An influential group that helps shape the nation’s Medicare policy resoundingly advocated for rethinking the program’s advanced alternative payment models, which have largely failed to achieve significant cost savings.
Many members of the Medicare Payment Advisory Commission expressed a desire to condense the sheer number of models during a virtual meeting Friday. The group also expressed an interest at taking a broader look at the program and creating more long-term goals. One problem is that many of these models have not produced the results stakeholders and policymakers were hoping for, MedPAC staff told commissioners.
Overall, the goal of these payment programs is to either reduce spending without reducing care quality or improve quality without increasing spending.
In evaluating the models over time, MedPAC staff said there were no net savings for Medicare in most models when factoring in performance payments. Commissioners expressed concern that the models create conflicting incentives, and with the large number, it’s hard to measure what’s working due to any one specific model. MedPAC Chairman Michael Chernew raised that specific issue in his comments Friday.
“If you’re running 40 models, which is roughly what are being run, and you test all of them supposedly against doing none of the models … the results you get is not just the sum of the results from all of the individual tests because the models interact with each other,” he said. “So, I think, basically CMS has a portfolio problem, and has to come up with a set of models that will work well together.”
Others also supported reducing the number of models. “I’m very much in favor of moving to fewer models. Medicare’s approach to date has been to put a whole lot of shots on goal by implementing lots of different models, Commissioner David Grabowski said. “The idea is that if you take enough shots, something is bound to go in. Unfortunately, as we’ve been discussing, there’s lots of unintended consequences to this approach.”
What was clear from Friday’s discussion is that commissioners are focused on condensing the models and drafting a strategy on how they can fit together. What was less clear was whether those models should be mandatory or voluntary. Members seemed split on this issue, as well as on whether some of those models should be condition-specific.
Others expressed a frustration that the models are built on top of a fee-for-service structure and that some clinicians can continue relying on being paid for volume rather than value. “We need to send a message that fee-for-service isn’t going to be business as usual,” Commissioner Brian DeBusk said. “We need to create a vision for what fee-for-service is going to look like as the trust fund depletes.” He suggested, for example, capping all FFS rates in 2027. “Maybe we don’t do updates to fee-for-service rates after a certain date,” DeBusk said.
In prior years, MedPAC has voiced similar concerns and noted the importance of moving away from incentives that reward volume over value. This year, the COVID-19 pandemic has also accelerated some of those worries in the larger industry as providers were forced to stop services. The resulting revenue decline put them in an untenable financial condition.
The Affordable Care Act was an important piece of legislation in teeing up ways to reimburse providers using alternative methods. The ACA also created the Center for Medicare and Medicaid Innovation, which is tasked with testing and creating APMs.
In 2015, the Medicare Access and CHIP Reauthorization Act went further and paved the way for advanced APMs that created 5% bonuses for physicians who participated. As of 2018, 183,000 clinicians participated in one of those models, up from 99,000 the year before.