Build Your Own Payment Model
By Joey Berlin Texas Medicine July 2017

MACRA-Formed Committee, Health and Human Services Secretary Looking for Physician Ideas

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Quality Feature — July 2017 

Tex Med. 2017;113(7):53-48.

By Joey Berlin
Associate Editor 

It might seem like the never-ending onslaught of federal regulations leaves physicians little room to innovate or to chart their own course. But at least one relatively new component of the Medicare Access and CHIP Reauthorization Act (MACRA) allows physicians to use their knowledge and imagination.

Under MACRA, Texas physicians can generate their own alternative payment model (APM) ideas for MACRA's Quality Payment Program. And Tyler anesthesiologist Asa Lockhart, MD, is already taking a crack at it.

The MACRA law created the Physician-Focused Payment Model Technical Advisory Committee (PTAC), which began accepting proposals for physician-focused payment models (PFPMs) on Dec. 1, 2016. Any person or group can submit a proposal.

Physicians who participate in the Quality Payment Program fall under either the Merit-Based Incentive Payment System (MIPS) or an advanced APM. Dr. Lockhart says an advanced APM is the more promising long-term track, in part because of the intensive reporting and record-retention requirements of MIPS.

"I think it's kind of like democracy — it's the worst form of government except for all the others. That's kind of the way I look at APMs. I think that that is the future," said Dr. Lockhart, who is creating his own PFPM. "I don't think people want to be under the MIPS program long-term."

MIPS and APMs both tie physician payments to quality care. The PTAC process allows any physician to create what Dr. Lockhart believes his proposal will achieve: a model that succeeds "when the patient wins" and results in "reduced costs because people have better outcomes."

An Opportunity for Specialists

By participating in an advanced APM, practices can earn an annual lump-sum bonus of 5 percent of their total Medicare payments from 2019 to 2024.

Though physician-focused models can be for any and all types of practices, the language of MACRA explicitly calls for PFPMs to include "models for specialist physicians." Cliff Fullerton, MD, says that represents a great opportunity for medicine. Dr. Fullerton is chief officer of population health and equity at Baylor Scott & White Health and the president of the Baylor Scott & White Quality Alliance, the system's accountable care organization. 

"If you look at the models that are in place right now as far as APMs, they really mostly support primary care, if you really get down to it," Dr. Fullerton said. "The options for specialists, I think, are really unclear. There's certainly options out there, like bundles that are part of that. But it's not clear they really cover the Medicare activity of the majority of specialists. I think there's a lot of gaps there. And even if you look at MIPS, a lot of the quality measures that are available for different specialists, there are not enough of them there for them to have access to the full potential bump."

PTAC decides whether to recommend a PFPM for adoption, but the decision ultimately rests with the secretary of Health and Human Services (HHS). 

The new secretary, Tom Price, MD, said at PTAC's first voting meeting in April that he wants to hear from physicians around the country about what payment model would work for them, according to a report from Bloomberg BNA.

Secretary Price said that innovative payment models might work better than fee-for-service Medicare, according to the Bloomberg report, and might prevent physician burnout. He said input from rural and underserved areas was particularly important.

According to PTAC, the MACRA final rule defines a physician-focused payment model as an APM in which:  

  • Medicare is a payer;
  • Eligible clinicians participate and play a core role in implementing the payment methodology; and
  • Participating eligible professionals are trying to meet quality and cost goals on services they "provide, order, or can significantly influence."  

The final rule also outlined 10 criteria for a PFPM. (See "What A Physician-Focused Model Needs.")

PTAC currently consists of seven physicians and four nonphysicians. 

Anyone who wants to propose a model first needs to submit a letter of intent at least 30 days ahead of submitting the full proposal. He or she will then need to submit the proposal at least 16 weeks ahead of a PTAC public meeting for the committee to formally consider it. The proposed model will go through an initial review for completeness, and incomplete proposals will be sent back to the submitter. But once it's deemed complete, the model will be posted on the PTAC website for comment and will be assigned to a preliminary review team of two to three PTAC members, at least one of whom will be a physician.

The next hurdle is review and deliberation by the full committee, which decides whether to recommend the model to the HHS secretary. The committee can recommend implementation of the model. It can also recommend implementation as a "high priority" — meaning the model "meets the criterion and deserves priority consideration" on multiple criteria — or it can alternatively recommend limited-scale testing of the model. It also can recommend that the secretary not adopt the model. The final report to the secretary will be posted on the internet. 

