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Bridging the Divide in Medicare Programs Requirements

Key takeaways:

  • Medicare programs have grown considerably over the last decade – creating real implications for healthcare providers.
  • Existing policies in the Medicare Advantage (MA) and Medicare Shared Savings Program (MSSP) programs are making it more difficult for MSSP ACOs to fulfill their statutory imperative.
  • In this blog, we break down these conflicts and highlight opportunities to strengthen the quality and sustainability of these programs for plans, providers and beneficiaries.

The aim of the Medicare Shared Savings Program (MSSP) is to promote accountability for a patient population, coordinate items and services under parts A and B, and encourage investment in infrastructure and redesigned processes for high-quality care delivery.

Within the MSSP program, growth has been exponential with nearly 11 million Medicare beneficiaries receiving care from an MSSP ACO in 2023. Similarly, Medicare Advantage (MA) plans have seen a more than 300 percent increase in enrollment from 2006 through 2022.

The considerable growth in Medicare programs over the last decade creates real implications for healthcare providers, and as MA penetration increases, it’s apparent that existing policies in each program (MA and MSSP) make it more difficult for MSSP ACOs to fulfill their statutory imperative.

Below we break down three key conflicts between MA and other Medicare programs – and highlight opportunities to strengthen the quality and sustainability of these programs for plans, providers and beneficiaries.

Conflict 1: Attribution

MA plans use an entirely different “attribution” methodology (i.e., health plan enrollment) compared to MSSP ACOs or other Medicare payment models, which creates confusion among providers.

As entities operating under capitated payment arrangements, MA plans have greater flexibility than ACOs to invest in and develop capabilities for data measurement and analysis around social determinants of health (SDOH). With this relative resource boost, MA plans have incentive to target advertising and enrollment recruitment at those beneficiaries who have more favorable risk profiles.

Health plan “cherry-picking” can leave MSSP ACOs and other Medicare providers with unfavorable risk mix without appropriate payment. At the same time, voluntary alignment – an ACO’s mechanism for non-claims-based “enrollment” in the ACO – carries significant requirements and restrictions that ACOs must meet to voluntarily align a Medicare beneficiary.

Further, concerns exist around the timeliness of beneficiary attribution by health plans for ACOs/other providers in value-based arrangements. If an MA provider in a risk-sharing arrangement does not have its beneficiaries attributed or “credited” to the ACO/provider in a timely manner, it makes it more difficult to track and manage population health goals.

Conflict 2: Payment

Payment requirements (e.g., quality measure thresholds) lack alignment among Medicare plans – drawing additional provider resources to manage.

Once beneficiaries are enrolled, MA plans have an incentive to document and submit to the Centers for Medicare & Medicaid Services (CMS) as many diagnoses for risk adjustment payment as possible. MSSP ACOs, on the other hand, have their risk score growth capped at 3 percent.

Frequent delays and denials are harming provider cash flow and limiting investments in quality improvement. In the case of MSSP ACOs, this could impede their ability to carry out their statutory imperative for infrastructure investments and redesigned, high-quality care delivery processes. Even while MA plans gain the halo effect of ACOs on MA patients, current incentives lead some plans to drain resources from ACOs through unfavorable payment arrangements.

These impacts can be magnified in areas with existing provider financial distress, including rural providers and others that may be struggling to stay afloat and succeed in value-based care.

Conflict 3: Transparency

Providers currently struggle with asymmetrical data sharing with health plans – both patient data and provider performance data on quality and cost.

The Agency for Healthcare Research and Quality (AHRQ) found that that the principal challenges in obtaining race, ethnicity and language data for use in quality improvement assessments include a lack of standardization and understanding of why the data are being collected.

Large national payers continue to vertically integrate, creating or acquiring physician practices, home-based and virtual care services and other provider types. In order to leverage the efficiencies of vertical integration, plans are keeping patient care and associated data “in house” rather than prioritizing beneficiary access to the health plan’s highest-quality contracted providers. MSSP ACOs statutory imperative to be “accountable for a patient population and coordinate items and services under parts A and B” is lacking due to these care management carve-outs in MA plan contracts.

Additionally, coverage requirements lack transparency, and health plans frequently apply prior authorization to services for which there is a clear clinical pathway. In these instances, the potential care delays and administrative costs associated with prior authorization simply cannot be justified.

First, CMS must improve transparency by requiring health plans to make prior authorization requirements available to both providers and beneficiaries upfront. Second, CMS should leverage its demonstration authorities to require MA plans to utilize electronic prior authorization platforms to help reduce the inefficiencies and burdens that the highly manual and time-consuming prior authorization process places on patients and providers.

Transitioning to fully electronic prior authorization transactions would save the healthcare industry $437 million annually, and would reduce the time from providers’ submitting a request to receiving a health plan’s decision by 69 percent.

Leveraging Value-Based Care Models and Unleashing Data

Reducing disparities in care and achieving health equity across communities requires a holistic approach to care, shifting the incentives from sickness-based to wellness-based.

When providers are responsible for total cost of care and have flexibility through arrangements like capitation to address SDOH, providers can have greater control over managing patient care and targeting services – and be proactive in addressing inequity and disparities.

Shifting the payment system also creates opportunities to address a more comprehensive set of services that address SDOH, as providers are empowered to use the right resources for the right populations to improve outcomes. CMS can make meaningful progress towards advancing health equity in the MA program by incentivizing MA plans to partner with providers in value-based arrangements.

In these arrangements, however, data sharing remains a high-priority challenge for providers. Eighty percent of provider respondents to a recent Premier survey said they do not have access to timely, comprehensive patient data – even in risk-based arrangements where such data is critical to providing high-quality care. Specifically, providers note that the data they receive from plans often sees significant lag times and reflects only a portion of the care received by beneficiaries in the value-based arrangements.

Congress and CMS should adopt new policies and flexibilities that will help strengthen and increase participation in the MSSP and other value-based care programs. This includes:

  • Extend the Advanced Alternative Payment Model (APM) Incentive Payments and ensure incentives for APM adoption can be reasonably met. The Advanced APM Incentive Payments have been a critical tool for clinicians in offsetting costs associated with shifting to APM participation and have allowed APMs to offer expanded services to patients. It is essential that Congress consider multi-year solutions that would create predictability for providers participating in Advanced APMs.
  • Utilize MSSP as an innovation platform for testing new payment and care delivery flexibilities, such as primary care capitation or higher levels of risk. MSSP ACOs should not have to leave this permanent program to take on more advanced risk or to utilize new flexibilities or enhancements being tested under other models.
  • Eliminate the arbitrary high-low revenue distinction in MSSP. Eliminating this distinction will ensure that higher performers are encouraged to participate in the program regardless of provider type and will allow providers to more effectively collaborate in ways that best meet the needs of their populations.
  • Provide ACOs with the flexibilities and tools needed to better integrate specialists into total cost of care arrangements. CMS should explore providing ACOs with more tools (e.g., data) and flexibilities to better facilitate coordination of specialty care, such as through “shadow bundles.”
  • Establish sustainable benchmark methodologies. Currently, benchmarks are set partially based on an ACOs past performance – meaning that ACOs must continue to achieve savings year-over-year, which may be unsustainable for efficient ACOs. Modifying benchmarking methodologies to address this ratchetting effect will ensure the program remains a sustainable option for ACOs long term.
  • Incentivize participation of rural providers by addressing model design flaws that may discourage their inclusion. This includes adopting more sustainable financial methodologies, providing new opportunities for upfront funding and establishing a longer glide path to risk.

In following these approaches, CMS has a much greater likelihood of achieving its 2030 goal.

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