Home

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.

 

The Problematic Push to Slow Medicare Advantage’s Positive Health Impact

September 23, 2021
3:40 pm

In the complex deliberations on Capitol Hill to assemble a social spending package that can pass both houses, one of the prominent proposals being discussed is the expansion of Medicare benefits to include dental, vision, and hearing coverage.  The cost would be significant, over $300 billion over 10 years based on an earlier estimate.  There are valid arguments to be made for closing gaps in current Medicare coverage. Where millions of Medicare beneficiaries need to be concerned, though, is in one of the ideas being tossed around to pay for this coverage expansion, placing the financial burden on Medicare Advantage (MA) plans and those who rely on them for their healthcare.

Some have suggested financing these additional benefits by excluding them from the benchmark that Medicare uses to determine payment rates for Medicare Advantage plans.  The USC-Brookings Schaeffer Initiative for Public Policy, in fact, published an essay advocating this approach.

Let’s break down exactly what this means and clarify the ramifications of such a step.  Under this approach, Congress would be creating new defined benefits for Medicare beneficiaries, but it would not be funding those benefits for MA plans.  MA plans receive rebates from the government by submitting bids for the coming plan year that are lower than the benchmark.  Those rebates are generally funneled back into additional benefits for enrollees and initiatives to address social determinants of health (more on that in a moment).  If the range of defined Medicare benefits expands but that is not reflected in the benchmark, that will mean a significant shrinkage of rebates to MA plans.

Put succinctly, for the first time ever, Medicare would be segmenting its beneficiary population into different groups with different levels of benefits. Medicare Advantage plans and enrollees will be paying for expanded benefits for those in conventional fee-for-service Medicare, and there will be consequences for doing that.

Today, more than four of every 10 Medicare beneficiaries – over 26 million in all – are enrolled in an MA plan, with that number growing annually.  And as more seniors enroll in these plans, the collective health of the over-65 population improves.  Research has shown that MA plans surpass conventional fee-for-service Medicare on multiple clinical quality measures and patient experience standards.

Just as importantly, as health experts come to the increasing realization that non-clinical social determinants can have an even greater impact on health than clinical care, more Medicare Advantage plans are providing coverage for transportation, housing, nutrition and social support services. This can make a profound difference in the lives of at-risk seniors. If, however, lawmakers choose to take dollars out of Medicare Advantage in order to fund proposed dental, hearing and vision benefits, something has to give.

No one is suggesting that Congress shouldn’t address existing gaps in Medicare coverage, but there needs to be greater foresight in determining how to pay for it.  It makes little sense to undermine a program that is providing quality healthcare to our most vulnerable age group and is addressing the social determinants that affect lives and health.

The Extraordinary Pandemic Efforts You Didn’t See

March 19, 2021
7:57 am

America is well aware of the heroic work performed throughout the COVID-19 pandemic by physicians, nurses and other front line healthcare professionals, tirelessly handling a rapidly escalating number of cases as the virus spread and hospitals were stretched to capacity and beyond.

But what we didn’t see was the vital work taking place behind the scenes to reconfigure healthcare data systems so that COVID-19 treatment guidelines could be rapidly disseminated, patient data could be made readily available, in-person exchanges could be shifted to telehealth, and more healthcare professionals could have access to critical data as they, too, were forced to work from home as America quarantined.

In an interview with the Wall Street Journal, Mayo Clinic Chief Information Officer Cris Ross described having to make decisions in days and weeks that would normally require months on how to make changes to the Clinic’s information technology systems in order to meet an unprecedented challenge.

He said, “We had to make close to 3,000 changes in our electronic health-records system to recognize rapidly evolving hospital-facility changes and protocols. Clinical guidelines for Covid treatment were developed and made available from within the records system. So, for example, if someone arrives at the emergency department who may have Covid, what are the steps? If that patient is admitted, what’s the next step? And if they’re sent to an ICU, what’s the next step?”

The rapid changes required of Mayo and other health systems when the pandemic struck underscores the importance of better preparing the nation for future health crises. Last year and into early 2021, the Healthcare Leadership Council worked with 100 different healthcare, employer and patient advocacy organizations to develop a comprehensive set of recommendations on how to strengthen private-public collaborations on disaster readiness and response. They include the creation of a 21st century public health data infrastructure that will enable real time access to critical information necessary to get ahead of a rapidly evolving crisis like COVID-19.

