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VA Geriatric Scholars Program’s Impact on Prescribing Potentially Inappropriate Medications
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Physician-Initiated Payment Reform: A New Path Toward Value
Suhas Gondi, BA; Timothy G. Ferris, MD, MPH; Kavita K. Patel, MD, MSHS; and Zirui Song, MD, PhD
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Evelyn T. Chang, MD, MSHS; Rebecca Piegari, MS; Edwin S. Wong, PhD; Ann-Marie Rosland, MD, MS; Stephan D. Fihn, MD, MPH; Sandeep Vijan, MD; and Jean Yoon, PhD, MHS
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Physician-Initiated Payment Reform: A New Path Toward Value

Suhas Gondi, BA; Timothy G. Ferris, MD, MPH; Kavita K. Patel, MD, MSHS; and Zirui Song, MD, PhD
Physician groups have begun designing alternative payment models for their own specialties, proposing that CMS include financial risk, funding for new technologies, and legal waivers.
ABSTRACT

Objectives: In the move toward value-based payment, new payment models have largely been designed by payers and focused on the role of primary care providers. We examine a new phase of payment reform wherein providers, mostly specialists, are designing alternative payment models (APMs) for their own practices through a task force, called the Physician-Focused Payment Model Technical Advisory Committee, created by the Medicare Access and CHIP Reauthorization Act of 2015. Although it is a potentially notable shift in payment reform, little is known about the content of these proposals to date.

Study Design: Qualitative systematic review of physician-focused payment model proposals submitted to CMS.

Methods: We analyzed the first wave of new payment models proposed. For each of the 24 proposals submitted by physicians and physician groups, we assessed the models on their 10 key dimensions and evaluated underlying themes across all or many of the models to gain insights into what providers are looking for in APMs within the constraints of the rules established by the HHS secretary.

Results: Key features of the models and our analysis include bearing financial risk, a reliance on case management, embrace of new technologies, and consideration of legal barriers.

Conclusions: We discuss how specialists may help lead in the evolving payment landscape and recommend how these models might be improved. Payers and policy makers could benefit from our findings, which reflect how providers view financial risk in APMs and provide guidance on the types of payment reforms that they may embrace in the journey toward value.

Am J Manag Care. 2019;25(9):431-437
Takeaway Points
  • In proposals of new payment models to the Physician-Focused Payment Model Technical Advisory Committee, specialists and other providers have indicated that they would be amenable to assuming financial risk.
  • Collectively, the payment models that the providers have designed suggest that many providers see investment in new technologies and increased time spent on case management as strategies to succeed in a value-based framework.
  • Policy makers should critically consider which proposals may slow healthcare spending and should consider how antikickback provisions might hinder the formation of value-based arrangements, as well as how the newly proposed payment models might interact with existing alternative payment models.
Historically, policy efforts to slow healthcare spending centered on changing the way providers are paid—especially those imposed by payers—have not always been met with enthusiasm by the provider community. Medicare’s mandatory episode-based payment models for cardiac and orthopedic care, for example, met substantial resistance from providers and were ultimately scaled back.1 Physician groups, including the American Medical Association (AMA), have in turn called for voluntary, physician-led payment innovations as an alternative to top-down payment reform. CMS, in a “New Directions” vision statement for its Center for Medicare and Medicaid Innovation, also highlighted voluntary payment models—including for specialty physicians—as a new focus.2

To date, little is known about the appetite of physicians, particularly specialists, to design their own payment models aimed at achieving higher quality at lower cost. Payment innovations by public and private payers have largely focused on the role of primary care physicians and the quality of primary care decisions or outcomes. Specialists thus far have had fewer opportunities to design or implement alternative payment models (APMs) directly pertaining to their scope of practice.3
In this paper, we examine the first broad, large-scale effort by providers to design new payment models for their own specialties. We evaluated the payment models submitted to the Physician-Focused Payment Model Technical Advisory Committee (PTAC)—a task force created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The PTAC reviews payment models submitted by providers and submits recommendations to the secretary of HHS, who may reject, revise, or implement each proposal. The recommendations are structured around 10 PTAC criteria (Table 14).5

First Wave of New Payment Models

As of November 2018, physicians and provider groups submitted 24 of 25 total PTAC proposals,4 which vary in scope, clinical focus, and economic dimensions. These proposals reflect how providers wish to be paid in a manner that generally departs from pure fee-for-service (FFS). Collectively, the submitters are composed of 6 professional societies, 13 provider groups, a state government agency, 2 academic medical centers, a nonprofit association, and an individual physician. In most of these proposals, specialists came forward with new reimbursement models involving financial risk for core services provided by their specialties, which is a stark contrast from the largely primary care–based APMs thus far. Although CMS has not yet launched demonstrations for PTAC proposals, this novel trend and the requests of enterprising providers and their organizations offer insights into possible future directions of payment reform and the challenges that such models may face.

We conducted a systematic review of the 24 physician-focused payment model proposals along 10 dimensions: patient population, population size, physician specialty, specialty size, services covered, payment type, duration of payment coverage, upside financial incentives, downside risk, and technological innovations in care delivery. These were selected to provide a combination of both broad and specialty-specific insights into the types of payment models that physicians are seeking. In addition to proposing novel APMs, the proposals also include requests to change the Medicare fee schedule, along with minor technical changes to payment rules. We excluded 1 proposal submitted by a non–healthcare provider.

Of the 24 proposals, 19 focused on new payment models for specific specialties, including surgery, gastroenterology, pulmonology, nephrology, neurology, oncology, urology, palliative care, interventional cardiology, and emergency medicine. Several key attributes of the proposals are depicted in the Figure.4,6 A detailed table describing the 24 proposals across all 10 dimensions is included in the eAppendix (available at ajmc.com). Although the proposals differed in the patients, providers, and clinical scenarios that they concerned, we observed important common features across the models.

Financial Risk

Given the HHS secretary’s criteria to improve value, most of the proposals chose to demonstrate greater value through an arrangement that required the provider to accept some financial risk for costs of care of their patients. The ways that the proposals structured that risk provide insight into the terms that were considered acceptable. In 21 of 24 proposals, provider entities asked for a shared savings and shared losses (ie, “2-sided”) payment model wherein physicians are rewarded if spending is below a prospective risk-adjusted payment benchmark and penalized if spending exceeds the benchmark. In addition, providers asked for payment adjustments, including varying degrees of bonuses, based on performance on quality measures. The 21 proposals generally capped financial gains and losses with stop-gain and stop-loss limits that varied from 4% to 20% and were frequently about 8% and 9%.


 
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