Policy & Regulation News

AHA: MACRA Alternative Payment Model Incentives Need Changing

CMS should create Alternative Payment Model incentives that make it easier for providers to become qualified instead of raising barriers, AHA argued.

By Catherine Sampson

- The MACRA Alternative Payment Model incentives should be implemented in a way that provides the best opportunity for physicians to become qualifying participants, the American Hospital Association argued in a letter to CMS this week

AHA would like for CMS to reexamine some of its Alternative Payment Model incentives.

MACRA provides incentives for physicians who show high-level participation in Alternative Payment Models. AHA stated that it supports accelerating the use and development of alternative payment models and delivery models to reward more efficient and coordinated care for patients.

Numerous hospitals, health systems and payers are adopting initiatives that better aligning provider incentives to achieve the Triple Aim of improving the patient experience of care, improving the health of populations and reducing the cost of care. One way providers are meeting goals of the Triple Aim is by forming accountable care organizations. They are also bundling services and payments for episodes of care and developing new incentives to engage physicians in improving efficiency and quality, AHA noted. However, the healthcare field is still experiencing a learning curve.

“Despite the progress made to date, the field as a whole is still learning how to effectively transform care delivery,” AHA said.

  • Engaging Providers Key to Value-Based Reimbursement Adoption
  • Direct Physical Therapy Access Could Reduce Healthcare Costs
  • Physician Groups Back AMA-AHA Lawsuit Over Surprise Billing IDR Process

    • Only a limited number of APMs have been introduced to the healthcare field so far. “Existing models have not provided participation opportunities evenly across physician specialties, AHA said. As a result, a number of physicians may be using APMs for the first time.

    AHA was disappointed that CMS has proposed “a narrow definition of financial risk when identifying advanced APMs, which count for purposes of the MACRA bonus payment.” CMS proposes to define financial risk for monetary losses to require participants to take on downside risk. “This approach fails to recognize the significant up-front investment that must be made by providers who develop and implement APMs,” AHA said.

    Providers who participate in APMs are requited invest a lot of time and resources to develop the clinical and operational infrastructures necessary to better manage patient care. Forming an ACO is costly. The estimated start-up costs for a small ACO is $11.6 million, AHA said. For a medium ACO, the startup cost is $26.1 million.

    Despite this major financial investment, most Medicare Shared Savings Program ACOs that participate in Track 1 will not qualify as an advanced APM under CMS’s proposal, AHA said. “This could inhibit physician movement toward APMs, particularly in early years, if physicians cannot engage with existing model participants.” AHA said.

    CMS should define financial risk in a way that provides physicians who are interested in participating in risk-bearing models a path rather than “serving as a barrier to entry,” AHA argued.

    Additionally, AHA believed CMS should be attentive to the impact of sociodemographic factors on performance measures used in APMs. CMS should incorporate sociodemographic adjustment “when necessary and appropriate,” AHA said.

    Social risk factors should not be ignored because they impact health outcomes of Medicare beneficiaries. Various social risk factors have the ability to influence performance on certain health care outcome measures, such as “readmissions, costs and patient experience of care,” AHA said. Some of these factors may include: the availability of primary care, physical therapy and easy access to medications.

    Failing to adjust measures for these factors when appropriate could potentially harm patients and even worsen health care disparities by pushing resources away from physicians, hospitals and other providers that treat disadvantaged populations, AHA said.

    Although CMS recently proposed to adjust several measures in the Medicare Advantage Star Rating program for sociodemographic factors, it has “resisted calls to incorporate sociodemographic adjustment into the quality measurement programs for hospitals.” AHA said.

    Providers play a vital in improving patient outcomes. According to AHA, they are working hard to identify and implement effective improvement strategies to help with outcomes. However, other factors quite often contribute to poor outcomes.

    “If quality measures are implemented without identifying sociodemographic factors and helping all interested stakeholders understand their role in poor outcomes, then the nation’s ability to improve care and eliminate disparities will be diminished,” AHA said.

    Dig Deeper: