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AMGA: Align Medicare Reimbursement, Measures for High-Value Care

CMS should align quality measures with spending performance and standardize Medicare reimbursement policies across initiatives, AMGA stated.

AMGA called on CMS to align cost and quality measures as well as Medicare reimbursement policies

Source: Thinkstock

By Jacqueline LaPointe

- AMGA recently called on CMS to align quality measures with spending performance as well as Medicare reimbursement policies across Medicare Advantage, fee-for-service models, and accountable care organizations (ACOs).

In two letters to CMS Acting Administrator Seema Verma, the healthcare industry group advocated for more alignment in Medicare programs to reduce administrative burdens for providers and improve provider performance evaluations.

“AMGA members are focused on providing the best care, and variation among CMS programs creates unnecessary impediments,” stated Chester A. Speed, JD, LLM, AMGA Vice President of Public Policy. “Unfortunately, depending on what type of Medicare coverage a patient has, the regulations governing coverage, payment, and quality reporting can vary dramatically. This creates an administrative burden that doesn’t serve the patient, the provider, or Medicare, itself.”

Link healthcare cost and care quality measures to assess value

With value being defined as outcomes achieved relative to healthcare expenditures, then cost and quality measure performance should be correlated to accurately assess the value of healthcare services providers furnished, AMGA argued.

In its comments on the Dec. 2016 “Episode-Based Cost Measure Development for the Quality Payment Program” white paper, the group pointed out that Medicare programs neglect to link cost and quality measure performance. Instead, the programs provide separate performance scores for provider spending and care quality.

READ MORE: Key Ways to Improve Claims Management and Reimbursement in the Healthcare Revenue Cycle

For example, out of the 34 quality measures used in the Medicare Shared Savings Program (MSSP), none include a healthcare cost component for the full care cycle. Similarly, the Healthcare Effectiveness Data and Information Set (HEDIS) does not contain measures that align cost and quality performance.

The industry group expressed concerns that MACRA’s Merit-Based Incentive Payment System is heading on the same path. CMS plans to evaluate care quality and cost performance as separate MIPS categories.

“We believe this is a mistake,” the group wrote. “Over time the agency must establish a correlation between quality performance and expenditure or reduced spending – if for no other reason than if providers are required to invest in a significant amount of time or expense in reporting measures.”

AMGA also promoted tying patient functional status to quality and cost measures used in Medicare episode-based programs, especially those targeting chronic disease management.

“Spending on chronic disease, particularly diseases with co-morbidities, is difficult to account for accurately when calculating episode-based spending,” said Speed. “Accurate accounting is made more difficult when functional status limitations are ignored, as these drive comparatively greater spending, independent of the disease condition. Functional status needs to be accounted for or factored in as a weight in calculating spending across an episode of care.”

READ MORE: What Is Value-Based Care, What It Means for Providers?

CMS would substantially miscalculate episode group costs by neglecting to account for patient function status or functional limitations, the industry group added. The federal agency should look to cancer registries that bundled oncology services for advice on how to incorporate functional status.

Standardize Medicare reimbursement policies across programs to reduce admin burdens

In its comments on the recent Medicare Advantage capitation rates announcement, AMGA urged CMS to align Medicare reimbursement policies across Medicare Advantage, fee-for-service models, and the MSSP.

“Doing so would create a more spending efficient Medicare program in sum, reduce the substantial burden providers and patients presently face in understanding and navigating different regulatory rules for three programs and would mitigate the burden taxpayers currently face in financing an under-performing and spending inefficient Medicare program,” the industry group claimed.

The Medicare programs underperform because of a lack of competition. For example, Medicare Advantage and the MSSP program are different in terms of beneficiary attribution, spending benchmarks, risk adjustment, and value-based incentive payments.

As a result, the programs are “not on a level playing field” and cannot compete. The absence of competition creates Medicare program inefficiencies.

READ MORE: Higher Medicare Reimbursement Not Related to Better Quality

AMGA agreed with the Medicare Payment Advisory Commission’s (MedPAC) recommendation to synchronize Medicare reimbursement and incentive rules across the three programs. Aligned payment policies would boost competition because beneficiaries would be able to compare and choose plans or care delivery methods that demonstrated the best value. Therefore, the competition would drive out inefficiencies and shift market share away from less efficient providers or plans.

In addition, the industry group advised CMS to consider using more incentive-neutral policies to drive quality improvements.

“Care coordination and collaboration, which are the foundation of the model of care championed by AMGA members, are going to drive quality improvements,” Speed said. “We’re focused on not only meeting patient needs, but also listening to beneficiaries’ needs, preferences, and values. In this current regulatory environment, financial incentives do not necessarily support these aims.”

The group reported that providers have been slow to participate in value-based purchasing programs, making them less effective at improving care quality. For example, only half of the eligible professional in the Physician Quality Reporting System (PQRS) elected to participate in 2013, six years after the program started.

Other value-based purchasing initiatives may also achieve savings but at a cost. AMGA cited a study that showed Medicare bundled payment models reduced healthcare costs. However, the evidence did not indicate if savings would offset increased volume under the models.

Rather than using financial incentives, the group recommended implementing intrinsic or implicit incentives that promote care coordination and collaboration.

CMS use of intrinsic incentives worked to improve care quality and reduce costs under the Partnership for Patients initiative. The program decreased patient harm by 17 percent and saved Medicare $12 billion without using financial incentives.

The federal agency should develop incentives that provide technical assistance and encourage collaborative healthcare, AMGA stated.


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