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CMS Demonstration Projects Continue To Expand

CMS Demonstration Projects Continue To Expand

The Centers for Medicare and Medicaid Services (CMS) is actively continuing its push beyond the Medicare Advantage (MA) Star program to refashion the Medicare, Medicaid, and commercial lines of business into cost-effective and quality delivery systems. This is very clear in three recent announcements involving both traditional fee-for-service (FFS) environments and managed care.

In the fall of 2015, CMS announced its findings with regard to Year 3 performance for the Medicare Pioneer Accountable Care Organizations and for 2014 for the regular ACO program (known as the Medicare Shared Savings program). The Pioneer ACOs (the more sophisticated integrated delivery systems) overall had three strong years of increased savings with 11 of 15 participants exceeding minimum savings levels. In addition, quality ratings continued to increase almost across the board. Results in the regular program are slightly more mixed, but overall both financial savings and quality rose. As such, CMS is pursuing a Next Generation ACO program, where financial incentives for hitting benchmark financial and quality targets are more generous than the current programs. Twenty-one ACOs currently participate in 2016 and CMS wants to increase participation in 2017. One criticism of the current programs is that the potential risks far outweigh likely rewards to physicians, hospitals, and other entities who come together to start an ACO. Next Gen seeks to address that concern.

CMS has also announced the Comprehensive Primary Care Plus (CPC+) initiative. CPC+ will build on the current CPC program by enhancing the payment and care delivery design. In the current program, over 400 practice sites (over 2,000 PCPs) in seven states and regions deliver care to about 2.7 million people in Medicare, Medicaid, and commercial plans. Current providers receive a case management fee and an opportunity for shared savings if they meet requirements of enhanced physician practice, including case and disease management. While the current program is just a few years old and few results can be substantiated, the enhanced program will begin in 2017 and provide for enhanced reimbursement opportunities as with the ACO refinement. The number of regions and practices will be expanded to up to 20 regions.

Lastly, CMS continues to push its interest in the MA Value Based Insurance Design Program (VBID). Many plans have already signed up for year 1 (2017). We know CMS is enamored with Special Needs Plans (SNPs) and the potential they have to rein in costs and improve quality in both the Medicare and Medicaid acute and long-term care worlds. Now CMS would like to take some of the proven elements from the SNP program and apply them to members in the mainstream MA program who do not participate in SNPs but have many of the same multiple co-morbidities and challenges.

Targeted conditions for Year 1 are:

  • Diabetes
  • Chronic Obstructive Pulmonary Disease (COPD)
  • Congestive Heart Failure (CHF)
  • Patient with Past Stroke
  • Hypertension
  • Coronary Artery Disease
  • Mood Disorders

Plans in seven states (a representative national sample) can apply to participate for 2017 and beyond.

  • Arizona
  • Indiana
  • Iowa
  • Massachusetts
  • Oregon
  • Pennsylvania
  • Tennessee

Think of this as “SNP Model of Care Lite,” where benefit design, supplemental benefits and patient management techniques are targeted at and come together to reduce costs and improve quality for these individuals. Plans do not get any particular financial advantage or incentives for participating, except for any potential cost reductions after what is expected to be additional administrative costs. Indeed, CMS expects that all of the techniques chosen to better monitor this subset of individuals within a plan’s broader membership will have all costs and potential savings accounted for in the regular bid structure.

The concept and demonstration plan is a good one, and participating plans will be better positioned to succeed in the future as more aggressive and complex Star quality measures emerge. It seems reasonable to assume that the broader Medicare population can be educated and incentivized to take better care of themselves much as we are beginning to see in SNPs. Indeed, reduced cost-sharing on primary care, specialist, and disease-related services, coupled with added disease-specific benefits, services and case management, should bend the cost curve on these individuals.

CMS too, will be entertaining reduced cost-sharing and other incentives for positive member behavior (e.g., participation in disease management programs) in VBID. This has been practiced to limited success in Medicaid programs.

The VBID pilot also might provide much needed data for CMS to begin to fully endorse differential benefit strategies, where benefits and-cost-sharing vary among members because of the difference in health status and complexity as well as member behavior. In general, in the past — and even today – such talk in government programs was viewed as discriminatory and unlikely to be entertained.

The program needs to result in lower costs for plans and ultimately lower plan bids over time to survive. But CMS seems committed to the program for the next five years and even expanding the initial mission to broader experimentation in years four and five.

In sum, no one can accuse CMS of sitting idly when it comes to health reform.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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