January 19, 2017

Alternative payment model participation soars. Here's how to think about it.

Daily Briefing

    Read Advisory Board's take on this story.

    Nearly 360,000 clinicians will participate in four of CMS' Alternative Payment Models (APMs) this year, the agency announced Wednesday.

    The announcement detailed participation in the Comprehensive Primary Care Plus (CPC+) Model as well as three ACO models: the Medicare Shared Savings Program (MSSP), the Next Generation ACO Model, and the Comprehensive End-Stage Renal Disease Care (CEC) Model.

    According to CMS, the participating clinicians in 2017 will serve more than 12.3 million Medicaid and/or Medicaid beneficiaries across all 50 states, Washington, D.C., and Puerto Rico. 

    Specifically, the agency announced that:

    • Round 1 of CPC+, a new value-based primary care model, will include 54 payers in 14 regions with 2,893 primary care practices, which include over 13,000 clinicians;
    • 480 organizations will participate in MSSP, including 99 new participants and 79 renewing participants;
    • 47 organizations will participate in CEC, including 24 new participants; and
    • 45 organization will participate in the Next Generation ACO Model, including 28 new participants.

    Of the 572 ACOs that will participate in 2017 in MSSP, Next Generation, or CEC, CMS said that 131 will be in risk-bearing tracks (Whitman, Modern Healthcare, 1/18; Leventhal, Healthcare Informatics, 1/18l; CMS release, 1/18).

    Advisory Board's take

    The Daily Briefing's Josh Zeitlin spoke with Eric Cragun, who leads the firm’s Health Policy team, on his biggest takeaways from the CMS announcements.

    Question: What do you take from the large increase in participation in these alternative payment models?

    Eric Cragun: I see it as an indication that more and more organizations are becoming comfortable with payment reform. We're a number of years into this now, and more organizations have gained experience and have put the right investments in place to move forward on payment reform.

    Certainly this year, one of the big differences and one of the big accelerants is the beginning of the Quality Payment Program (QPP) established by MACRA. Many organizations have been considering or reconsidering participation in alternative payment models in light of the QPP requirements. So it's not surprising to us that we see a big jump in the number of organizations participating in the Medicare Shared Savings Program (MSSP) and Next Gen ACO programs and a lot of interest in CPC+.

    In particular, the CMS announcement shows a significant increase in the number of organizations participating in two-sided risk ACO models. Some of that goes back to organizations' comfort with MSSP and the changes they've made to their care delivery processes and investments in care management capabilities that better position them to take on downside risk.

    In addition, organizations participating in a model with downside risk can potentially qualify for the Advanced APM track of QPP, which offers a 5 percent bonus on Medicare physician fee schedule billings. In light of MACRA, many organizations are reevaluating their strategy with regard to risk-based payments in Medicare. In fact, it's a central theme we're discussing right now at our Health Care Advisory Board National Meeting series.

    Learn more about the Health Care Advisory Board National Meeting

    Q: Are there any takeaways you have from which particular models providers are choosing to participate in?

    Cragun: Interestingly, Track 3 of MSSP is clearly more popular than Track 2, which may speak to the particular advantages available to organizations under Track 3. It's also worth noting that the Next Gen ACO program is attracting interest from some of the sophisticated population health managers—including Sharp HealthCare and Dartmouth-Hitchcock—who got into the Pioneer program early on but then withdrew later. I think this is an indication that CMS has evolved the ACO programs in response to providers’ early experiences and feedback.

    Q: You mention the significant amount of interest in CPC+—what are the key takeaways from the announcement on participation in this new program?

    Cragun: One, CPC+ offers some great financial incentives for practices to participate in the program, so it's not surprising to us that so many—nearly 2,900 practices—joined the program. The additional funding practices receive in the program offers a unique opportunity to invest in new resources and staff.

    It's interesting to see the number of small practices that were selected for CPC+, particularly in light of QPP, which allows small independent practices to quality for the Advanced APM track through participation in CPC+. More than a third of participating practices have 3 or fewer clinicians.

    It's also noteworthy that a large number of practices have chosen to participate in Track 2 of CPC+,

    which involves a greater level of risk and provides more payment upfront even before services are provided. Part of that interest probably stems from the extra funding that comes with Track 2. It's also indicative of some practices' interest in moving more toward capitated-like payments. You see that trend with the spike in participants for the Next Gen ACO program as well.

    We also know from the CMS announcement that there are about 2,600 practice slots available for the next round of CPC+, which will involve different regions. That round will kick off in 2018, but CMS said it will start accepting applications from payers in mid-February 2017. So interested practices outside the current 14 CPC+ regions should begin working with their payers quickly to encourage them to apply.

    Get our resources on understanding CPC+ and how to thrive under the model

    Q: This announcement is one of the last that will come from CMS under the Obama administration. How should providers think about it given that Donald Trump will be sworn in on Friday?

    Cragun: Under the Trump administration, we still expect payment reform efforts to continue moving forward. On Wednesday, Tom Price in his confirmation hearing expressed support in general for payment reform and the concept of the CMS Innovation Center, and there's broad bipartisan support for MACRA and payment reform, along with great interest from providers in these new models.

    While we anticipate that the new administration will continue to operate alternative payment models, we do have some questions as to whether some timelines might change, such as for the next round of CPC+ or Next Gen, and whether specifics of these programs might change. We look forward to additional guidance on these models from the new administration in the coming weeks and months. And we'll be sure to keep our members posted as developments unfold.

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