Harold Miller, president and chief executive officer of the Center for Healthcare Quality and Payment Reform, is one of the nonphysician members of the committee. Mr. Miller says the PTAC process is intended to be a bottom-up approach, rather than a top-down one.

"It's an entirely demand-responsive system," he said. "It's up to Texas physicians, the Texas Medical [Association], whomever, to actually propose a model. It's up to anybody to do that, and it's a rolling process; in other words, you can submit an application any time you want."

Mr. Miller notes the PTAC's process is entirely public — the letters of intent and the proposals themselves are public, and anyone can submit comments on the proposals. PTAC's only discussions on proposals will come in its public meetings, and those will all be posted online. 

At PTAC's first meeting to consider proposals on April 10 and 11, it considered three, recommending two for limited testing and rejecting one. The American College of Surgeons (ACS) submitted one of the models that earned PTAC's recommendation for testing. Frank Opelka, MD, director of quality and health policy for ACS, says that as the committee considered that first group of physician-focused models, it was learning as it went.

"And I think conceptually, PTAC had certain things in mind, and we didn't necessarily have the same construct in our own mind. They were thinking ideologically about redesigning a care model and then designing a payment model to fit the care model. We were redesigning a risk-based payment model and trying to incentivize care redesign," Dr. Opelka said. "So that was a little bit different in where our starting point was and where our ending point was."

Despite that, Dr. Opelka said, "I think they were amazingly flexible, and they dug in deep and explored it, much to their credit." The process had enough flexibility, insight, and staffing support that the committee understood what they were looking at, he says.

"That's not an easy job for a bunch of volunteers to do to get a model this complicated, and I thought they were astute and asked great questions," Dr. Opelka said. "So I tip my hat to them. I think they did an incredible job of what we asked of them."

PTAC's second meeting to consider proposals is scheduled for Sept. 7 and 8.

A Texas Doc Builds a Proposal

Dr. Lockhart's proposal is called Low Barrier to Entry "because right now the criteria [for APMs] are so high and the bar is so high, most people are not incentivized to start the journey," he said. His model aims to change that. 

His idea is based on what Dr. Lockhart's proposal calls the six rights: "If we do the right things for the right reasons with the right relationships in the right location at the right time," his rough proposal says, "[then] we will deliver the right results."

He proposes using proven clinical models as "anchors" for the physician payment model. The anchor models would be ones "developed by national state or medical organizations in most cases but may include regional or local organizations" that have evidence backing up their effectiveness.

Dr. Lockhart's proposal names several models as potential anchors, such as the Michigan Surgical Quality Collaborative (MSQC). Formed in 2005 by Blue Cross Blue Shield of Michigan and Blue Care Network, the collaborative grew from 16 hospitals to 72 in 2016. The collaborative analyzes and shares data from each of its hospitals to improve care across all of the hospitals in MSQC. On its website, the collaborative says its evidence-based approach has put it on the road to a "rare triple win" for the region it serves: Patients come away with better results and well-being; its surgeons experience more autonomy and professional satisfaction; and hospitals, purchasers, and payers experience more efficiencies and bigger savings. Over a three-year period, according to a 2012 release from Blue Cross, the collaborative saved the state nearly $86 million.

"It's by minimizing potentially avoidable complications, enhanced coordination of care — very much physician-led initiatives. Because people want to do the right thing," Dr. Lockhart said. "It also leverages the competitive spirit amongst physicians, who tend to be somewhat competitive. Nobody wants to rank low. Everybody would rather have the top score, so they compare notes and processes."

In addition to using one of the "anchor" models Dr. Lockhart's proposal names, he says small and medium-sized practices could also "take an identified success such as the patient-centered medical home [PCMH]" and adapt the concept to their situation, even if they don't have the infrastructure to become a certified PCMH. (See "Home Sweet Medical Home," November 2014 Texas Medicine, pages 26–34.)

Dr. Lockhart's proposal seeks to show that using proven clinical models "can deliver the goals of MACRA without requiring initial financial risk." That would create the low barrier to entry he's striving for and "permit a diverse and large mix of physician practices to build and perfect their local models until such time they are prepared to take risk as originally conceived by MACRA." His proposal says that setup will particularly help small, medium-sized, rural, and underserved-area practices mature. His ultimate premise, he says, is "that physicians don't have to become a mini-insurance company in order to deliver the results they want to deliver."

"The perception is that you have to take risk immediately," Dr. Lockhart said. "And under my model, they could tip their toe in the water, get their governance down, their organization down, because most of America is not a Mayo Clinic or a Scott & White. The infrastructure that it takes to be successful probably in some of the alternative payment models … doesn't actually exist in most communities. So this would permit them to work together to develop a local model that would work for them, in scale and governance and complexity."

