Middle Ground: Medicare Offers Options Amid Shift to Value-Based Care
By Emma Freer Texas Medicine March 2024


When Sugar Land family physician Troy Fiesinger, MD, joined Village Medical, then Village Family Practice, in 2015, he was largely in the dark about value-based care. 

“I did not know what [that acronym] VBC meant,” he told Texas Medicine

Since then, Dr. Fiesinger has grown into an experienced practitioner of value-based care, which incentivizes quality rather than quantity. 

Prior to joining Village Medical, he worked for Memorial Hermann Health System, which participated in the Medicare Shared Savings Program (MSSP). Under the voluntary program, physicians, hospitals, and others involved in patient care form an accountable care organization (ACO), which then takes accountability for the quality, cost, and experience of care for an assigned group of traditional Medicare patients. If the ACO meets certain financial and quality benchmarks, it may be eligible to share in the savings it achieves for Medicare. 

When he arrived at Village Medical, the practice already had had success with MSSP. Building on that experience, Village transitioned to Medicare’s Next Generation ACO model in 2016 and then to its Global and Professional Direct Contracting (GPDC) model in 2021. In January 2023, the ACO Realizing Equity, Access, and Community Health (ACO Reach) model replaced GPDC.  

Like MSSP, ACO Reach involves ACOs caring for traditional Medicare patients. The new model also prioritizes health equity and physician leadership; incentivizes participating ACOs to take on more risk; and issues at least some payments on a capitated basis, meaning ACOs received a monthly payment per patient based on the patient’s risk score.  

Dr. Fiesinger compares the trajectory to elementary grade levels, with MSSP teaching its participant ACOs the fundamentals they will need to master in ACO Reach.  

“Start with the lowest-risk models because you don’t know what’s going to happen,” he said.  

CMS says it designed these models and other alternative payment models – including the Merit-Based Incentive Payment System – in service of its broader goal: to transition all Medicare patients from fee-for-service arrangements to value-based ones by 2030.  

Data show this transition is underway, with physicians increasingly belonging to a Medicare ACO and indicating their practice receives at least some revenue from value-based models, according to American Medical Association survey data. At the same time, the vast majority of practice revenue still comes from fee-for-service payments, and participation in value-based care models varies widely. (See “Medicare Advantage at a Glance,” page 36.)  

Physicians are divided on the issue of value-based care. But, with CMS forging ahead, the Texas Medical Association is focused on monitoring the development of such models, educating members about their options, and advocating for physician protections.  

Dr. Fiesinger, who serves on TMA’s Council on Legislation, sees both sides. On the one hand, his experience with value-based care has been transformative; participating in ACO Reach has granted his practice the freedom to invest in high-quality preventive care, lowering costs and thus freeing up funds to invest in support staff, like social workers, nurse care managers, and clinical pharmacists. 

“One of my favorite things about VBC plans is that I can finally provide all the services that I know my patients needed but were never covered [under fee-for-service],” he said. 

On the other hand, he acknowledges the steep start-up costs associated with participating in such models, which often require additional staff and advanced information technology; entail onerous reporting requirements; and create specific challenges for specialists, who lack as many choices as their primary care counterparts. TMA staff experts add that some specialists, like anesthesiologists, may worry about being assessed for patient outcomes that hinge on other physicians’ performance, such as that of surgeons.  

Dr. Fiesinger lauds TMA’s efforts to support physicians wherever they find themselves along the trajectory.  

The association’s Task Force on Alternative Payment Models seeks to educate the value-based-care curious, while TMA’s Council on Socioeconomics continues to meet with CMS to resolve member complaints related to Medicare and other federal programs, and its Reimbursement Review and Resolution Service helps recoup payments. (See “Medicare Advantage – and Disadvantage,” page 30.)  

TMA’s Council on Legislation also plays a role, ensuring federal and state laws and regulations related to value-based care serve physicians’ best interests, regardless of specialty or practice setting. For instance, the association closely tracked a bill during the 2023 regular state legislative session that would have allowed primary care physicians and health professionals to enter value-based contracts with PPO products sold by health plans. Although the bill didn’t pass, similar legislation is expected in future sessions. 

There’s already evidence that physician advocacy is having an impact. Last year, CMS proposed its Universal Foundation initiative, which seeks to streamline quality measures across the agency’s quality-rating and value-based care programs.

Meanwhile, TMA leaders are focused on building consensus among TMA’s diverse membership. 

