274 Orgs Calls on CMS to Add Medicare Advantage Advanced APMs

March 08, 2017 - CMS should develop financial incentives comparable to those in the Quality Payment Program’s Advanced Alternative Payment Model (APM) track for providers who assume financial risk under Medicare Advantage plans, CAPG and 273 other healthcare industry groups recently suggested to CMS.

“For too long, policymakers have focused solely on improving care delivery in traditional Medicare only,” Donald Crane, CAPG President and CEO, stated in a press release. “It’s time to bring the same focus and the same encouragement to care delivery in Medicare Advantage.”

In a letter to CMS Acting Administrator Patrick Conway, the organizations called out the lack of incentives available to providers in risk-based Medicare Advantage contracts even though these providers demonstrated higher quality care at lower costs.

Under Medicare Advantage, CMS pays health plans a capitated reimbursement. The health plans then reimburse their providers depending on their contracts. While some providers remain under fee-for-service with the Medicare Advantage plans, others have moved to alternative payment models to receive Medicare Advantage revenue.

Recent research revealed that providers in risk-based Medicare Advantage contracts had significantly better patient outcomes than providers in fee-for-service-based Medicare Advantage arrangements. Patients treated by the provider group under the risk-based alternative payment models had a 6 percent better survival rate than patients in the fee-for-service provider group.

READ MORE: Top 5 Facts to Know about MACRA Alternative Payment Models

In addition, the risk-based provider group had an 11 percent lower emergency department utilization rate and a 12 percent lower inpatient utilization rate compared to the fee-for-service provider group.

Based on healthcare utilization changes, researchers reported that the providers in risk-based Medicare Advantage contracts saved over $2.07 million per 1,000 enrollees.

“This striking delta is the result of a model that aligns incentives toward better quality care and higher patient satisfaction,” wrote CAPG and the other organizations. “The payment model from MA [Medicare Advantage] plan to MA provider is a driver of this quality difference.”

To push forward the value-based care transition, the organizations called on CMS to recognize and incentivize risk-bearing Medicare Advantage contracts. Providing appropriate financial incentives would facilitate more alternative payment model development for all Medicare beneficiaries, not just those in the fee-for-service structure.

“Today, nearly a third of Medicare beneficiaries are enrolled in MA,” the letter stated. “In some counties, more than half of seniors are enrolled in an MA plan. Overlooking the delivery system in MA is an oversight that thwarts the goals of a reformed delivery system as MA constitutes a growing share of Medicare.”

READ MORE: What We Know About Value-Based Care Under MACRA, MIPS, APMs

CMS should also incentivize more plans and providers to take on risk-based Medicare Advantage contracts because the arrangements are not widely available. Only 20 percent of Medicare Advantage plan provider compensation arrangements include more than nominal financial risk, reported Healthcare Payment Learning & Action Network in October 2016.

“Given the striking quality difference in MA APMs, we see this as a substantial opportunity to improve the delivery system and quality of care for seniors,” the organizations wrote.

A major path for encouraging more risk-based Medicare Advantage plan participation would be through financial incentives under the Quality Payment Program’s Advanced APM track, the letter stated.

Eligible clinicians who sufficiently participate in an Advanced APM automatically receive a 5 percent incentive payment for performance years 2017 to 2022. After 2022, Advanced APM eligible clinicians will receive a higher Medicare Physician Fee Schedule update than non-participating clinicians.

Sufficient Advanced APM participation, however, rests on Medicare patient volumes and revenue. Eligible clinicians must either see a certain number of Medicare patients or receive a specific percentage of Medicare revenue through the Advanced APM to qualify for the incentive payment.

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

The healthcare industry groups in the letter pointed out that many providers in risk-based Medicare Advantage contracts take on just as much or more financial risk as providers in Advanced APMs. Yet, the Quality Payment Program does not include Medicare Advantage patients or revenue as part of Advanced APM participation thresholds nor does CMS offer an incentive payment for risk-based Medicare Advantage participation.

To develop financial rewards for providers assuming risk under Medicare Advantage contracts, the organizations offered CMS two recommendations.

First, CMS could include Medicare Advantage risk between the plans and providers as part of the Advanced APM track’s participation requirements. With this method, providers who assume more than nominal financial risk with traditional Medicare and/or Medicare Advantage will qualify for the 5 percent incentive payment.

Second, the organizations suggested that CMS create an Advanced APM specifically for Medicare Advantage.

“This structure should be the same as MACRA in that once a physician group and health plan take enough risk to exceed predetermined thresholds, CMS should make Part C incentive payments to plans and physician groups to encourage greater risk-sharing and higher quality care over time,” wrote the organizations.

The 274 healthcare industry groups expect a CMS response in the federal agency’s final 2018 Medicare Advantage Draft Rate Notice and Call Letter. CMS plans to release the final rule on April 3.