Can you believe it’s already November? Seems like only a few months ago we were discussing the SGR repeal. Now the leaves have fallen, college football is in full swing, and as I type, the World Series is pretty much in the history books. Much has happened during the past few weeks. For example, with the recent release of the meaningful use final rule, we find ourselves invited to respond to a CMS request for information related to the new MIPS program and to Alternative Payment Models.
In the presence of so much uncertainty, today I thought I would share my perspective on the migration from volume to value. I have had the opportunity to speak about this in a number of venues over the past few months and during my travels I have encountered differing opinions and points of view. On occasion I have bumped into a bit of skepticism from folks who do not believe this is happening. Frequently citing the failed HMO experience of the 1980s, some believe this latest attempt to modify the method by which health care is paid for is doomed to failure. Let me go on the record as saying I believe it’s different this time.
A line in the sand
The proverbial shot across the bow came in the form of a blog post this January by Sylvia Burwell, the Secretary of HHS. In that post, which later made its way into the NEJM, the Secretary laid out the following important goals:
“Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018.
Perhaps even more importantly, our target is to have 30% of Medicare payment tied to quality or value through alternative payment models by the end of 2016 and 50% of payments by the end of 2018.”
Think about this for a moment. Last year Medicare spent roughly $600 Billion—that’s billion with a capital B! Recognizing this figure will climb between now and 2018, CMS expects over $300 billion dollars to move through an “alternative payment model” or APM in just a few years.
What’s an APM?
Here’s the short answer. An APM is effectively a payment model that requires at least two things:
- Two-sided risk (that is to say, both upside and downside financial risk) and
- Quality measurement
The APMs known like household names in the nephrology community include ESCOs and ACOs (as long as the ACO involves downside risk). Less well known is the Bundled Payments for Care Improvement initiative, thankfully shortened to BPCI. BPCI is an important animal for us to understand. Unlike ACOs and ESCOs, in which the entity is managing a population of patients, BPCI is all about managing an episode of care. BPCI is based on specific DRGs and the entity at risk is managing the financial risk (Part A and B) for episodes of care initiated by a specific hospitalization. Those episodes can extend up to 90 days post discharge. Speaking of 90 days post discharge…
Comprehensive Care for Joint Replacement CCJR
I know what you’re thinking, Ketchersid has finally lost it. He’s talking about orthopedics in a nephrology blog. What could the two possibly have in common? On the surface, very little, but the signal here is worth noting. All of the APMs to date have originated within the innovation center at CMS (CMMI), and all of the entities that wished to participate in one of these “experiments” had to apply and be vetted by CMMI. I say “to date” because the CCJR is in proposed rule format. The signal is this, CCJR as written is not optional. If you are among the roughly 750 hospitals that sit in one of the lucky 75 metropolitan statistical areas chosen by CMMI, beginning in 2016, elective hips and knees performed in your hospital will be paid for under a forced APM known as the Comprehensive Care and Joint Replacement program. A blog post is no place for this nephrologist to go into the details (assuming I understood them), but suffice it to say this looks just like the 90-day BPCI for elective hips and knees. The difference? It’s not optional. If the CCJR APM moves forward, this is how the procedures will be paid in the years ahead for these hospitals. Writing in the NEJM recently, Robert Mechanic filled in a few details about the program. The title alone, “Mandatory Medicare Bundled Payment—Is it Ready for Prime Time?” should be enough to draw your attention.
In addition to what I laid out above, consider the fact that MIPS is a less desirable alternative to APMs. Also, let’s not forget the addition this year of the chronic care management codes. For the first time in history, CMS is paying providers for a service that does not require a face-to-face encounter. Taken together, it is clear to me that this time is indeed different. There are a multitude of signals that point to real change underway. Thankfully the timeframe outlined provides us with a period to become acquainted with the new world, but that window is relatively narrow. Like the ESCOs, there will be important opportunities ahead for nephrologists. Pay close attention to the rules of engagement and choose your partners well. The transition to value is underway, and as a nephrologist, I’d prefer a seat at the table instead of becoming part of the meal. Have you had experience with an APM? Drop us a note and join the conversation.
Terry Ketchersid, MD, MBA, practiced nephrology for 15 years before spending the past seven years at Acumen focused on the Health IT needs of nephrologists. He currently holds the position of Chief Medical Officer for the Integrated Care Group at Fresenius Medical Care North America where he leverages his passion for Health IT to problem solve the coordination of care for the complex patient population served by the enterprise.