Five new quality and payment initiatives providers should watch

Hart Juliana
Juliana Hart, BSN, MPH, Director of Provider Solutions Verisk Health

It is no secret that healthcare reform is changing the playing field for providers. New reporting requirements and changes in reimbursement, among other drivers, are forcing providers to align their quality and payment initiatives to successfully move towards value-based care. While this transition is occurring gradually, factors such as geography, market share, and new federal programs play a role in determining which path forward might be best for an organization.

Over the past two years, the Centers for Medicare & Medicaid Services (CMS) has shown increased interest in quality metrics and the payment reform movement. CMS launched several new initiatives focused on provider incentives and penalties designed to spur providers along. Last year, CMS announced that the agency was aiming to have 30 percent of Medicare payments tied to quality or value by the end of 2016, increasing to 50 percent by the end of 2018.

In March of this year, CMS estimated that it had already hit its first target, 11 months ahead of schedule. The 30 percent goal was met when 121 new Accountable Care Organizations (ACOs) joined the Medicare program, in addition to new participants in models such as the Bundled Payments for Care Improvement (BPCI) initiative and the Comprehensive Primary Care (CPC) initiative.

Further expanding its commitment to value-based care, CMS has sponsored a collaborative partnership called the Health Care Payment Learning and Action Network. Working in collaboration with partners in private, public, and non-profit sectors, the partnership is focused on transforming the nation’s healthcare system to emphasize value over volume. A number of initiatives are under development, including Alternative Payment Models (APM) Framework, Patient Attribution, Financial Benchmarking, and Elective Joint Replacement.

Provider organizations should take note of the following quality and payment initiatives that have emerged from the CMS Innovation Center. Although details on some of these initiatives have yet to be defined, providers need to plan ahead and understand how these policies and programs might affect their organizations.

1. New Medicare ACO Investment Model (AIM)
To focus on rural and underserved areas, CMS will continue the Advance Payment ACO Model, under which selected physician-based and rural providers working together to provide high-quality care for Medicare beneficiaries receive payments that can be used for investments in their care coordination infrastructure. CMS will provide up to $114 million in upfront investments to nearly 75 Medicare Shared Shavings Program ACOs starting in 2016.

2. New Bundled Payment Pilot

To reduce costs for hip and knee replacements, also for Medicare beneficiaries, CMS announced the Comprehensive Care for Joint Replacement (CJR) program, the goal of which is to improve quality and care coordination among hospitals, physicians, and post-acute care providers from initial hospitalization through recovery. The program is mandatory for hospitals located in designated MSAs that are paid under the Inpatient Prospective Payment System (IPPS) (with some exceptions for participants in the BPCI) and will assess the impact of bundled payment and quality measurement.

3. Next Generation ACO Model

The Next Generation ACO Model offers a new opportunity in accountable care, one that sets predictable financial targets, enables greater opportunities to coordinate care between providers and beneficiaries, and aims to attain the highest quality standards of care. The model allows provider groups with demonstrable ACO experience to assume higher levels of financial risk and reward than those currently available under the Pioneer Model and Medicare Shared Savings Program (MSSP). The goal is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for original Medicare fee-for-service (FFS) beneficiaries.

4. Expansion of Five-Star Ratings

Designed to help educate and inform patients, the Medicare Five-Star Quality Rating System has continued to see success and drive improvements in quality of care. As a result, the program will expand to provide evaluations of additional care delivery settings. For example, hospital ratings will be publicly available on the Hospital Compare website in April 2016.

5. Medicare Access & CHIP Reauthorization Act of 2015 (MACRA)

Over the next five years, MACRA will change the method of financing for providers from the sustainable growth rate (SGR) formula to new methodologies that will shift incentives away from traditional FFS to value-based care delivery. Providers will need to choose either Track 1, which is FFS with a portion of payments tied to quality and outcome measures, or Track 2, which will shift all or part of their Medicare payments to an alternative payment model.

For both current PQRS reporting and its continued mandate under MACRA, participation is not an option, and failure to report quality measures will result in a 2 percent decrease in Medicare reimbursement.

In many cases, to achieve success with these initiatives, providers must develop new core competencies, such as:

  • Risk identification and stratification for populations of patients
  • Medical cost management
  • Population health program design and evaluation
  • Provider performance assessment
  • Quality assessment and reporting
  • Risk contract management and budgeting
  • Out-of-network insights and utilization management

Fundamental to these competencies is a mastery of data analytics. With the help of analytics, providers can identify the risk burden of their population, as well as the critical cost, quality, and utilization metrics influencing their performance – critical components of any value-based strategy.

accountable care organizations, ACO Investment Model, ACOs, AIM, Bundled Payments for Care Improvement, Centers for Medicare & Medicaid Services, CMS, Comprehensive Primary Care, Health Care Payment Learning and Action Network, reimbursement, Verisk Health


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