FEBRUARY 4, 2019

Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National Pay for Performance Summit, the National HIPAA Summit,
and the National Population Health Colloquium

Value-Based Care Model Needs More Review Before Implementation in Workers' Comp
At face value, value-based care (VBC) seems like the answer to some of the woes associated with the fee for service model currently used in workers' compensation. However, several factors need to be considered to determine whether it can be implemented into a payor's program. A model that reimburses for treatment based on measuring the quality and cost of care rather than on quantity, it's currently being used by government and commercial healthcare payors, said Dr. Randall Lea, orthopedic surgeon and senior research fellow at the Mass.-based Workers Compensation Research Institute (WCRI). During a recent WCRI webinar on the subject, he explained the concept and examined the factors necessary to implement the model. The model consists of three parts, Dr. Lea said. A payment method, quality measures and an infrastructure to operationalize features. The overarching strategy, he said, is to decrease costs while increasing the quality of care. (Claims Journal, January 22, 2019)

A Look Inside CMS' New Medicare Shared Savings Program
On Dec. 21, 2018, the Centers for Medicare & Medicaid Services issued a final rule[1] establishing the "Pathways to Success" program, which overhauls the Medicare shared savings program, or MSSP, for accountable care organizations. The changes primarily involve provisions for new beneficiary incentives, coverage of telehealth services and choice of beneficiary assignment methodology. The principal changes from the proposed rule announced in August, are adjustments to the proposed shared savings cap for a participation option and the proposed definition of low- and high-revenue ACOs. In addition to the changes contained in the final rule, in November CMS finalized certain changes to the MSSP as part of its calendar year 2019 Physician Fee Schedule final rule.[2] Those changes originally had been introduced in the proposed rule and include: (1) a new certified electronic health record technology, or CEHRT, threshold criterion to determine an ACO's eligibility for program participation to promote interoperability among ACO providers and suppliers; (2) refinements to the voluntary alignment process, allowing beneficiaries to select an ACO professional, regardless of specialty, as a primary care clinician; (3) policies intended to address extreme and uncontrollable circumstances experienced by ACOs (e.g., natural disasters) for performance year 2018 and subsequent years; and (4) revisions to the primary care services definition used in beneficiary assignment. (Law 360, January 14, 2019; this site requires registration)

Beyond The HER: Shifting Payment Models Call for Hospital Investment in New Technology Areas

Executive summary
What kinds of technology are health systems investing in, and do investments vary depending on whether they have more payments based on quality and value?

To answer this question, Deloitte researchers analyzed data from approximately 4,500 US hospitals between 2012 and 2016. Two notable findings emerged:

  1. Hospitals with more payments based on quality and value were more likely to adopt technologies for population health and care coordination, data aggregation and management, and reporting and analytics.
  2. Few hospitals have been investing in patient and provider engagement technologies or core applications that support operational and financial aspects of their business (such as supply chain management and revenue cycle management). For these kinds of technologies, we did not see differences in adoption based on the share of payments based on quality and value.

As hospital revenue tips more toward payments based on outcomes and risk and more consumers show an interest in taking their care into their own hands, health care systems--even those mainly working in traditional payment environments--should go beyond the electronic health record (EHR) to meet the demands of the new market. They should consider investing more in technology that supports patient and provider engagement and core applications. They may also need to make significant upgrades to core systems to adopt the capabilities required to manage downside risk under these new contracts. More recent evidence suggests that some leading health systems are investing in these areas as they gain more experience with new payment models. (Deloitte Insights, January 11, 2019)

Former HHS Secretary Leavitt: Why it's Time to Stop Kicking Value-Based Care Can Down the Road
As the buzz around a single-payer health system based around Medicare grows, a former Department of Health and Human Services secretary says it's crucial to keep eyes on a more pressing problem: Medicare is running out of money. The policy conversation should focus on ensuring Medicare's long-term sustainability and addressing its impending insolvency. The Medicare Hospital Insurance Fund, or Part A, could run out of money by as early as 2026. "We ought to deal with the reality of the mess we have before we begin to expand," Leavitt said. The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. Leavitt said he foresees Medicare Advantage (MA) and Part D as guides for the future evolution of health policy. Success in those programs prove that arming consumers with information and choices can drive a more effective and competitive system. He also projects an emphasis on integrated care delivery that has value packed in. And, he said, the high projected cost of a "Medicare for all" approach is "impossible to ignore." Researchers have estimated that these policy proposals could cost as much as $32 trillion over the course of a decade. In a whitepaper published last week, Leavitt argued that a bipartisan commitment to value-based care would be crucial to avoid Medicare's impending financial woes. (FierceHealthcare, January 23, 2019)

Top 10 Smart Ideas to Add Value to Patient Care
Young patients are keen on having a technologically connected healthcare experience, and physicians can easily achieve it through use of cost-effective / cost-free state-of-art technology clinics / hospitals. "The only constant thing in this world is change." This applies equally well, to the profession of medicine which is constantly changing with time. Thus, if a previously successful medicine practice doses not change with time, it will lose steam and become redundant. On the other hand, steps taken to adjust with upcoming future will bear huge dividends. Here are 10 smart ideas categories which will align any practice with future the author details in the article:

  1. Heart Sounds
  2. Embrace technological advances / have some of these gizmos the clinic
  3. Be Internet and Social Media Savvy
    a. Build a mobile-responsive website and host contents
    b. Start a blog
    c. Encourage online reviews
  4. Availability at all times
  5. Deliver quality service
  6. Active para-medical support
  7. Support Groups and Group Appointments
  8. Self-care Interventions for Family Caregivers
  9. Long term monitoring
  10. Best Practice Alerts

(Health World, January 26, 2019)

Industry Voices--How Data Analytics Can Help Physician Practices Transition to Value-Based Care Models
In order to grapple with spending increases, the U.S. healthcare industry is transforming the way physicians are compensated to provide care to patients from the current fee-for-service (FFS) model to one in which medical providers are paid a flat fee for servicing a defined group of patients. This pivot in reimbursement is often discussed as far off. A survey by Numerof & Associates, a St. Louis, Missouri-based healthcare strategy consultancy, finds that most health organizations have been slow to make the shift: 54% receive less than 10% of their revenue from risk-based agreements. However, as consumers become more sophisticated, and payers and health systems become more emboldened to wring out costs, we expect to see the shift in reimbursement models take off in the coming years. Provider groups that embrace this shift now have an opportunity to gain meaningful first-mover advantages. Policy changes will further enhance the transition. Annual FFS pricing increases are set by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), and physicians treating Medicare patients will receive FFS raises of 0.5% this year and next. Then, from 2020 through 2024, there will be no automatic payment increases. (FierceHealthcare, January 18, 2019)

Medicare: Voluntary and Mandatory Episode-Based Payment Models and Their Participants

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Panel I: Private Sector Value-based Payment Initiatives

Julian Harris
President, CareAllies, a CIGNA Company

Brigitte Nettesheim
President, Joint Venture Market Operations, Aetna

Hoangmai H. Pham
Vice President, Provider Alignment Solutions, Anthem

Amy Smith
Manager, Episodes of Care, Horizon Blue Cross Blue Shield of New Jersey

Jeff Micklos
Executive Director, Health Care Transformation Task Force