent process for CMS Innovation Center consideration of new models. This could include a direct pathway for stakeholders to submit model ideas to the Innovation Center and to receive feedback. CMS should also be required to provide feedback regarding the Physician-Focused Payment Model Technical Advisory Committee (PTAC) models and why they were not selected for testing. Without this transparency and engagement, it is difficult to understand the roadblocks to model adoption, particularly with regard to models that were submitted by PTAC to CMS but never tested.

We also recommend that new models be considered with the patient at the center. Rather than further segmenting or fragmenting healthcare delivery and financing, these models should aim to bolster total cost of care accountability for patients. Finally, we recommend more frequent reporting from the Innovation Center to Congress on models that are currently being tested. The CMS Innovation Center is currently required to report once every 10 years. More frequent reporting would allow Congress greater visibility into the wide array of models that are and have been tested.

Congress could create more pathways and stronger incentives for specialists to participate in total cost of care models, such as ACOs. Addressing the flaws in the current MIPS versus advanced APM bonus opportunity could help achieve this goal (maximum MIPS bonus is 9% versus APM bonus of 1.88%). In addition, the CMS Innovation Center is testing care coordination and specialty integration payments in the new Making Care Primary model, which could serve as a potential avenue for greater specialty participation in existing models.

To encourage more participation in ACOs, Congress should ensure that incentives are clear and strong. Mixed messages, such as higher potential payments under MIPS, dilute ACO participation. We encourage Congress to consider ways that all ACOs, especially those with two-sided risk, can be encouraged to a greater degree. This includes consideration of the up-front costs associated with entering an ACO; making more data available and digestible by a wide range of entities, and creating additional flexibilities.

Congress should also consider additional models for individuals eligible for Medicare and Medicaid (duals). We recommend creating a model that allows providers to take full clinical and financial responsibility for duals. In current ACO initiatives, the provider typically does not have financial accountability for the Medicaid expenditures for dual eligible patients. An accountable care delivery and integrated coverage model, building on existing ACO infrastructure, could improve access to accountable care for this population.

6. What programmatic flexibilities, with respect to A-APMs or smaller models or pilots, would help to ensure a broader and more diverse array of options for clinicians?

Numerous models exist today for clinicians to participate in advanced APMs. To ensure more participation in these existing options, CMS should reduce complexity and burden associated with these models, increase communication and learning resources for clinicians who want to explore these options, and make more data and modeling available before applying to the model so clinicians can assess what their performance would look like inside one of these existing options.

In addition, the CMS Innovation Center’s mandate around neutral spending or cost savings may be incompatible or difficult to achieve in some communities when judged by savings based upon a historical benchmark. In many of these communities, historical spend is going to be artificially low. Therefore, unique benchmarking approaches or cash flow options may be necessary to facilitate participation in these communities.

Congress should also consider pathways to expedite making permanent elements of CMS Innovation Center models that prove effective at lowering costs or improving quality even when the entirety of the model doesn’t sufficiently achieve desired results. We have seen successful elements of models included in the physician fee schedule, for example, and would like to see a more robust pathway for evaluation and permanence for effective model features going forward.

As the percentage of beneficiaries in Medicare Advantage increases, there are important questions and considerations for measuring the success of models in traditional Medicare and in Medicare Advantage, including updating model evaluation approaches. Today, in CMS Innovation Center models, model participants are compared against fee-for-service beneficiaries, sometimes including participants in other fee-for-service models. A modernized approach to evaluation could include a different approach, particularly as the population of fee-for-service with no model continues to decrease. One potential option for CMS to consider could be a blend of traditional Medicare and Medicare Advantage populations.

7. Are there other A-APM programmatic designs that would make A-APMs more attractive to beneficiaries to increase attribution and thus support A-APMs?

One key design feature is increasing communication to beneficiaries from CMS and from advanced APM entities about the benefits of participating in these models. Today, communications are very restrictive and limited. Congress should explore ways to support additional communications and alignment strategies.
Beneficiary cost sharing waivers for those without a supplemental plan would also be helpful to increase engagement with advanced APMs.

***

  1. In a hybrid PBPM payment model under FFS, which services should be paid through FFS versus the PBPM? Are there services beyond primary care that would benefit from this type of payment model as well?A4H members support the creation of additional options that allow for different cash flow mechanisms for providers other than fee-for-service reimbursement. Hybrid payment approaches have been tested and proven successful at the CMS Innovation Center through previous advanced APM models. We believe that changing cash flow can improve health outcomes and patient satisfaction under the right circumstances.Given the stage of development and widespread adoption of advanced APMs today, we believe that the best way to do this is to allow hybrid payment model options within advanced APMs, as has been done at the CMS Innovation Center. Adding this flexibility to the Medicare Shared Savings Program, and potentially through other advanced APM models, would allow for this cash flow change and potential investment in care management and infrastructure without necessitating the creation of a new program requiring its own risk adjustment, quality measurement, attribution, and specialty care strategy. We believe that adding this flexibility in the context of advanced APMs would provide a streamlined approach to ensuring beneficiary protections while advancing the goals of greater access to accountable care.

Conclusion

A4H appreciates the opportunity to provide comments on these important issues. Transforming our nation’s healthcare system from its reliance on fee-for-service to one that is accountable for health outcomes is critically important. We look forward to continuing to work with the Committee to advance legislation that accelerates this movement.

Sincerely,
Mara McDermott
CEO
Accountable for Health

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