Alternative Payment Models

There is a lot involved if an accountable care organization (ACO) decides to switch from Medicare Shared Savings (MSSP) to Medicare Advantage, but Medicare Advantage offers more benefit design flexibility, explained Kim Kauffman, MPH, vice president of value-based care at Summit Medical Group.

Not only are there more dollars being place in value-based contracts, but the healthcare community is starting to see the benefits of these programs, explained Scott Hewitt, vice president, payment strategy and innovation, UnitedHealthcare.

We surveyed biopharmaceutical manufacturers and payers to understand the prevalence and characteristics of value-based payment arrangements, as well as their implementation obstacles and success factors.

How can the health industry ensure that cutting-edge gene therapies and other curative treatments get to the patients that need them, without leaving payers financially exposed? Representatives of payers and biotechnology companies discussed some of the novel discussions that are taking place as they work through issues of expense and access during “Paying for Cures: Ensuring patient access and system sustainability," a 1-day event in Washington, DC.

As CMS prepares to implement its new Pathways to Success program (formerly Medicare Shared Savings Program) for accountable care organizations (ACOs), some ACOs may consider Medicare Advantage a more beneficial arrangement, explained Kim Kauffman, MPH, vice president of value-based care at Summit Medical Group.

While not every doctor is successful in value-based contracts, there is a shift in the right direction to more value-based care, explained Scott Hewitt, vice president, payment strategy and innovation, UnitedHealthcare.

Compared with other payment models, like bundled payments or the Comprehensive Primary Care Program, accountable care organizations (ACOs) have done a better job of saving money, said Rob Mechanic, MBA, senior fellow at the Heller School of Social Policy and Management at Brandeis University and executive director of the Institute for Accountable Care.

The way accountable care organizations are set up makes them a perfect system of care for high-need, high-cost patients who might otherwise fall through the cracks of traditional delivery models, said Rob Mechanic, MBA, senior fellow at the Heller School of Social Policy and Management at Brandeis University and executive director of the Institute for Accountable Care.

There needs to be a more trusting partnership between physicians and CMS and other payers that physicians want to deliver the best care to patients at a lower cost, said Barbara L. McAneny, MD, president of the AMA.

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Alternative payment models (APMs) introduce value-based incentives for greater hospital health information exchange (HIE) engagement. We find that APM participation is associated with lower HIE volume and greater HIE diversity, breadth, and depth.

Hospitals that are participating in Medicare’s mandatory bundled payment model for hip and knee replacements reported a decrease in spending per episode of $812 compared with control hospitals not participating in the Comprehensive Care for Joint Replacement (CJR) program.

With a number of difference payment programs being tested, it’s important to have a sophisticated evaluation of these programs to really understand their impact on quality and cost, said Allison Brennan, MPP, senior vice president of government affairs for the National Association of ACOs.

Results from the first 2 performance periods of the Oncology Care Model (OCM) highlighted areas where Northwest Medical Specialties was doing well and areas it could improve, said Sibel Blau, MD, medical oncologist at Northwest Medical Specialties, PLLC.

With the low cost and high quality of community oncology practices and 40% of Americans living in rural areas, the country needs to preserve and allow community practices to thrive, said Barbara L. McAneny, MD, president of the American Medical Association and CEO of the New Mexico Cancer Center.

The Oncology Care Model (OCM) has been challenging for Texas Oncology as it has for all practices, said Lalan Wilfong, MD, executive vice president of Quality Programs at Texas Oncology.

The Hospital Readmission Reduction Program was announced as part of the Affordable Care Act and penalized hospitals for higher-than-expected 30-day readmissions. However, new research finds that the policy may have done more harm than good with postdischarge mortality increasing for Medicare beneficiaries hospitalized for heart failure and pneumonia.

There are additional areas of improvement for Medicare accountable care organizations (ACOs) beyond what was proposed in the Pathways to Success regulation, said Allison Brennan, MPP, senior vice president of government affairs for the National Association of ACOs (NAACOS).

The practices that have been participating in CMS’ Oncology Care Model have undergone significant practice transformation in order to be successful in the program. However, even after being in the model for 2 years, there are still remaining opportunities for investment.

CMS has finalized “Pathways to Success,” its overhaul of the Medicare Shared Savings Program (MSSP) that will push accountable care organizations to assume risk more quickly. The final rule includes some changes to the proposed rule, which was introduced in August.

The Oncology Care Model (OCM) is not a sustainable model, but while it finishes out the 5-year pilot, CMS will likely be fine-tuning bundled payments in medical oncology, said Michael Kolodziej, MD, vice president and chief innovation officer at ADVI Health, Inc.

Implementing the Oncology Care Model required educating physicians and staff on a new way to do the work and why the changes were necessary under the new model, explained Sibel Blau, MD, medical oncologist at Northwest Medical Specialties, PLLC.

Practices participating in the Oncology Care Model have now received performance results for 2 periods, and many practices were surprised that they didn’t perform as well as expected. In general, some of the practices have found it difficult to predict success in the model, but there have been positive results from the OCM.

CMS recently released the Oncology Care Model (OCM) performance period 1 (PP1) true-up 1 and the performance period 2 (PP2) initial reconciliation. The performance data show some practices may be gaining traction with their success, while others have found it difficult to make progress as CMS continues to refine the payment methodology for the model across performance periods.

The greatest unknown if which reimbursement model for these high-cost therapies will gain supremacy, explained Jane F. Barlow, MD, MPH, MBA, senior advisor, Center for Biomedical Innovation at Massachusetts Institute of Technology.

Geographic variation in cancer treatment spending reveals that chemotherapy and hospital inpatient care may offer opportunities for savings for practices participating in the Oncology Care Model.

Dan Mendelson, MPP, founder, Avalere Health, discusses how the shift to value-based care has impacted managed care pharmacy.

While the Oncology Care Model is likely not a sustainable mode for oncology care, it will probably inform what payment structure comes next.

Years before the Oncology Care Model (OCM) was implemented, Northwest Medical Specialties started preparing by making changes to the personnel in the practice, explained Sibel Blau, MD, medical oncologist at Northwest Medical Specialties, PLLC.