Policy & Regulation News

History of Value-Based, Accountable Care Models at CMS

By Jacqueline DiChiara

- Improving the overall quality and efficiency of medical care via physicians’ active execution of “meaningful and actionable information” is necessary to promote reimbursement rewarding “value rather than volume,” according to the Centers for Medicare & Medicaid Services (CMS).

In light of this goal, CMS has pegged the Hospital Value-Based Purchasing (VBP) program as an important component of its “long-standing effort to link Medicare’s payment system to a value-based system to improve healthcare quality, including the quality of care provided in the inpatient hospital setting.”

CMS Deputy Administrator for Innovation and Quality and Chief Medical Officer Patrick Conway, MD, credits the program with demonstrating hospital performance on a number of quality metrics:

Hospital Value-Based Purchasing Program provides a useful snapshot of how hospitals are performing on important quality indicators of patient care, quality, efficiency, and well-being. It is one of many Affordable Care Act programs Medicare is implementing to pay for quality instead of quantity. The program ties a portion of payments to hospitals’ performance on certain quality measures such as death within 30 days after a heart attack and patient experience of care.

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  • Congress authorized Inpatient Hospital VBP within the Affordable Care Act. CMS states value-based purchasing accompanies payment systems accounting for the greatest share of Medicare spending. The program utilizes the Hospital Inpatient Quality Reporting (IQR) Program’s hospital quality data reporting infrastructure.

    Approximately 3,500 hospitals nationwide expect affected payments for inpatient stays. Participating hospitals receive payments based on care quality — not just magnitude — for inpatient acute care services provided.

    The Department of Health & Human Services (HHS) recently announced expectations for value-based goals and timelines as part of the movement away from fee-for-service reimbursement.

    Anticipated future goals by 2016’s end include the possibility that 30 percent of fee-for-service Medicare payments will become value-based payments via bundled payment arrangements, ACOs, or similar alternative payment models. This number is expected to rise to 50 percent of payments before the beginning of 2019.

    HHS proposes a goal for VBP and the Hospital Readmissions Reduction programs to shift 85 percent of traditional Medicare payments to become quality-based by 2016 with a heavier 90 percent shift possible by 2018.

    Defining ACOs and the forms they take

    Patients deserve professional respect and personal consideration from medical professionals who best comprehend how to provide “the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.” That’s the belief at CMS.

    At that most general level, accountable care organizations (ACOs) are units ofhealthcare providers — including doctors and hospitals — who voluntarily collaborate to “ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors,” according to CMS. Ultimately, the end-result of a successful ACO is shared savings for both payers and providers.

    Medicare offers three different ACO programs to help meet and exceed such objectives.

    First is the Medicare Shared Savings Program (MSSP) which CMS explains “is designed to improve beneficiary outcomes and increase value of care by “[facilitates] coordination and cooperation among providers to improve the quality of care for Medicare Fee-For-Service (FFS) beneficiaries and reduce unnecessary costs.” It is also promotes accountability for Medicare FFS beneficiaries’ care, requires coordinated care for all services provided under Medicare FFS, and encourages investment in infrastructure and redesigned care processes.

    Although participation is voluntary, CMS notes that MSSP “will reward ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first.”

    Second is the Advance Payment ACO Model catering to “physician-based and rural providers who have come together voluntarily to give coordinated high quality care to the Medicare patients they serve,” says CMS.

    Participants will upfront, monthly payments for them to invest in care coordination tools and services. Currently, 35 ACOs are participating and receiving three types of payment advances: upfront/fixed payment, upfront/variable payment based on the number of historically-assigned beneficiaries, or a varying monthly payment contingent on ACO size.

    Last is the Pioneer ACO Model, the most aggressive of all CMS-backed ACOs and a program no longer accepting applications. This early adopter model allows provider groups “to move rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Services Program,” the federal agency explains.