The Future of Value-Based Care Relies Upon Providers: Taking the Reins on Alternative Payment Models

Neal Shore MD, FACS
Chuck Saunders MD

2017 was a pivotal year for the growth of value-based care. For many practices, this meant completing their first performance year as part of the Merit-Based Incentive Payment System (MIPS). A much smaller percentage of practices was able to participate in approved advanced Alternative Payment Models (APMs).

While practices await feedback on their 2017 performance, early lessons have already become evident. Clearly, as practices are assigned greater responsibility and accountability for patient populations, it becomes increasingly important that they effectively navigate the reimbursement models upon which their financial viability depends.

Where should provider practices start? The MIPS model may not be a long-term answer. MedPAC has recently clearly articulated their disfavor with MIPS and desire to replace it. In contrast, advanced APMs provide a much more fertile ground for providers to work collectively. They can contribute their unique clinical expertise to define opportunities to improve quality and cost, focused on areas that have potentially greater beneficial impact on patient care and practice pathways. The Center for Medicare and Medicaid Innovation (CMMI) recently acknowledged as much by unveiling the Bundled Payments for Care Improvements (BPCI) effort that measures performance and sets payment against four broadly defined models of care.

Per CMS, APMs in general refer to payment approaches that provide financial incentives for high-quality, cost-efficient care around a specific clinical condition, care episode, or population. Advanced APMs promise higher earnings – a 5% incentive payment – when practices also assume risk for their patient’s outcomes and have defined patient care quality metrics, not to mention the ability to opt out of MIPS.

The primary challenge with advanced APMs is that there are simply only a handful approved and thus access for US health care is severely limited. In 2017, there were just seven advanced APMs, including ones for cardiology, oncology and joint replacement. While the announcement of BPCI was encouraging, certain specialties have little or no opportunity to participate with an approved APM. Consider the specialty of urology. Fewer than one percent of urologists have been able to participate in an advanced APM. The other 99% of US urologists have had no option other than to participate within the MIPS metrics.

Fortunately, urologists have been proactive. In 2016, leaders of some of the nation’s largest and pre-eminent urology practices came together in alignment with the Large Urology Group Practice Association (LUGPA), with the mission of defining, assembling and establishing urology-specific APMs. LUGPA, in turn, built a collaborative health care value-based APM in order to involve the broadest participation of US urologists, inclusive of other urology medical societies, patient advocacy groups, as well as industry partners. Integra Connect, a provider of value-based care technologies and services, was a natural partner based on its expertise in specialty APMs, as well as its provision of tools enabling urologists to manage cost and quality in support of optimal performance.  Myriad Genetics brought its leadership in genomic assay development.

Following intensive analysis, it was decided to focus its efforts on patients newly diagnosed with localized prostate cancer. Providers face a critical decision point with such patients: whether to pursue “active surveillance” or “active treatment” for their care. Those receiving active treatment undergo interventions such as radiation therapy or prostatectomy, while active surveillance entails intensive testing and monitoring unless the disease worsens. What were the criteria behind this choice of an advanced APM?

  • Focus on a high-impact area for practices. In 2015, an estimated 79,000 Medicare fee-for-service beneficiaries were newly diagnosed with prostate cancer; 79 percent of these cases were localized to the prostate. Therefore, an advanced APM focused on this area is meaningful both in terms of patient volume and practice revenue.
  • Align with clinical science and data. Organizations from the National Institutes of Health to the American Society of Clinical Oncology have recommended active surveillance for appropriate patients, finding that it produces equivalent long-term clinical outcomes. Surveillance also minimizes the side effects that can occur with active interventions.
  • Hold the potential for significant cost savings. Active surveillance, when medically appropriate, can reduce expenditures for patients by about $20,000 per episode of care in a Medicare population and would result in even greater savings in commercially insured populations. LUGPA and its partners calculate that the full potential of their advanced APM is to reduce expenditures by over $254 million annually, a 14.4% decrease in the total cost of care for eligible patients.
  • Adopt a payment approach that tackles barriers to adoption. In formulating an advanced APM to advance active surveillance, LUGPA identified the key barriers to adoption and knew that its financial model needed to address them directly. This meant enabling practices to make the upfront and ongoing investments to support patients more holistically, from new staff and skillsets in areas such as care navigation and patient counseling to improved analytics capabilities for better monitoring. This resulted in an approach that emulated the Oncology Care Model, consisting of a monthly fee per qualified patient to support practice transformation, along with an opportunity to share in the savings of total cost of care.

