Tag Archives: programs

Federal Spending Increased Due to Medicare ACO’s

Once again, a topic previously discussed here has raised its head.

This time, it is the Medicare Shared Savings Program (MSSP), Medicare’s largest alternative payment model (APM).

Readers of this blog will recall previous posts about this topic. The first, from September 2015, Shared Savings ACO Program Reaps the Most for Primary-care Physicians reported that primary-care physicians were benefiting the most from the shared savings.

The next post, Challenges Remain in Physician Payment Reform, which followed on the heels of the first, discussed the challenges that remained in reforming physician payment, after then President Barack Obama (the good ole’ days) signed the Medicare Access and CHIP Reauthorization Act (MACRA) back in April.

MACRA repealed the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS), and had been blamed for causing instability and uncertainty among physicians for over a decade, and that led to 17 overrides of scheduled fee cuts, at a cost of over $ 150 billion.

In Models, Models, Have We Got Models!, I suggested, rather strongly that all these models were not living up to their promise and was only creating more complexity, confusion, and dysfunction in an already dysfunctional health care system.

A post from January 2017, Illogical!, reported on yet another asinine model introduction by CMS at the Health Care Payment Learning and Action Network (LAN) Fall Summit by Adminstrator Seema Verna.

So when I received an email today from Dr. Don McCanne, former president of the Physicians for a National Health Plan (PNHP) that mentioned a press release from Avalere Health indicating that Medicare ACO’s have increased federal spending despite projections that said they would produce net savings.

According to the press release, the Medicare Shared Savings Program (MSSP) has performed considerably below the financial estimates from the CBO that was made in 2010 when the MSSP was enacted as part of the ACA.

Avalere’s press release said that this has raised questions about the long-term success of Medicare’s largest alternative payment model (APM).

The MSSP has grown from 27 ACO’s in 2012 to 561 in 2016, and most of them continue to select the upside-only Track 1, the release continued, which does not require participants to repay CMS for spending above their target.

As seen in the figure below, Avalere’s research found that the actual ACO net savings have fallen short of initial CBO projectios by more than $2 billion.

However, in 2010, the CBO projected that the MSSP would produce $1.7 billion in net savings from 2013 to 2016. Yet, it actually increased federal spending by $384 million over that same period, a difference of more than $2 billion.

Josh Seidman, senior vice president at Avalere said, “The Medicare ACO program has not achieved the savings that CBO predicted because most ACO’s have chosen the bonus-only model.”

Avalere also found that while the MSSP was overall a net cost to VMS in 2016, there is evidence that individual ACO performance improves as they gain years of experience. Avalere found that MSSP ACO’s in their fourth year produce net savings to the federal budget totaling $152 million, as shown in the next figure.

Avalere’s analysis also showed that the downside-risk models in the MSSP experienced more positive financial results overall. This indicates that there is potential for greater savings over time to CMS as the number of downside-risk ACO’s increase.

The upside-only model increased federal spending by $444 million compared to the downside-risk ACO’s $60 million over 5 years.

“While data do suggest that more experienced ACO’s and those accepting two-sided risk may help the program to turn the corner in the future, the long-term sustainability of savings in the MSSP is unclear. ACO’s continue to be measured against their past performance, which makes it harder for successful ACO’s to continue to achieve savings over time,” said Avalere’s director, John Feore.

The weird part is that despite the MSSP increasing federal spending, ACO’s are still reducing spending compared to projected benchmarks.

If you are increasing spending, then how can you at the same time be reducing spending? Isn’t this a health care oxymoron?

Which brings me back to my previous posts. CMS is a clusterfudge of programs, models, rules, regulations, and schemes that have done nothing to improve the health care system in the US. In point of fact, it has only added to the confusion, complexity, dysfunction, and wastefulness of a system no other nation has.

When are we going to wake up from this nightmare and deep six the market-driven disaster that is the American health care system? There are saner alternatives, but we are so mentally ill and obsessed with profiting from people’s illnesses that nothing changes.

Einstein was right. The definition of crazy is doing the same thing over and over again and expecting different results. We are crazy to continue with this mess.

