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Implications of Medicare’s Value-Based Payment Initiative for Specialty Health Systems

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Despite the current uncertainty about the direction of health care reform in the United States, the Centers for Medicare and Medicaid Services (CMS) appears poised to transition from standard fee-for-service reimbursement to value-based payments in the coming years. These new models, which were codified in the Medicare Access and CHIP [Children’s Health Insurance Program] Reauthorization Act of 2015,1 will increasingly hold provider groups accountable for the quality and efficiency of care delivery. With strong bipartisan support, these incentives should cause provider organizations to shift their focus from volume to value.

Recently, we sat down to consider approaches to Medicare’s value-based payment initiative at our health system, a moderate-sized tertiary/quaternary care academic teaching facility. Under the program, which goes into effect this year, our health system may opt to participate in an advanced risk-bearing alternative payment model—such as a “next generation” accountable care organization2—or alternatively, will be subject to the merit-based incentive payment system,3 which adjusts payments based on performance on several domains, including the quality and efficiency of care delivery.

As our leadership team discussed the possibilities, we realized that value-based payments—both alternative payment models and the merit-based incentive payment system—represent a particular challenge for specialty-care-focused health systems like ours. Unlike community health systems that serve patients longitudinally, we frequently manage patients for discrete and time-limited periods. While we readily accept responsibility for the care of such patients during these discrete periods, our role in the general care of these patients has historically been less clear.4 Yet, performance on the CMS value-based payment programs depends largely on the quality of this general longitudinal care, which frequently is provided beyond our walls. Moreover, even alternative payment models designed for specialty providers—such as the comprehensive end-stage renal disease care program and the oncology care model5—apply to only a small number of specialties, and thus, participation in these programs would not be a viable strategy for our multispecialty health system.

While our institution has long debated the scope of our responsibilities for patients referred to us for specialized care, Medicare’s value-based payment program has pushed these issues to the forefront, triggering us to re-examine our approach to services such as preventive care, coordination and communication with external clinicians, the management of complications arising after patients have been repatriated to community providers, and preprocedural optimization.

Our discussions have been heated. In one camp are those who argue that we must be careful to avoid “scope creep,” maintaining our focus on the specialty services we are uniquely able to provide. Additionally, because health information exchange infrastructure has been slow to develop in our community, information flow with external providers is fragmented. As a result, activities, such as determining whether a patient is up-to-date on preventive services, often require herculean efforts, and attempts to provide these services may result in duplication. Broad acceptance of responsibility for general longitudinal care might also blur the traditional lines of responsibility between primary care clinicians and specialists, leading to confusion for providers and patients alike (“if everyone is responsible, no one is responsible”). Moreover, community primary care clinicians may offer general services more effectively, efficiently, and conveniently than specialty providers.

In the other camp are those who believe we should use the payment changes as an opportunity to more actively engage in the broader health care needs of our patients. Even if it isn’t feasible to ensure completion of every preventive measure, perhaps we should address high value opportunities, such as vaccinations, optimization of chronic conditions prior to surgery, and postdischarge care coordination. Likewise, perhaps our generalist clinicians should assume a greater role in “quarterbacking” the care of specialty patients while they are cared for in our system. Such efforts might improve outcomes and even prove cost-effective.

For now, our health system has come to a consensus on overarching principles. We believe our role is to offer comprehensive services—surgical, medical, and behavioral—for the sickest and most challenging patients, including those requiring transplants, specialized procedures, and advanced technologies. Although the precise boundaries of our responsibilities remain blurred, we believe that patient preference should play an important role in setting these boundaries. Some patients may prefer to receive services such as preoperative optimization, postprocedural care, or even deficient preventive care within our system. Others might prefer to receive only highly specialized services from us, deferring other care to their regular providers. Geography and financial considerations will likely influence these decisions, particularly because managed care organizations often authorize only limited services outside of their network.

We also believe that certain policy reforms might ensure that value-based payment strategies are fair and meaningful for specialty-focused health systems like ours in the years ahead.

First, we believe that CMS should make it easier for groups to report on quality measures of broad importance to specialists. Under the merit-based incentive payment system model, health systems may choose the quality measures they report. Currently, CMS provides a list of 53 measures that can be submitted through electronic health records systems, yet the vast majority of these measures—such as cancer screening rates, maternal depression screening, and childhood vaccination—apply primarily to primary care clinicians.6 However, a handful of the measures—such as tobacco screening and cessation, documentation of active medications, and “closing the referral loop” with specialists—are broadly relevant to specialists. We hope CMS will increase options for submitting specialist-relevant measures like these through electronic health records.

Second, we hope that CMS will promote standardized, user-friendly tools enabling the collection and submission of specialty care outcomes, such as changes in quality of life and functional status. Collecting these outcomes is vital, not just for quality monitoring, but also for improvement and research. Although CMS allows submission of specialty-specific measures such as these through certified registries, developing these registries is burdensome for multi-specialty health systems, which would need to implement distinct systems for each specialty. The promotion of easy-to-use, standardized tools by CMS could greatly facilitate the collection of such data.

Third, we hope that more advanced, risk-bearing alternative payment models relevant for specialists will be approved in the coming years. Such models would enable systems like ours to accept greater responsibility for complex populations during discrete episodes of care. Specifically, we believe that bundled payment programs should continue to be expanded, both for procedural and nonprocedural specialties.7

Finally, the progression of value-based reimbursement underscores the importance of effective electronic health information exchange. As systems like ours seek to manage specialty patients more comprehensively, it is increasingly important to access prior records, laboratory data, and medication lists. Progress in this area will require substantial support from regional health information exchanges, but will also mandate investment in information technology and the development of new workflows within health systems.

With some modest tweaks, we are optimistic that CMS’s value-based payment initiative can improve care along the primary/specialty care continuum. Indeed, such a comprehensive approach is at the heart of improving value across the health system.

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-Michael Hochman, MD, MPH, Jehni Robinson, MD, Kiran Dhanireddy, MD

This article originally appeared in the February 2018 issue of The American Journal of Medicine.

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