Practice Economics
WASHINGTON – A federal advisory panel has straightforward advice for the government as it shifts towards value-based health care: Keep it simple.
At the Jan. 15 meeting of the Medicare Payment Advisory Commission (MedPAC), Commissioner Warner Thomas said, “I think one of our first principles should be to try to simplify this because it’s very complicated for a provider to try to understand what path to take and how to play in these situations. We want providers to engage in this and I think there is a lot of aversion because folks don’t understand it, and they’re not sure where to play or where not to play.”
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Officials at the Centers for Medicare & Medicaid Services are drafting the regulations needed to implement the Medicare Access & CHIP Reauthorization Act (MACRA); the proposed regulations are expected in the Spring.
MedPAC staff offered a number of principles they hope to see incorporated into the final design for alternative payment models (APMs) under the law, including:
• Incentive payments to providers should be distributed only if the entities they are a part of are able to successfully control cost, improve quality, or both.
• Entities should have enough beneficiaries to detect changes in spending and quality.
• Entities should be at risk for total Part A and Part B spending; in the future, Part D also might be measured.
• Entities should be allowed to share savings with beneficiaries.
• Regulatory relief should be possible.
Several MedPAC commissioners focused on how physicians are viewing the risk they will be asked to assume in an APM.
APMs are “an attempt to sort of jump start a movement in the direction of risk taking from a group that I don’t think is very thrilled about taking financial risk and has shown it by their actual practice in the face of efforts at least to nudge them in this direction,” said Commissioner Bill Gradison Jr., a former congressman from Ohio who served on the House Committee on Ways and Means. “Having said that, I wish I had a better understanding of the motivation of physicians in terms of what might move them in this direction. The assumption here is that the money will move them, and maybe it’s that simple, but I am not too sure about that.”
Commissioner Jack Hoadley, Ph.D., of the Health Policy Institute at Georgetown University, Washington, noted that the if there is too little risk involved, there tends to be little movement in changing the behavior.
Dr. Hoadley suggested that CMS could consider “looking at some of the models by which risk can be structured so it puts plenty of money on the line but it doesn’t do it in a way that’s going to get complicated in terms of physicians owing money back.”
Commissioners also recommended a tight threshold, at least early on, to show that cost containment and/or quality improvement are well established before an entity can move into an APM and receive a financial incentive.
“Let’s keep the initial round and definition tight and actually demand a track record before we qualify something as an alternative payment mechanism,” said Commissioner Kathy Buto, a U.S. and international health policy consultant and former deputy executive secretary in the U.S. Health & Human Services Department. “Once you open this up, you can’t close it down. You cannot walk it back. We are talking about paying a lot more money, 5% more and if the definition is too loose and too many entities get into it, you can never walk it back and you will be just adding to the expenditures.”