Is Mandatory Participation in Medicare Demonstrations Necessary?

May 25, 2022
10:31 am

Recently, Health Affairs Forefront, published a post by Dan L. Crippen, former director of the Congressional Budget Office and currently a Healthcare Leaddership Council consultant, that should be a catalyst for discussion on a critical element of the Center for Medicare and Medicaid Innovation’s future direction.

In his post, Dr. Crippen enters the debate over whether models being tested by CMMI should have mandatory or voluntary participation on the part of healthcare providers.  Some have argued that demonstration projects have floundered under voluntary participation because providers have brought in cohorts of comparatively healthy patients not reflective of the Medicare beneficiary population at large. He points to several examples, though, to make the case that voluntary participation did not result in adverse selection and that a more weighty problem plaguing CMMI demonstration projects has been the lack of timely data flowing to model participants.

The Crippen post is below and at the link above, which will take readers to the Health Affairs Forefront site.


The tenth anniversary of the Center for Medicare and Medicaid Innovation (the Innovation Center) was in 2020. This anniversary was accompanied by several retrospectives of the results of the Innovation Center’s first decade of operation. Unfortunately, most of the analysts, including those from the Centers for Medicare and Medicaid Services (CMS), reached similar conclusions: that the demonstrations deployed by the Innovation Center neither saved much money nor greatly improved quality, the two primary objectives set out for the Innovation Center in the Affordable Care Act.

Past and present Innovation Center directors concluded that the primary reason for the demonstrations’ failure to achieve the objectives was selection bias by the providers who had volunteered to participate in the various models. The claim is that the providers brought with them a cohort of healthier-than-average patients, making it easy to show savings relative to the benchmark. Relative to providers with sicker patient populations, these providers were more motivated to participate in the demonstrations due to the potential opportunity to earn a bonus from the Innovation Center if they spent less than the Innovations Center’s benchmarks.

Some of the demonstrations included an alignment algorithm for assigning patients to providers within an accountable care organization (ACO), at least one of which assigned patients depending upon their previous use of participating providers in the ACO. In some demonstrations, there was considerable turnover in both the beneficiaries and providers, which theoretically allowed ACOs the opportunity to alter their risk pool by selecting or changing providers (or other aspects of the model) to create a patient population with certain characteristics or health care needs. The former and current directors concluded that only mandatory participation by providers would overcome this perceived selection bias.

However, before seeking a solution to this problem, the question of whether selection by voluntary providers contributed to the disappointing results of the demonstrations should be explored. This article summarizes a multitude of analyses surrounding the reasons the demonstrations show little savings or quality improvement. The analyses indicate that the failure was not due to voluntary, as opposed to mandatory, participation by providers. The article then suggests several ways that any future selection challenges could be addressed, should they occur, without requiring mandatory participation.


The Evidence On Selection Related To Voluntary Participation

As described below, outside observers, papers published by think tanks, academic research, contractors hired by the Innovation Center to provide an independent evaluation of the demonstrations, as well as reports by the Innovation Center itself neither found the existence of selection bias nor recommended mandatory participation. These experts offered many suggestions on how the Innovation Center could achieve its stated objectives, but mandatory participation was not among them.

The ACO model is one of the Innovation Center’s longest running demonstrations, albeit in different forms over time, which attempts to measure cost-effectiveness and quality of treatment. It is the early experience of this model that most proponents of mandatory participation cite as proof of selection bias, primarily because so many providers dropped out at the beginning of the demonstration. Only 123 (36 percent) of the 339 ACOs entering the program between 2012 and 2014 were still participating in 2020.

There were several reasons for the attrition, much of which occurred early in the program. Many of the provider groups were small and ill-equipped to provide the complex reporting and data required by the Innovation Center. The participants did not understand the convoluted requirements before they enrolled, and only thereafter realized they were very unlikely to achieve savings, and therefore the bonuses offered by the Innovation Center. Moreover, participants did not have the processes, experience, or capital to ultimately assume the downside risk required later in the demonstration. In accordance with the rules of the program, they were allowed to drop out and did so.

