Providers in APMs Had Head Start with Managing COVID-19 Surge

May 18, 2020 - Healthcare providers participating in alternative payment models leveraged their value-based care capabilities to safely manage the COVID-19 crisis, a new survey showed.

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The survey of 245 healthcare organizations conducted by healthcare improvement company Premier, Inc. found that 82 percent of alternative payment model (APM) participants reported using care management support to manage COVID-19 and other patients, opposed to just 51 percent of those not in APMs.

Additionally, APM participants were more likely to leverage other value-based care capabilities in response to the crisis compared to non-APM respondents, including triage call centers (55 percent versus 31 percent), remote patient monitoring (49 percent versus 30 percent), population health data to manage and predict COVID-19 cases (43 percent versus 20 percent), and claims data to understand care delivered outside of the acute care setting (29 percent versus 13 percent).

“Respondents participating in APMs had a significant head start over other healthcare providers in being able to provide quality and preventive care for their covered lives, all while managing an influx of emergency COVID-19 cases,” said Joe Damore, vice president of population health at Premier. “The sad paradox is that all these commendable efforts may come with a heavy cost.”

READ MORE: Adapting Patient-Friendly Medical Billing to a COVID-19 World

Providers in APMs are reimbursed based not only on the quality of care delivered, but total costs associated with high-quality care. Added investments, increased emergency department utilization, and any other added expenses to clear the backlog of elective procedures that were delayed during the COVID-19 crisis all have the potential to significantly increase total cost of care, Damore explained.

“This could lead to penalties in some Medicare and many commercial APMs – even though the pandemic was beyond the participants’ control,” said Damore.

The survey confirmed that more APM participants are at risk of a penalty. About 54 percent of respondents in downside financial risk APMs across all payers said they anticipate incurring losses that must be repaid to some payers. The costs are due to the surge in COVID-19 patients and the added cost of treating higher acuity patients who will be increasingly seeking care, the survey stated.

Meanwhile, 85 percent of these respondents also reported declines in fee-for-service revenues of 30 percent or more due to canceled or delayed ambulatory care visits and elective or diagnostic procedures.

The findings indicate a growing need to provide relief to healthcare providers engaging with value-based care through APMs during the public health emergency, Premier stated.

READ MORE: AHA: Hospitals Losing $50.7B a Month Fighting the Coronavirus

The company has already urged CMS to offer specific support for APM participants, including allowing organizations in the models to move to no downside risk tracks with modified upside risk. Other recommendations from Premier included:

• Implementing the extreme and uncontrollable circumstances policy across all CMS Innovation Center programs
• Accelerating pending shared savings and MACRA bonus payments to healthcare providers to help meet cash flow challenges
• Converting all quality measures to pay for reporting
• Giving accountable care organizations 90 days to determine if they want to drop out of programs without penalty in 2020

The Health Care Transformation Task Force also recently provided Congress with recommendations on how to support APM providers during the pandemic. Chief among the task force’s wishes was APM infrastructure support payments for providers in Advanced APMs.

Other recommendations from the task force included allowing accountable care organizations (ACO) to lower financial risk in exchange for less shared savings opportunity, extending the Next Generation ACO model for another year, and advancing shared savings and other incentive payments.

Respondents to the Premier survey also indicated a desire for CMS to make several temporary waivers granted during the public health emergency permanent. Chief among the waivers were telehealth flexibilities that allow providers to earn full reimbursement for virtual visits for Medicare beneficiaries, with 93 percent of respondents citing it.

Another 59 percent of respondents also said they want workforce flexibility waivers to remain after the crisis. The waivers enable health systems to use nurse practitioners and physician assistants for routine tasks.

READ MORE: Key Waivers, Regulatory Flexibility for Providers During COVID-19

Equally as cited was the skilled nursing facility three-day rule waiver. In the survey, 59 percent of respondents said they want CMS to make the waiver part of permanent policy. CMS already allows APM participants in the Medicare Shared Savings Program to use the waiver as long as the organization takes on sufficient downside financial risk.

“While the exact losses and penalties incurred are still open questions, there’s no doubt that some relief must be provided to APM participants,” concluded Damore. “The absolute last thing we want is for a pandemic to result in financial penalties that exacerbate an already dire financial situation for many of America’s healthcare providers as a result of months of lost revenue from planned admissions. Action is needed to keep a focus on the movement to value-based care, preserving the progress and investments made to date.”