72% of Medical Groups Oppose Mandatory Alternative Payment Models

March 05, 2018 - The mandatory versus voluntary alternative payment model debate continues. This time medical group practices are voicing their opinions in a new MGMA Stat poll that found 72 percent of group leaders oppose required participation in Medicare alternative payment models.

Only 14 percent of over 1,100surveyed medical group leaders thought the government should mandate participation in Medicare alternative payment models, while another 14 percent were on the fence.

“Despite support for APMs, a large majority of physician practices oppose government-mandated participation, citing lack of evidence, diversity among medical practices, and the negative impact on practice innovation,” stated Anders Gilberg, MGMA’s Senior Vice President of Government Affairs.

The views of medical group leaders echoed those of former HHS Secretary Tom Price, who recently brought the mandatory versus voluntary debate to light.

During his tenure as House Representative for Georgia, Price and two of his colleagues penned a letter to CMS urging the federal agency to cease all mandatory CMS Innovation Center (CMMI) alternative payment models, such as the Comprehensive Care for Joint Replacement (CJR) initiative and proposed hip and cardiac bundled payment models.

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“We are aware that some models tested under demonstration programs fail to produce quality improvements and anticipated cost savings,” the representatives contended. “This is why the statute authorized the Secretary to ‘test innovative payment and service delivery models’ – not mandate them for all providers in designated geographical areas. CMMI’s mandatory models ‘experiment’ with thousands of patient lives without prior testing on a smaller scale or even a basic indication that they will actually achieve improved quality, or, at the very least, maintain present quality.”

Shortly after Price’s resignation as HHS Secretary, CMS Administrator Seema Verma implemented the call to replace mandatory CMMI alternative payment models with voluntary demonstrations. She canceled the proposed hip and cardiac bundled payment models and reduced the mandatory scope of the CJR initiative from 67 to 34 geographic areas.

As part of the announcement in November 2017, Verma emphasized that CMS plans to focus on developing voluntary bundled payment models rather than compulsory initiatives.

A couple months later, the federal agency unveiled the Bundled Payments for Care Improvement (BPCI) Advanced demonstration, which is a voluntary Medicare alternative payment model.

The introduction of new voluntary alternative payment models comes as a relief to many healthcare stakeholders. Providers like those in the MGMA Stat poll are concerned that forcing provider organizations to engage in compulsory alternative payment models that do not align with their patient populations could jeopardize an organization’s success with the model.

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Requiring provider organizations to participate in demonstrations can also be a financial burden. Organizations must allocate resources to implement health IT and population health management tools and transform care delivery processes to ensure model success prior to the model’s launch.

Premier Healthcare Alliance expressed a similar argument to CMS in March 2017, calling on CMS to develop voluntary alternative payment models that would allow  “providers to select models most appropriate for their populations and providing sufficient time to conduct population health analytics and devise implementation protocols in advance.”

The case for mandatory alternative payment models

While there is strong opposition to compulsory alternative payment models, many providers and policy experts still back mandatory demonstrations.

Three physicians recently argued in a JAMA editorial that canceling the mandatory hip and cardiac bundled payment models was a “step in the wrong direction for pursuing a healthcare system that focuses on value and not volume.”

The doctors from Brigham and Women’s Hospital, Beth Israel Deaconess Medical Center, and Washington University School of Medicine contended that voluntary bundled payment models do not provide the incentive necessary to improve care value. Without a mandate, hospitals, clinicians, and post-acute care facilities “have little motivation to collaborate around innovative care redesign to improve coordination and efficiency.”

READ MORE: Key Capabilities for Value-Based Reimbursement Models

Providers are also more likely to opt out of alternative payment model participation as evident by the original BPCI’s participation rate. Only 12 percent of eligible hospitals signed up for the voluntary bundled payments model and almost one-half of them disenrolled from the model within two years, a recent JAMA study revealed.

“A voluntary program, at least a program in which fewer than 10 percent of hospitals participate and half of those end participation early, will neither invite meaningful changes in care delivery nor provide usable information about what works and what does not,” the physicians explained. “Without testing a bundled payment model across a diverse, representative group of acute care hospitals, it will never be possible to gain actionable insights to inform iterative improvements in the design and implementation of novel payment models.”

Voluntary participation would also skew alternative payment model evaluations, healthcare policy experts from the Brookings Institution stated. Allowing organizations to opt into the models makes it difficult to discern if quality and cost outcome improvements stemmed from actual care redesigns or merely participant and non-participant differences.

In addition, selective participation results in model evaluations that are less generalizable across provider types.

“Even where the other statistical challenges posed by selective participation can be overcome, a voluntary demonstration can typically only provide reliable evidence on how a model affects the types of providers who elect to participate,” stated the policy experts. “If bundled payments are ever to reach national scale in Medicare or elsewhere, we will need evidence that they work for all providers, not just ‘early adopters.’”

While the debate surrounding mandatory versus voluntary alternative payment models continues, the recent step away from compulsory demonstrations may not signal the end of mandatory models for CMS.

New HHS Secretary Alex Azar recently told the Senate Finance Committee that he is not opposed to mandatory demonstrations under the right circumstances.

“We need to be able to test hypotheses,” he said. “If we have to test a hypothesis, we have to be a reliable partner. I want to be collaborative in doing this. I want to be transparent and follow appropriate procedures. But if to test a hypothesis on changing our healthcare system needs to be mandatory opposed to voluntary to get adequate data, then so be it.”

What the future holds for participation in Medicare alternative payment models remains unclear. But providers can rest assured that demonstrations that aim to shift payments away from fee-for-service are here to stay.