An outside evaluator concluded: “Pioneer ACO stakeholders also noted that the relationship between the ACOs’ activities and their financial results were not well understood or articulated and that they struggled to firmly understand the Pioneer model rules such as the beneficiary alignment algorithm and financial benchmark calculations…[which] raises the question of whether the alignment algorithm may de-align or not align beneficiaries who are less healthy.”

Other credible sources determined that voluntary participation did not result in adverse selection. For example:

  • One analysis concluded: “We also find no evidence that ACOs systematically manipulated provider composition or billing to earn bonuses…. Robustness checks revealed no evidence of residual risk selection…. Careful examination of selection issues revealed that these findings were not driven by nonrandom participation.”
  • A study published by the Brookings Schaffer Center concluded: “Evidence suggests that there was minimal systematic patient-level risk selection by ACOs in the first three years of the Medicare Shared Savings Program (MSSP).”  
  • An internal CMS evaluation noted: “It does not appear that participants are selecting healthier patients.”
  • The Innovation Center engaged outside experts to evaluate the operation of each demonstration, several of whom included explicit conclusions about selection bias. One expert concluded: “This finding suggests that AIM [AIM Investment Model] ACO participant changes over time did not result in selection of certain types of beneficiaries, on average.”

No evaluator of the many demonstrations suggested that that mandatory participation was necessary to produce better results. In one demonstration, the third-party reviewer concluded that the results of the mandatory model were no better than voluntary models. One study directly compared results for mandatory verses voluntary participation and concluded: “spending changes did not differ between the voluntary and mandatory hospitals. This result does not support the concept that organizations perform better when self-selecting into programs.”

If Not Selection, Then What?

While adverse selection did not distort model results, studies did show that there was a myriad of other factors that plagued the initial demonstrations and persisted throughout much of the first decade. A common complaint by providers was a lack of timely data from the Department of Health and Human Services on demonstration operation and performance. One CMS internal evaluator lamented that the inability of CMS technology systems to perform basic tasks for value-based care, including providing performance data to participants, was a key contributor to the reasons providers dropped out.

Additionally, in a 2020 Medicare Payment Advisory Commission meeting, commissioners expressed the view that the multiplicity and overlap of demonstrations made it difficult for participants to sort out the effects of one demonstration from the other. This burden of sorting through the complex requirements for providing data and reports, and inconsistent reporting specifications between the demonstrations, caused many smaller participants to quickly drop out of the demonstrations.

The benchmark calculations, which were intended to measure providers’ effects on costs, were too narrowly drawn and created disincentives that increased over time. The use of historical performance for providers could lock in original calculations of savings/costs. Savings by providers with high-cost patients resulted in lower future benchmarks, which made it more difficult to continue to achieve savings, reducing the incentive to do so.

Many of the shortcomings of previous demonstrations were recognized by the Innovation Center in its assessment of the first decade. The review included a number of suggestions, including health equity a centerpiece of every model; reducing the number, complexity, and redundancy of the many models; re-evaluating how the Innovation Center designs financial incentives to ensure meaningful provider participation (presumably including mandatory participation given the director’s previous comments); better enabling participants to handle down-side risk by providing the tools to participate; reducing the complexity of establishing benchmarks; and expanding the definition of success to include lasting transformation and a broad array of quality investments, rather than focusing on each model’s cost and quality.

Looking Ahead

Despite evidence to the contrary, the Innovation Center has not publicly dropped its position that adverse selection is a problem and that the solution is to require mandatory participation by providers.

Even if selection remains a concern for the Innovation Center, there are ways to detect and correct for selection. One alternative is the expanded use of risk adjusters to assess each participant’s risk before, during, and after the demonstration. Risk adjustment, which is typically used to establish initial payment rates, can also be used to evaluate the risk pools of participants at the end of demonstrations, with payments and shared savings adjusted accordingly.