“Let’s bring everyone together,” Dr. Fiesinger said. “Let’s all get on the same page.”  

Here’s a look at Medicare’s alternative payment models.

The Medicare Shared Savings Program (MSSP)

MSSP represents the Centers for Medicare & Medicaid Services’ (CMS’) attempt to apply value-based care goals – improved quality and reduced cost – to traditional, fee-for-service Medicare. Since its start in 2012, the program has grown, with more participants, patients, risk, and savings.  

Kim Harmon, the Texas Medical Association’s associate vice president of innovative practice models, says MSSP appeals to physicians for multiple reasons. Unlike ACO Reach and other experimental models, MSSP is permanent, offering participating accountable care organizations (ACOs) continuity. It also allows for the gradual assumption of risk and spares qualified physicians from the Merit-Based Incentive Payment System if they participate in a risk-based track.  

In 2022, the latest performance year for which data are available, MSSP saved Medicare $1.8 billion, building on five previous years of consecutive savings and quality improvements, according to CMS.  

Fifty-four Texas-based ACOs participated, with 37 earning shared savings, outperforming the national average by 10%. Savings ranged from $1.2 million for the Genesis Medical ACO in the Houston market, which cares for 6,061 MSSP patients, to $61.4 million for Baylor Scott & White Health, with 121,396 patients. In addition, two physician-owned ACOs – the Rio Grande Valley Health Alliance and the Alliance ACO – achieved the highest savings rates, of 13% and 11%, respectively. 

ACO Reach

ACO Realizing Equity, Access, and Community Health (ACO Reach) is a demonstration program offered through the end of 2026 that incentivizes accountable care organizations (ACOs) to take on more risk in exchange for capitated payments, which provide steady, flexible income, and possible bonuses for treating underserved patients. 

Data are not yet available for its first performance year, 2023, but Kim Harmon, the Texas Medical Association’s associate vice president of innovative practice models, points to rapid savings growth in ACO Reach’s predecessor, the Global and Professional Direct Contracting (GPDC) model, as a selling point. During the 2021 performance year, GPDC’s 53 participating ACOs saved Medicare $70.4 million; the following year, its 99 ACOs saved $371.5 million, with more than three in four earning shared savings, according to the Centers for Medicare & Medicaid Services.   

Ms. Harmon also acknowledges ACO Reach’s weaknesses, including its experimental status, which may turn off some physician practices given the start-up costs.  

Their concerns aren’t unfounded. Since its 2010 founding, the Center for Medicare & Medicaid Innovation (CMMI) has developed more than 50 new delivery models to facilitate the transition to value-based care, according to an October 2021 white paper. But only six of those models have generated meaningful Medicare savings, and even fewer have met the requirements for expansion.  

ACO Reach is part of CMMI’s refreshed strategy, which focuses on a more streamlined portfolio of delivery models. At press time, it remained to be seen how its 132 inaugural participants, 37 of whom care for Texas patients, would fare. 

  MIPS Value Pathways 

In addition to alternative payment models like the Medicare Shared Savings Program and ACO Reach, the Centers for Medicare & Medicaid Services (CMS) also offers the Merit-Based Incentive Payment System (MIPS), a quality reporting program in which participating clinicians receive financial incentives or disincentives based on their performance in certain categories. Last year, the federal agency launched MIPS Value Pathways (MVPs), claiming the program would reduce clinicians’ reporting burden, integrate measures that are more relevant to physicians’ scope of practice, and expand access to value-based care models among specialists. 

The Texas Medical Association and others in organized medicine have long voiced concerns about the complexity of the MIPS program and the heightened administrative burden that comes with each update, including MVPs. But CMS has stayed the course. (See “Fix Medicare Now,” page 18.) 

Seven MVPs were available during the 2023 performance year: anesthesia, chronic disease management, emergency medicine, heart disease, lower extremity joint repair, rheumatology, and stroke care and prevention.  

At press time, CMS had not yet announced results from the 2023 performance year or additional pathways for the 2024 performance year.  

Although MVPs remain optional, CMS “plans to sunset traditional MIPS in the future, at which point MVPs will become mandatory,” unless the clinician is eligible to participate in an alternative payment model pathway, according to the agency’s website.  

Until then, Michelle Schreiber, MD, director of CMS’ Quality Measurement and Value-Based Incentives Group, described MIPS as “the clinician value-based care program right now” during a January 2024 presentation to TMA’s Council on Health Care Quality.

Last Updated On

March 05, 2024

Originally Published On

February 29, 2024

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Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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