Many of the recommendations in this report were included in the recently-passed American Rescue Act, but much more work remains to be done before the next catastrophe strikes.

On the Precipice of a Major Stride in Healthcare Progress

August 13, 2020
4:49 pm

It actually seems elementary when you think about it.  To deliver the best possible and most cost-efficient care to patients, particularly those with complex chronic conditions, it is essential for all aspects of the healthcare system – primary care physicians, specialists, hospitals, pharmaceutical and medical device manufacturers, pharmacies, and others – to work together to coordinate patient care and deliver comprehensive treatment.

Currently, however, our federal laws and regulations prevent that type of patient-centered collaboration.  Measures known as the Stark Law and the Anti-Kickback Statute were created in the era of fee-for-service medicine to prevent bad actors from acting in ways adverse to a patient’s interests in order to gain some sort of financial benefit.  In our current transition to holistic value-based care, though, these fraud and abuse safeguards are serving as daunting legal barriers to the kind of working relationships that deliver optimal health outcomes.

We are hopeful this is on the verge of changing.  The Department of Health and Human Services has developed, with extensive public input, new rules to modernize these outdated laws and regulations and create opportunities for healthcare professionals and organizations to collaborate without fear of legal reprisal.  There will still be more than adequate protections against fraud and abuse, but the obstacles to patient-centered, value-based care will be significantly alleviated.

These new rules were submitted by HHS to the Office of Management and Budget for final review and approval last month. The Healthcare Leadership Council is one of more than 120 healthcare companies, associations, and patient advocacy groups that has asked President Trump to intervene and bring this critical work across the regulatory finish line.

As the letter to the president puts it, with the finalization of these rules “victory can be claimed in the name of helping get better coordinated care and reducing overall healthcare costs.”  We don’t see any reason to wait to begin reaping these benefits.

The Systemic Flaw that is Health Inequity

April 15, 2020
5:51 pm

During times of crisis, a point of structural weakness becomes glaringly visible and vulnerable.  The COVID-19 pandemic has placed a spotlight on the inequities that exist in this country when it comes to health and well-being.  The importance of the social determinants of health is more apparent than ever.

As concerns grew about the virus spreading, the predominant proportion of white collar workers could storm the grocery stores and then settle in for the long haul in front of their laptops.  Meanwhile, blue collar workers began losing jobs and health protection, or were forced to work in hazardous conditions, constantly at risk of exposure to the virus.  Available data is making clear the socioeconomic divide that COVID-19 has laid bare.  In New York City, the bottom income quadrant accounts for 36 percent of all coronavirus cases in the city while the top quadrant accounts for just 10 percent.

Those who have no choice but to risk exposure in order to receive a paycheck, or conduct daily life activities like visit a laundromat or make frequent trips to the grocery store because they don’t have the money to stock up the pantry, are the ones who have the least access to quality healthcare to protect their lives.  People in low-income jobs, or who have lost their job during the pandemic, face hospitalizations with high out-of-pocket costs if they become sick.  They also frequently don’t have the support systems to help them in the event of serious illness.

As this virus has a greater impact on those who are less able to achieve social distancing, it’s creating a greater awareness of the work that needs to be done on social determinants.  The World Health Organization has provided examples of the factors that, besides clinical care, play a role in population health.  Safe and affordable housing, access to education, public safety, availability of healthy foods, local health services, toxic-free environments – all have a tremendous effect on our health and longevity and too many Americans are lacking some or all of these determinants.

The good news is that the healthcare industry is devoting considerable resources and attention to addressing health disparities and the social determinants of health.  The Healthcare Leadership Council has held a national summit on the issue and issued a report with specific recommendations.  And, on the ground, we’re seeing multiple initiatives that are demonstrating how community health programs, telehealth services, and expanding the definition of health benefits to include commodities like housing and transportation are making a difference in the lives of vulnerable populations.

The COVID-19 crisis is making it clear that we need to accelerate these efforts.