If benchmarks remain the comparator, risk adjustment will become more important, especially as applied to high- and low-cost beneficiaries as benchmarks converge over time. Risk adjustment is and will continue to be an imperfect process but can be improved by better data, improved statistical techniques, and perhaps, artificial intelligence.

Evidence from many different sources shows that adverse selection has not heretofore been an issue and is not a cause of the failures of past Innovation Center demonstrations in meeting the objectives of savings and quality. Other factors in the operation of the demonstrations are much more likely to explain the results. If selection should ever become an issue, there are ways to adjust models other than forcing providers to participate.


Americans Deserve the Full Truth About Medicare-For-All and its Ramifications for their Healthcare

May 05, 2022
4:24 pm

So much of the nation’s discussion about the Medicare-for-all concept takes place through a political prism.  It’s important, though, to fully understand what such a drastic change to our healthcare system would mean for patients and the care on which they depend.  We welcome Barclay Berdan, the chief executive officer of Texas Health Resources, a faith-based non-profit healthcare system, to share his expertise on the subject.

Americans Deserve the Full Truth About Medicare-For-All and its Ramifications for their Healthcare

by Barclay Berdan, chief executive officer, Texas Health Resources

Everyone, advocates and opponents alike, acknowledges that changing our healthcare system from the status quo to a Medicare-for-all concept would bring about a seismic transformation in the way Americans receive care. Given that such an idea has become a frequent talking point in policy and political circles, it’s critical that the public understand the full ramifications of such a complete remake of American healthcare.

Today, roughly 160 million people in this country have private health insurance that is sponsored by an employer. Almost 14 million have purchased private health plans through the Affordable Care Act marketplaces. Even within the Medicare program, 26 million beneficiaries have elected to enroll in private Medicare Advantage plans. Under the predominant Medicare-for-all proposals we’ve seen, these private plans would all go away and be replaced by a single government-run health coverage infrastructure. We would be remiss if we didn’t give thought to how this could affect patient access to hospitals and physicians.

Hospitals are required to think about what we call payer mix. Private health insurance reimburses at a higher rate for healthcare services than Medicare and Medicaid do.  In fact, historically, Medicare and Medicaid payments are less than the actual cost hospitals absorb in providing those services. (According to one study, in 2017, those combined Medicare and Medicaid underpayments totaled nearly $77 billion.).  Hospitals, which generally operate on very thin margins, can afford to keep their doors open and provide care to Medicare and Medicaid patients because of those comparatively-higher private plan reimbursements.

So what happens if every single American becomes a Medicare beneficiary?  Our first concern has to be those communities that are in greatest risk of losing their hospitals even under the current healthcare financing system.  According to the Center for Healthcare Quality and Payment Reform, 130 rural hospitals have closed in the past decade and another 900 are in danger of ceasing operations in the near future.  Many of these healthcare providers have low financial reserves and could not absorb a significant revenue loss.

Then, there are the current and future healthcare workforce shortages that were only exacerbated by the COVID-19 pandemic.  A Mercer study tells us that, just four years from now, we will have a shortage of 3.2 million healthcare workers. Within a system financed entirely by the federal government, how will salary rates be set for healthcare professions and will they be sufficient to encourage more people to pursue health-related jobs?  And will we have enough personnel to meet what will be an expected rise in utilization under a system in which presumably everyone is covered for every healthcare service (or, will a Medicare-for-all system have to impose restrictions on utilization, a topic that has been severely under-discussed up to now).

Of course, it is always possible that, in creating a Medicare-for-all program, Congress could establish reimbursement rates that are sufficiently high to fully replace the loss of private plan payment levels.  That would, however, raise a plethora of questions about total cost for a Medicare-for-all program and the taxes required to pay for it.

The point being that we are likely to hear a lot about Medicare-for-all in the weeks and months ahead. We need more than political rhetoric, though, to rationalize completely overturning a healthcare system that is currently utilized by most Americans.  Tough questions about ramifications and possible consequences need to be asked and answered before we even consider moving from point A to a radically different point B. In the meantime, we should look at how to improve the current system to provide better care to those who don’t currently have access to it, roughly 10 million uninsured individuals without access to subsidies. Also, the administration’s action this month to improve the Affordable Care Act’s coverage affordability for families was an important step.  It is abundantly clear that we can improve both health care and health by improving what we have.


