ACOs and value-based care evolution

A growing number of health systems, accountable care organizations and medical home-style practices are deploying care coordinators—which some call navigators. Health systems that have invested in care-coordination staffers include Bon Secours Health System, Summa Health System, Mercy Health Select, Partners HealthCare, Advocate Health Care, Banner Health and the University of Michigan Health System. That is changing how patients get care and it’s changing the jobs of doctors, nurses and other front-line providers.

Provider systems using care coordinators are reassigning responsibilities to optimize the use of their clinical professionals. Insurers also have expanded their use of care coordination, particularly in Medicare and Medicaid managed-care plans. That has freed doctors, advanced practice nurses and physician assistants to focus on their clinical duties. Meanwhile, nurses, social workers and case managers have been pressed into service as coordinators to help the most complex patients. Medical assistants and others with less clinical training and expertise visit patients at home with online support from doctors and nurses. Some care-coordination efforts train medical assistants or community health workers to collect more patient information or coach patients in behavior change.

There also are financial challenges for providers in covering the additional costs of these care-management services, including hiring new care coordinators. That’s because many insurers that still rely on traditional fee-for-service payment don’t necessarily reimburse for nonmedical care-management services.

The legislation repealing the outdated formula for setting Medicare physician payis not generous. It offers a pay increase of 0.5% a year over the next four years, followed by no increase for the next six years. That guarantees physician income from Medicare will lose ground to inflation over the next decade.

To make up for some of those lost earnings, the legislation offers a 5% bonus from 2020 to 2024 if physician practices by 2019 derive at least 25% of their Medicare revenue from accountable care organizationsbundled payments or other value-based reimbursement models. In the out years, the bonus goes to 0.75% of revenue per year.

That could lead some physicians to say that those minimal incentives aren’t worth pursuing. But providers will face an uncertain future if they think making it up in volume will remain a viable alternative.

First, a decade from now they will face a very different Medicare population. Aging baby boomers are accustomed to being in managed-care networks, which helps explain the rapid growth of Medicare Advantage plans.

Advantage plans are the perfect laboratories for extending and experimenting with value-based insurance design and value-based physician reimbursement. As Congress holds future Advantage payments in check—the likely scenario—many more plans will seek to transfer risk to their contracted physicians and other providers.

The CMS, meanwhile, is under intense pressure to move to an opt-in model for Medicare beneficiaries who become part of accountable care organizations, which are growing rapidly in the private sector. ACOs are designed to enlist physicians in value-based reimbursement schemes.

This ongoing expansion of Medicare Advantage and ACOs amounts to a pincer attack on fee-for-service medicine in Medicare.

Beneficiaries’ out-of-pocket costs will change because of the doc-fix legislation. It bars Medigap plans from offering first-dollar coverage.

This additional cost saving will increase demands from beneficiaries to know exactly how much they will pay. That in turn will lead many to ask more questions about why a particular test or procedure is needed in the first place.

Given the rapid expansion of consumer-directed health plans in the private sector, it’s likely that close to half of the next generation of seniors entering Medicare will have experienced life in a high-deductible plan where at least the first $1,000 is on them.

Seniors won’t be the only ones raising questions. According to a recent survey, high-deductible plans already covered 23% of all employees last year, up from 18% in 2013. The average deductible for individuals in those plans was $2,500.

As a result, a growing share of the population is being trained to ask questions about the quality, price and necessity of the care they are being offered.

Given these trends, the healthcare consumption patterns of the next generation of senior beneficiaries may well end up looking more like frugal Minnesotans than profligate Floridians. As researchers associated with the Dartmouth Atlas of Health Care have long shown, beneficiaries who flit from specialist to specialist achieve no better outcomes for all the increased cost.

Younger physicians are not only adapting to this emerging new world, they are forcing the changes. They are far more likely to seek full-time employment with hospitals or large group practices than to hang out their own shingle in a physician-owned practice. With even the fee-for-service-oriented doctors’ lobbying groups and the congressional doctors’ caucus overwhelmingly backing the doc-fix bill, it’s now clear that Medicare’s physician reimbursement system is evolving slowly toward value-based care.

CMS issues draft Stage 3 rules for EHR incentive program

Draft regulations the CMS issued Friday would make significant changes to the federal incentive program that requires doctors and hospitals to adopt and meaningfully use electronic health records.

With some exceptions, hospitals, physicians and other eligible professionals would be expected to conform to the rules (PDF) by 2018.

Physicians and hospitals have lobbied aggressively for the CMS to relax the program’s parameters. The agency said in January it would issue separate regulations narrowing the reporting period to 90 days for attesting to meeting the requirements for 2015.

The proposed rule would require nearly all providers to report on a full calendar-year cycle beginning in 2017 and would require electronic reporting of clinical quality measures beginning in 2018.

“The release of today’s rule demonstrates that the agency continues to create policies for the future without fixing the problems the program faces today,” the American Hospital Association said in a statement Friday. “It is difficult to understand the rush to raise the bar yet again, when only 35% of hospitals and a small fraction of physicians have met the Stage 2 requirements.”

Physicians and other eligible professionals who fail to meet the requirements are expected to pay $500 million in Medicare penalties between 2018 and 2020, according to the proposed rule. The agency said it expects all hospitals to achieve meaningful use by 2018.

Upgrading EHRs to meet the requirements, the agency estimates, will cost physicians $54,000, plus $10,000 in annual maintenance costs. That’s at the high end of what the Congressional Budget Office calculated in 2008. The CMS said upgrades would cost hospitals $5 million, plus $1 million for annual maintenance.

The rule would give providers three options for ensuring patient engagement with their care, of which providers must fulfill two: access to their own records; secure messaging between patients and providers; and collection of patient-generated health data.

The first two elements had attracted consistent criticism from providers in previous stages of the program, but the exact impact is unclear. In the Stage 2 rules, 5% of patients would have to view, download or transmit data from their records, which providers said made them responsible for the engagement regardless of whether patients were interested.

The new rule would raise that engagement threshold to 25% of patients downloading or transmitting their health data. But providers can now satisfy the requirement with an application programming interface, or API, that allows third-party developers to access the data on their patients’ behalf.

The rule would also impose a similar increase in the rate of secure messaging: from 5% in Stage 2, to 25% in Stage 3.

Meanwhile, the provision would compel providers to collect patient-generated health data in their EHRs from devices such as Fitbits or mobile apps developed with Apple’s Health Kit API. Providers would have to capture data from 15% of their patients to comply.

The digital health industry pushed aggressively for the CMS to push providers to collect the data their products generate. “I’m beyond pleased and finally vindicated,” said Robert Jarrin, Qualcomm’s senior director of government affairs.

The proposal also raises the thresholds for “computerized physician order entry,” which allows doctors to send requests for drugs, lab tests and imaging electronically. Providers would be expected to order 80% of medications electronically, up from 60% under Stage 2 of the program. The requirement for electronic lab and imaging orders would rise to 60% from 30%.

For imaging, the proposed rule expands the requirement from radiology to a broader array of tests, including ultrasound, MRI and CT scans.

Separate regulations proposed by HHS’ Office of the National Coordinator for Health Information Technology overhaul the certification program (PDF) for healthcare IT, which is intended to give healthcare providers certainty that the software they buy can perform the functions required under the meaningful-use program.

Comments on the proposals are due May 29.