Featured Health Business Daily Story, Dec. 7, 2017

Payers Continue With VBC as CMS Scales Back Programs

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry. Subscribe today!

By Jane Anderson
November 13, 2017Volume 27Issue 40

CMS’s decision to cancel two planned mandatory value-based programs and to scale back a third is unlikely to have significant ripple effects on commercial insurers’ value-based contracting (VBC) arrangements. Insurers say they’re moving ahead as quickly as possible to shift providers into accountable care organizations and bundled payment arrangements.

However, the move by CMS does come amid a slowdown in the move to VBC, some stakeholders say. Some providers are more interested in studying what they’ve learned and making sure they understand how best to manage patients under these arrangements than they are in inking new contracts.

“We’re full steam ahead on all fronts,” says Lynn Garbee, senior director, reimbursement and collaborative care at Cigna Corp. “We have value-based arrangements in 34 states. We are building it despite CMS.”

The CMS pullback could mean specialist medical groups will be more interested in contracting with commercial insurers, not less, Garbee tells AIS Health. “This gives providers more mind space and bandwidth to work with us, as opposed to having mind space wrapped up in mandatory [CMS] programs.”

She adds: “I don’t see the CMS slowdown as negative — the market’s going there [to value-based care] anyway. We’re only getting started.”

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“As value-based care goes, 2017 is kind of a lost year, at least on the payment side,” David Muhlestein, chief research officer at Leavitt Partners, tells AIS Health. “On the delivery side, there is a lot of activity and learning going on. But on the payment side, there’s not a lot of activity [for providers and payers] to jump into things.”

“It wasn’t that no action happened, but it was less than we had seen in previous years and less than we probably would have seen in a Clinton administration,” he adds, even though “on the commercial side, there’s still a lot of activity — they view it as an opportunity to improve health care, and they’re going to continue to push it.”

CMS Administrator Seema Verma on Oct. 30 introduced a “Meaningful Measures” initiative intended “to focus on outcome-based measures going forward, as opposed to trying to micromanage processes.” The agency in September issued a request for information aimed at rebooting the Innovation Center, which oversees CMS’s bundled payment models. And in August it canceled the Episode Payment Model (which covered three cardiac episodes plus non-replacement hip surgery following a hip fracture) and the Cardiac Rehabilitation Incentive Model. At the same time, CMS scaled back the mandatory Comprehensive Care for Joint Replacement model, cutting the number of markets from 67 to 34.

The moves signal a new direction that was expected following the change in administration. They also coincide with — and potentially will contribute to — a pause point for VBC, both in commercial and Medicare markets, as providers and insurers digest the changes of the past few years.

“There’s certainly still a lot of interest there [among providers], and there is still interest from a CMS perspective, but it’s a slowdown,” Muhlestein says. “This is a new administration, and they need to reconfigure. Looking into 2018, we expect the new administration to do more.”

On the commercial side, contracting activity has slowed this year, Muhlestein says, partly due to federal lawmakers’ repeated attempts to repeal and replace the Affordable Care Act and uncertainty surrounding the new payment system created by the Medicare Access and CHIP Reauthorization Act (MACRA) (see story, p. 1). “There’s only so much attention they [providers] can give” to new initiatives.

More than 100 commercial insurers have primary care ACO contracts, he says, while fewer than a dozen have episode-based contracts with specialists, so there’s plenty of room for growth, especially on the specialist side.

Garbee says Cigna started its push into value-based care in 2008 with accountable care organizations (ACOs) but more recently has been expanding to value-based reimbursement arrangements with specialists and hospitals. She says Cigna is “still actively recruiting ACOs” — the insurer has 192 ACOs under contract and another 25 currently in negotiations. “We still see lots of room there,” she says. Cigna and Dallas-based Baylor Scott & White just announced a new ACO agreement (HPW 9/18/17, p. 4).

Cigna Focuses on Specialty Care

However, specialty care is where Cigna currently sees the most rapidly expanding opportunity, Garbee says. Currently, the insurer has 72 retrospective bundle arrangements with specialists, with “many, many in negotiation,” she says.

Providers — both specialists and primary care — who have experience in CMS value-based programs almost certainly will find that experience useful as a foundation for working with Cigna’s value-based team, Garbee says. However, CMS experience hasn’t been a necessary ingredient for success with Cigna’s program, she says.

“The specialist provider community is a couple of years behind where the primary care community is,” Garbee says, but specialists are starting to see the need to obtain value-based reimbursement experience and build the necessary infrastructure.

Still, “it’s not a global thing” — instead, there are forward-thinking specialist groups scattered throughout the country that have been interested in these arrangements, she says.

“There are lots of specialists who get this — they understand that the world is moving to fee-for-value,” Garbee says. “They’re even approaching us on doing prospective episodes” of care, which is much more difficult than the more typical retrospective episodes that encompass the vast majority of episode-based contracts, she says. Cigna is considering those on a very limited, pilot basis, but most of its specialist contracts involve retrospective episodes, she says. “We’re being very deliberate about where we’re going.”

ACOs Aren’t Looking to Expand Contracts

Even many primary care provider groups may have reached a point where they need to make sure they’re doing their best for the contracts they have, rather than expanding their value-based reimbursement base.

In a survey from Leavitt Partners and the National Association of ACOs released Oct. 4, the ACOs surveyed said reducing costs was their top priority for 2017, with engaging physicians and improving data analytics/reporting in second and third place. “Expand number of contracts” was in ninth place, behind improving chronic condition management, quality and coordination with post-acute care providers; engaging patients; and reducing practice variation, the survey found.

View the CMS Innovation Center RFI at http://bit.ly/2hOOYfY and the Leavitt Partners-NAACOS survey results at http://bit.ly/2xWKdIR.


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