Are We There Yet? Measuring Industry-Wide Interoperability

April 14, 2022
1:05 pm

I was pleased to provide a summary of Surescripts’ interoperability panel in Orlando for the Intelligence in Action blog. I have provided a copy below, without the accompanying graphics. You can find the original Surescripts post here.

Are We There Yet? Measuring Industry-Wide Interoperability

By Mary R. Grealy, Healthcare Leadership Council President  •  April 14, 2022

In conjunction with HIMSS 2022, Surescripts hosted a panel entitled “Measuring Industry-Wide Interoperability in the Time of COVID.” I was pleased to join a panel consisting of Tom Skelton, chief executive officer of Surescripts, Cris Ross, chief information officer of Mayo Clinic, Ashok Chennuru, vice president and chief data and insights officer at Anthem and Matt Swain, chief of staff at the Office of the National Coordinator for Health IT (ONC), with Colin Hung, chief medical officer and editor of HealthcareScene, serving as moderator.

Skelton opened the discussion by highlighting Surescripts’ annual National Progress Report, citing that almost two million healthcare professionals processed over 20 billion data transactions in 2021. He noted that the demands on the provider and clinician community are substantially different than they used to be, and the improved flow of information is illustrated by metrics from the report – such as 200,000 clinicians utilizing Surescripts Record Locator & Exchange and an 81% increase in the use of Clinical Direct Messaging.

Here are three of my key takeaways from our conversation at HIMSS 2022:

  1. Proper information flow provides the whole picture of a patient’s health and clinical decision support.

    Swain pointed out the rise of engagement in national exchange networks and the positive impact on patient access. Chennuru built upon that, saying that it is necessary to treat interoperability as a core competency rather than viewing it as simply meeting a mandate. He added that the whole of the healthcare ecosystem goes beyond a patient going back and forth between home and the health system, and data from health-related social needs organizations should be included as well. However, he stated that those groups outside traditional healthcare settings lack connectivity because they don’t have the infrastructure. Chennuru pointed out that partnerships, such as one between Anthem and Epic, allow patients to access complete data sets and lead to greater patient engagement. He said that obtaining stakeholder alignment across the enterprise will create the biggest impact by collecting all data related to health and well-being rather than just looking at the clinical aspects.

  2. Progress has been made.

    Skelton stated that we have managed to achieve trust in data. Providers and clinicians may not be satisfied with the current level of interoperability, but the information that is moving is at least trusted.

    “The information is trusted,” said Skelton, noting the nearly two million healthcare professionals who used the Surescripts network to process over 20 billion data transactions in 2021. “Trust is an important element, a foundational element. Trust is what gives us permission to go on and to do more.”

    I noted that there has been a significant shift on the issue of privacy, and patients now understand the importance of healthcare providers having their information to provide better care.

    Swain highlighted how many hospitals offered their patients access to their medical records. He said in 2012, just one-quarter of hospitals did, but ONC saw that number increase in just two years to 90 percent. Swain observed that incentive payments motivated hospitals and providers to digitize their health records, but some providers were left out – such as behavioral health and long-term post-acute care. Providers are incentivized to transmit information for public health, he said, but there has not been a sufficient emphasis on sending public health data back to physicians.

    Ross said that the future would be defined by what we do with the FHIR standard and how the data is exchanged, mentioning that consumer engagement is episodic and that we need to move beyond that. He said that with the interoperability achieved, we can move from viewing data retrospectively and start to think about things prospectively to truly manage the health of Americans. We can unleash some of the machine learning and analytics that we have all been leaning into for years. He pointed out that we have proven we can do interoperability for some, but now we need to determine how to do it for all.

