Value-Based Care News

CMS, AMA Outline Evolving Healthcare Market Opportunities

By Jacqueline DiChiara

- The Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA) discussed the evolving healthcare market yesterday at the J.P. Morgan Healthcare Conference in San Francisco, California.

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Their discussion was fittingly titled: “A Discussion with CMS & AMA on the Evolving Healthcare Market.” 

Here is a selected summary of yesterday evening’s highlights from both Andy Slavitt, CMS’s Acting Administrator, and James L. Madara, MD, AMA’s CEO and Executive Vice President.

CMS says ACOs will pave the way for alternative payment models

Slavitt said CMS is working on a series of major policy areas that will shape the healthcare industry in the coming year.

“I’m a believer in the maxim that it’s always 90 percent about implementation and, possibly to the annoyance of my colleagues, it’s a constant refrain for me," Slavitt stated.

CMS remains focused on initiating new consumer provider facing capabilities. CMS is working to help scale, nurture them, and mature them, Slavitt added.

“2015 was a meaningful year for execution on a number of fronts. From committing publically to change how we pay for care, to leading the largest data transparency initiative in healthcare, releasing tens of millions of lines of data, new consumer websites.”

“To investing in the growth of Medicare Advantage, to seeing record levels of quality, safety, and continued low medical trend, to implementing the ICD-10 changeover – the biggest event that no one heard about – and of course expanding Medicaid into 3 new states.”

“We’ve now crossed 17 million newly insured since the start of the ACA and have had a strong start to a third open enrollment.”

Slavitt asserted CMS is working on three important levels.

“First, setting policy and acting as a regulator to make sure the laws Congress passes and the rules we set advance the interest of consumers and taxpayers.”

“Second, we act as an operator, providing service to our beneficiaries, technical support to our healthcare providers, partnering with states and commercial health plans to deliver our programs. Our mantra here is to give people the tools they need to thrive in the face of significant change.”

“Third, we often operate as a market signaler, acting as a catalyst to bring together the disparate pieces of healthcare to make improvement more rapidly and more efficiently, such as how we pay for care.”

“2016 will be an enormous and pivotal year of progress and it’s starting off with a bang. We announced today the participants in the Next Generation ACO Model.”

“In Next Gen, provider groups will take full responsibility for a patient’s care and have innovative options like telemedicine, home visits, and direct consumer and incentive engagement options. It’s a model driven by all the lessons learned and feedback from previous participants and results. And the news is very good.”

Slavitt asserted that with 21 new Next Generation ACOs, there will now be over 475 total ACOs with 30,000 physicians participating across the country. This includes 64 that are two-sided or full-risk, up from 19 last year.

“My read of this news is that in 2016, we will not only have more ACOs, we will have better ACOs.”

Slavitt said there are now 8.9 million Medicare fee-for-service beneficiaries. 49 states and the District of Columbia will now be part of an ACO.

“Many have wondered whether ACOs would succeed or would end up in the dustbin of healthcare’s three-letter acronyms.”

Slavitt confirmed execution of the first stage proves challenging. Slavitt predicted ACOs will pave the way for an innovative approach to alternative payment models.

“Think of Next Gen Model like the second generation iPhone. There will be progress, setbacks, and we will continue to improve.”

The implementation of the bipartisan MACRA legislation is one particularly sizable item on CMS’s agenda, Slavitt said.

This program brings pay-for-value to the mainstream through the Merit-Based Incentive Payment System (MIPS), he explained.

CMS is subsequently compelled to measure physicians in four categories: quality, cost technology utilization, and practice improvement.

“The stakes are high for this program. As any physician will tell you, physician burden and frustration levels are real. Programs designed to improve often distract. Done poorly, measures are divorced from how physicians practice and add to the cynicism where people who build these programs just don’t get it.”

Slavitt said the program requires a streamlined approach so physicians can focus on patients.

“We’re committed to building a program that is flexible and adapts around the goals of the providers’ individual practice and population. I’d be remiss if I didn’t add that like any good startup, we’ll start small and leave a lot of tool building opportunities for the private sector.”

AMA: We are empowering physicians to deliver higher value care

“When one thinks of the evolving healthcare market – technology, digital revolution, biomedical advances, precision medicine – these are the things that come to mind," Madara stated. 

"But we sometimes lose track that the overarching driver that will dictate the direction of innovation is the shifting nature of disease burden itself."

Chronic disease is on the rise, he added. The healthcare structure still favors an outdated paradigm focused on acute disease, he said. According to estimates from the CDC, over 80 percent of the $3 trillion annual healthcare dollars spent is tied to chronic disease.

“We are less good at cures than we would like to be, but not bad at taking previously acute fatal disease and converting it to a chronic, manageable condition.”

Madara asserted this shift has consequences that cannot go ignored.

“There has been a slow steady progressive proportional shift from inpatient to ambulatory and we’re now seeing a beginning of a shift from ambulatory to home as driven by technology and science. Given the central role that physicians play in healthcare, the centrality shown by the majority of the $3 trillion spent determined by physicians’ decisions.”

Madara additionally outlined what the future of healthcare looks like. He explained three specific focus areas that represent the end-result of the AMA’s first long-term strategic plan, started four years ago.

“First, we want to radically restructure our medical schools to meet future needs. The med school curriculum content is of course updated all the time with new discovery and information. But the structure of our medical school curriculum has been pretty much the same for almost a century.”

Madara emphasized there needs to be a forthcoming shift towards measured competencies. New focuses include practice improvement, care delivery science, team-based education, ready adaption to technological advances, ambulatory care, care continuity, and a greater connection with those community assets tied to chronic disease care.

A severely deficient curriculum structure has only been holding students back, said Madara. To address these problems the AMA convened three years ago to create what he called the medical school of the future.

The AMA launched a diverse group of 11 medical schools – the AMA medical school consortium. With a recent expansion to 32 schools, Madara said the consortium represents a quarter of all medical schools nationwide. The AMA supports this collaborative consortium effort with an investiture topping $12 million.

“The second long-term focus area is a project in physician satisfaction practice sustainability aimed toward creating more efficient and sustainable physician practices.”

The AMA has been collaborating with top managing consulting firms to study practices in detail, said Madara.

“We’ve identified a diverse array of addressable problems. There’s a lot of whitespace problems in these areas.

Madara said products are already emerging to address practice needs.

Although the healthcare industry does not want to go back to paper, current ways of doing things are simply not interoperable, he stated. Electronic medical records pose beneficial when it comes to claims and risk mitigation but not so much for the delivery of organized clinical data needed at the point of care, he added.

The AMA is nonetheless working with CMS to address problems with existing incentive programs, he said. Discussions involve the formal rule-making process, and the proper design and execution of new value-based care models.

“Prior to the last quarter of this year, the rules will be released. The rules will come into effect of January of 2017 to affect payment in 2019. A lot has to be done really quickly. It seems really daunting but the good news is Andy and [the AMA] have had some practice working together on challenging implementation issues.”

“Earlier this year, we negotiated a framework for implementing a major coding change that was really our equivalent of Y2K. And so far we’ve avoided any major disruptions. That’s because AMA and CMS share a motivation to empower physicians to deliver higher value care with reduced regulatory burden."