Regulation Strangulation

The American Hospital Association (AHA) released a report that stated that there is too much regulation that is impacting patient care.

The report, Regulatory Overload Assessing the Regulatory Burden on Health Systems, Hospitals, and Post-acute Care Providers, concludes with the following assessment:

Health systems, hospitals and PAC providers are besieged by federal regulatory requirements promulgated by CMS, OIG, OCR and ONC, many of which are duplicative and cumbersome and do not improve patient care. In addition to the regulatory burden put forth by those agencies, health systems, hospitals and PAC providers are subject to regulation by additional federal agencies, such as the Department of Labor, the Drug Enforcement Administration, the Food and Drug Administration and by state licensing and regulatory agencies. They also operate under stringent contract requirements imposed by payers, such as Medicare Advantage, Medicaid Managed Care plans and commercial payers, which also require reporting data in different ways through different systems. States and payers contribute to burden through, for example, documentation, quality reporting and billing procedures layered on top of the federal requirements.
Regulatory reform aimed at reducing administrative burden must not approach the regulatory environment in a vacuum — evaluating the impact of a single regulation or requirements of a single program — but instead must look at the larger picture of the regulatory framework and identify where requirements can be streamlined or eliminated to release resources to be allocated to patient care.
In a previous post, Models, Models, Have We Got Models!, I said that from the beginning of my foray into the health administration world, I noticed that there were too many models, programs, and schemes dedicated to lowering costs and improving quality of care, that only raised the cost of health care and did not improve quality of care.
This is what I said then about all the models, programs, and rules promulgated by CMS over decades that have not made things better:
The answer was simple. Too many models, programs, rules, and so on that only gum up the works and make real reform not only impossible, but even more remote a possibility as more of these inane models are added to what is already a broken system.
So it seems that I was right even then, and now the AHA has proved it so. Why not scrap these models, programs, and rules and institute real reform…Medicare for All and be done with it?

Models, Models, Have We Got Models!

FierceHealthcare.com today reported that CMS (those lovely folks with all them rules), launched three new policies Tuesday that continue the push toward value-based care, rewarding hospitals that work with physicians and other providers to avoid complications, prevent readmissions and speed recovery.

The newly finalized policies are meant to improve cardiac and orthopedic care, and also create an accountable care organization (ACO) track for small practices, according to the report.

There will be three new cardiac care payment models for hospitals and clinicians who treat patients  for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation following a heart attack or heart surgery.

Federal officials said that the cost of their care…varied by 50% across hospitals and the share of patients readmitted to the hospital within 30 days also varied by 50%. Medicare, the article points out, spent more than $6 billion in 2014 for care provided to 200,000 Medicare patients who were hospitalized for heart attack treatment or underwent bypass surgery.

As for orthopedic care, the new payment model is for physicians and hospitals that provide care to patients who receive surgery after a hip fracture, other than hip replacement.

They also finalized updates to the Comprehensive Care for Joint Replacement Model, which began earlier this year.

So far, that’s three models. But wait, there are more where those came from.

There’s the new Medicare ACO Track 1+ Model, that has a more limited downside risk than other tracks in the Medicare Shared Savings Program (another model I discussed a while back in the post, “Shared Savings ACO Program reaps the most for Primary-care Physicians“).

These new five-year models provide clinicians with other ways to qualify for a 5% incentive payment through the Advanced Alternative Payment Model (APM) path under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the Quality Payment Program. (three more models — so many, in fact, I am losing count)

Why am I pointing out the problem with the release of new payment models?

I’ll tell you why. When I began my MHA (Masters in Health Administration) degree program, I took an online elective on Healthcare Quality. The textbook we read discussed how CMS over a period of several decades, created and instituted so many models and programs, that it made me wonder why our health care system was so complex, expensive and so out of whack compared to health care systems of other industrialized countries.

The answer was simple. Too many models, programs, rules, and so on that only gum up the works and make real reform not only impossible, but even more remote a possibility as more of these inane models are added to what is already a broken system.

Winston Churchill said that you can always count on Americans to do the right thing, after all the other things were tried. We are still on the trying part, and I am afraid we will never get to where Sir Winston said we would.