    Swain added that government, payers, providers and vendors all came together during the pandemic and were able to collaborate and make things happen that would have taken years otherwise. We proved to ourselves that we can work together.

  3. Measurement tracks progress and informs on areas of need. Measuring interoperability has proven to be a challenge. That’s why the Healthcare Leadership Council worked with the University of California, San Francisco, on the report “Opportunities for Private Sector Measures to Inform and Advance Interoperability Policy,” which describes existing public sector measures, presents select measures by “use case” from private sector companies, highlights current interoperability measurement gaps, and offers recommendations for public and private sector organizations to coordinate efforts around interoperability measurement.

    Chennuru stated that measurement will raise awareness and that we must be mindful of access versus outcomes. Consider, he said, whether the patient and their care provider have the right information for the right purpose at the right time to get the right diagnosis and the right level of care.

    Ross acknowledged that the healthcare system is broken in the United States. Interoperability isn’t the only tool that can fix that problem, he asserted, but it is an essential tool in the toolbox. It is important to have a sense of where things stand so we can understand what is achievable.

    Skelton explained the need to move beyond the anecdotal and identify milestones to measure progress. It is not about proving that we are close to an end, he said, it is proving that we are constantly better than the day before and that every day there is progress being made somewhere. Make sure that you know where your bullseye is as you move step by step, he said, so that you’re in a position where you can claim progress.

I added that we must have standardization as we gather critical data, especially on social determinants of health. Swain suggested we need to simultaneously keep raising the bar and looking for new areas to measure progress.

HIMSS 2022: What’s in Store

February 08, 2022
10:19 am

The HIMSS Global Health Conference & Exhibition is approaching quickly. This year it takes place March 14-18 in Orlando, Florida. A price increase will go into effect on February 14, so be sure to register before then.

Each year there are hundreds of education sessions and a packed exhibition hall. The Interoperability Showcase provides live demonstrations and tours to attendees, displaying advanced real-time data exchanges in a variety of healthcare settings. There are additional networking events in the evening, providing an opportunity to discuss and digest all of the information downloaded throughout the day. The Healthcare Leadership Council is looking forward to the engaging and collaborative environment which inspires health system transformation.

Here is booth information for Healthcare Leadership Council members that will be exhibiting at HIMSS:

Change Healthcare
Mayo Clinic

Prescription E-Labels are Past Due

November 30, 2021
12:32 pm

Now decades into the digital age, most tasks can be completed electronically – ordering food, booking appointments, transferring funds, and even signing contracts. In the healthcare world, medical records and laboratory results can be accessed online rapidly and securely. Technological advancements have made these activities convenient, user-friendly and efficient.

And yet, there are corners of American healthcare that have continued to utilize paper as though the digital option is not available. More than 100 billion pages of paper are printed and distributed as package inserts for medications delivered to pharmacies each year. While this is environmentally wasteful, there are also safety implications with this process. Labels can be revised multiple times a year, and when that change is approved it can take up to a year for the updated paper copy to make it through the supply chain to the pharmacists. The delay can lead to conflicting information being provided to pharmacists and result in erroneous prescriptions negatively impacting the health of patients.

The National Institute of Health manages the National Library of Medicine’s DailyMed website, and has been posting the electronic prescribing information it receives from the FDA since 2005. In fact, in 2014 the FDA recommended that the default method of providing prescribing information be switched from paper to electronic, but the proposed rule has continuously been blocked by Congress. Most providers already rely on real-time electronic updates, as FDA-approved changes are immediately updated on DailyMed. It is not surprising that the physical labels, which are printed so small they are nearly impossible to read, usually get thrown away without a second glance as the most up-to-date information is readily available online.

Moving to a digital form is not just more convenient for prescribers, but for patients as well. If a medication comes with a QR code, the patient can access the updated information and be alerted to any changes or product recalls. They could also use a search function to jump to text with personalized information, augment the font, or watch videos that explain how to administer the medication. The opportunities to engage patients, increase medication adherence, reduce environmental impact and save money are infinite. The time for prescription e-labels is well past due.