During this APM development, LUGPA and its partners engaged critical stakeholders including CMMI for feedback. This engagement reinforced the approach being taken and resulted in the subsequent submission of the first urology-specific proposed advanced APM to the U.S. Department of Health and Human Services in July of 2017. The proposal is now moving its way through a governmental review process. It is here that, frankly, groups and specialties pursuing the creation of an advanced APM must be alert to feedback and political dynamics. In these early days of value-based care, the path toward success is not entirely clear. By adhering to the best-practice criteria outlined above, a successful APM proposal can also generate commercial payer interest that may evolve along a clearer process and timeline.

Charles Saunders, M.D., Chief Executive Officer, Integra Connect

Neal D. Shore, MD, FACS, President, Large Urology Group Practice Association (LUGPA).  


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10 replies »

  1. Excellent article on alternate payment models to advance value based care. AS you suggested risk and gains both have to be shared. There has to be equal incentives in both directions for the system to work. If the initial ones do well we could see a lot more adoption.

  2. Very well-written. Chronic Care Management software can more effectively manage Medicare reimbursements. The solution will help physicians to have an increased revenue and at the same time provide quality care for their patients and see better patient outcomes. The HIPAA compliant solution will help with better care coordination, good patient care, share care plans and check the patient history. To know more please check

  3. The HHS TPAC committee, created via the MACRA law to solicit, consider and put forth new A-APMs, had at last count about 30 letters of intent for new models. It and HHS need to accelerate this process, as much as federal government can these days. There’s good Congressional support for the A-APMs as well. And there’s a lot of docs on the PTAC, by design. Several specialists appeared before Energy & Commerce last fall saying same on PTAC. More here https://www.wellcentive.com/blog/congress-supporting-value-based-care/

  4. Alternate payment models need to look at all providers and all costs, not just docs. Docs take about 20% of the health care dollar (but we do control lots of other costs). We need to look at alternate payment models for pharma, administration, nurse labor, tech labor, durable medical equipment, supplies, capital, depreciation, et al. The least we should do with pharma and supplies is to exert monopsonic purchasing (The government gave up on that when the PPACA was passed, however. Too political.) But it needs revisiting.

    If we are all going to end up as docs running little de facto insurance companies we need to be informed of this in medical school and we need suitable course work in management and actuarial calculations. Also, we need to control the front end and to be able to charge patients or government or businesses what we need in premiums. In other words, we cannot be only the subdivision of a health insurance firm that takes downside risks. We need to run the whole firm.

    If you are asked to be an input factor of an insurance firm and every supplier to the firm charged what he needed except you, who is given remuneration based upon your savings from last year, you would smell some mischief in the air and you probably would decline the offer if it were put that bluntly.

    • I think the evidence is showing that “value based care” is not the panacea it was supposed to be to control costs. Nevertheless, we continue to push it as though it were. Dr. Palmer makes a very valid point. Even if we use less resources as physicians, but the costs of those resources continues to rise (as it is doing) what kind of progress are we really making?

      • The whole point of “value based care” is to pay doctors less and to pay pharma, suppliers, administrators, etc. more.

      • Right. All players need to make overhead. When overhead is threatened, either costs rise or use is amplified OR the whole thing disappears. Indeed, much is based on the illusion of progress. Someone will need to explain what exactly progess is when it comes to medical care. Is it the triple aim? Hope not. Costs are rising, our population is sicker and more dependent on the care system than ever, and the patient experience sucks. Progress? The only progress that is occurring is that more GDP is being sucked into one of the most unstoppable growth machines ever developed.

    • First, I have a hard time believing 20% of the spend ends up in my pocket. So I would be interested to see the reference on that.
      Given that the entire government and all insurance companies were unable to control costs and risk, how the hell are a bunch of disorganized physicians supposed to do it?

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