Dr. Lockhart said in May that he still needed to receive agreements to participate from the organizations whose models he named. He said he needed to put together a steering committee to put more of a framework on his proposal.

Leaving Fee-for-Service Behind

Implementing an APM, Dr. Opelka says, is "a major transformation" of business cycles, business models, and clinical care models, and it also involves the assumption of risk. The first question a practice has to ask itself, Dr. Opelka says, is what its risks are in a risk-bearing model: "What's the cost of caring for this patient within these episodes for an alternative payment model?" The second question: Does the practice have the ability to take on fiscal risk, so it can "weather the storm" if it fails early on? The third question is the operational risk — whether a practice knows what it takes to build "a complex team that's going to be able to take on this episode and align all the forces, put in new care models, and deliver?"

"If you don't have all those components built on a line and having shared accountability, you're stuck in a fee-for-service world, and you're set up for any one of them to trip up and fail," he said.

It wouldn't be difficult for a small practice to use such a model, he says.

"A small-group practice or a solo practitioner could absolutely succeed," he said. "But they've got to pay attention. They've got to be part of this. The challenge for them is, they're just for the most part on their treadmill moving as fast as they can, trying to keep the lights running. They don't have some of the other assets that would need to backstop them and help them go through the transformation. So it could take consultants and other support mechanisms to come in and provide that."

The assumption of financial risk in an APM is a potential scare-off for a number of practices. Ghassan Salman, MD, chief executive officer of Austin Diagnostic Clinic (ADC) and chair of TMA's Council on Health Care Quality, says although he sees MIPS as a path to an alternative model, ADC is focusing on MIPS participation for now. ADC is doing so partly because of the financial risk that comes with an APM, but also because of the infrastructure requirements.

"Not just the IT infrastructure, [but] infrastructure in terms of IT and the skills of the people to generate the data that you can give back to the physician, [and] the physician can act on to improve measures and decrease risk," he said. "It is not a wise decision for anybody to start taking financial risk at a time when you don't have all the equipment and the resources to manage the risk."

Having gone through the rough framework of putting together an APM, Dr. Lockhart says the process is "doable." While the financial risk involved is one of the biggest barriers, he says, the status quo is simply not an option. He says the requirements under MIPS for record retention, reporting, and potential payment clawbacks make it a less appealing option than an APM, and he believes "MIPS was partially designed to be punitive" to encourage physicians to join APMs.

"The secret sauce is the coordination of somebody taking ownership [and] shepherding the process," he said. "Because what we have right now in a lot of the situations is fragmented care. Everybody's doing their part, and maybe their little part that they're doing, they're doing well. But something else is getting missed, or [people are] assuming that somebody else is doing it, and it just doesn't get done."

But he knows the idea of such a drastic change scares some physicians.

"They're so intimidated by it they don't look into see[ing] what the potential benefit might be, but the dollars are substantial," Dr. Lockhart said. "As far as practice sustainability … the kind of things I'm discussing, it's where the future is. It's not in negotiating higher rates. All the additional money — No. 1, if there's any new money, it's going to be put into these types of initiatives. And No. 2, the savings are achieved by not spending money on complications that do no one any good."

Dr. Fullerton says the government has been saying for too long that it's going to move from volume-based care to value-based care, "and this program really does that." In his time in practice, he can't remember any time the Centers for Medicare & Medicaid Services gave physicians a voice in how to bring down costs. That the government is doing that now is a positive, he says.

"It's just incumbent upon us to be creative and come up with the ideas that could do it," he said. "We're the ones who are writing all the orders, and I think we have the opportunity to look at how we're doing that and come up with a plan." 

Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.


What a Physician-Focused Model Needs

The Physician-Focused Payment Model Technical Advisory Committee (PTAC) is following 10 criteria when considering proposals for Medicare physician-focused payment models (PFPMs): 

  • Value over volume,
  • Flexibility,
  • Quality and cost,\
  • Payment methodology,
  • Scope,
  • Ability to be evaluated,
  • Integration and care coordination,
  • Patient choice,
  • Patient safety, and
  • Health information technology. 

PTAC's request for proposals (RFP) includes information and guidance for anyone who wants to submit models, including full information on these criteria, characteristics of PFPMs the committee is likely to recommend, guidance for submitters, and a submission checklist. 

July 2017 Texas Medicine Contents
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Last Updated On

June 19, 2017

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Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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