- CMS should support small and independent practices by developing physician-led Advanced Alternative Payment Models (APMs), advised a group of provider and industry organizations.
The American Academy of Family Physicians (AAFP), Medical Group Management Group Association (MGMA), Aledade, and four other organizations called on CMS Administrator Seema Verma to prioritize putting physician practices at financial risk for high-quality care, not just large hospital and health systems.
“Physicians – especially independent physician practices– are the lynchpin of our nation’s healthcare system,” the group wrote. “They have repeatedly demonstrated their superior ability to generate positive results in value-based care arrangements, both in improved health outcomes and reduced costs. They are the most powerful tool we have to foster an affordable, accessible system that puts patients first.”
Therefore, CMS should create and offer physician-led alternative payment models with downside financial risk. The models should qualify for maximum incentive payments under MACRA’s Advanced APM pathway, but still take into account the financial situation of small and independent practices.
The financial risk structures within the physician-led Advanced APMs should be proportional to the finances of small and independent practices. Risk also should not be so great that practice leaders consider merging with larger organizations to succeed.
Approximately 58 percent of physicians considered merging with a larger organization to decrease the pressure of financial risk in alternative payment models, a 2016 Deloitte survey found. Participants agreed that MACRA and alternative payment models would drive between one- and two-thirds of remaining independent physicians to consolidate in the next three years.
The coalition pointed to the new Medicare Shared Savings Program (MSSP) track as an example of a suitable Advanced APM for small and independent practices. MSSP Track 1+ serves as a bridge between shared savings only and downside financial risk tracks. The track ramps up financial risk.
Practices in Track 1+ can also earn Advanced APM incentives without fully emerging themselves in downside financial risk.
In addition, physician-led Advanced APMs should include predictable financial benchmarks with regional and risk adjustments, the organizations suggested.
Financial benchmarks based on historical spending can make it difficult for providers to realize savings over time. Alternative payment programs, such as the MSSP, started by using this methodology.
However, CMS acknowledged the disadvantages of historical spending benchmarks and created the Next Generation ACO model. The Next Generation program adjusts benchmarks for regional and national spending trends to encourage cost-efficient ACOs to join the alternative payment model.
The group identified the Next Generation ACO model’s benchmarking methodology as a good place to state with physician-led Advanced APM development.
“As part of this effort, CMS could consider creating a new, more flexible and sustainable version of Next Generation ACO for full risk-taking within traditional Medicare as well as other new models focused on moving physician financials to value,” the group wrote.
Additionally, the seven organizations urged CMS to support small and independent physicians with value-based reimbursement by leveling the playing field in local markets. Alternative payment models and downside financial risk drive some practices to consolidate or merge with larger organizations to shoulder the financial and administrative components of value-based reimbursement.
But CMS can counter the incentives to consolidate by promoting patient choice and provider competition in local markets. To improve patient choice and provider competition, the organizations advised CMS to develop payment parity across practice settings.
The federal agency should also prohibit anti-competitive behaviors, including data blocking, anti-tiering provisions, and physician non-compete requirements.
Provider competition should also be a CMS priority in the Medicare Advantage space, the organizations added.
Small and independent practices are starting to manage financial risk and implement population health management under current alternative payment models. As the practices gain experience, providers will develop the skills to run their own Medicare Advantage plans.
However, practices face a number of barriers with creating provider-run Medicare Advantage plans. A major issue with provider-run plans is that they have not demonstrated profitability. A recent Robert Wood Johnson Foundation study showed that only four of 37 provider-sponsored health plans were profitable after five years.
The coalition advised CMS to implement an Innovation Center demonstration that allows providers interested in entering the Medicare Advantage plan market to contract directly with the federal agency to take on administrative plan functions, such as claims processing and fraud detection.
The seven organizations also recommended steps for CMS to advanced consumer-directed care.
Patients can play an active role in healthcare decision-making if CMS offers incentives to do so. CMS should consider implementing models that allow Medicare beneficiaries to share in savings if their primary care providers participate in a shared savings model. Beneficiaries could also receive additional benefits from their physicians or see their cost sharing reduced.
The industry groups plan to collaborate with CMS to develop APMs and financial risk structures that benefit both physician practices and patients.
“We look forward to working with you to implement and test models that continue to put physicians where they should be – at the center of our healthcare system,” the letter concluded.