Trump administration retreat from pay models worries some

Industry observers worry that the Trump administration's pullback from some alternative payment models could stall Medicare's march to value-based care.

Over the past few months, the CMS has delayed the effective dates for four Obama-era bundled-payment initiatives covering cardiac and orthopedic care and is seeking public comment on the overall future of the models. It also announced plans to exempt up to 800,000 small and rural providers from the new quality reporting system outlined in the Medicare Access and CHIP Reauthorization Act.

The agency cited the need to reduce regulatory burden as a primary driver for these actions, but clinicians and policy insiders at a Bundle Pay Summit Tuesday voiced concerns that progress to reduce spending and improve quality will be stymied without a mandate to participate.

"You have got to walk a fine line between removing administrative burden and removing incentives for change," said Susan Dentzer, CEO of the Network for Excellence in Health Innovation, a not-for-profit think tank.

Evidence suggests providers drop out of voluntary programs when it looks like they won't perform well instead of actually improving care delivery, according to Dr. Earl Steinberg, who recently left his role as vice president of innovation & dissemination at Geisinger Health System in Pennsylvania.

He cited the 50% provider dropout rate for Medicare's Bundled Payments for Care Improvement Initiative as evidence.

Anecdotal evidence was beginning to show that the cardiac and orthopedic models were pushing hospitals to rethink treatment plans and look for ways to improve quality of life, according to Deirdre Baggot, a principal at ECG Management Consultants and a former reviewer for BPCI applications at the CMS.

Not everyone agreed, however, with mandating participation. As things are now, the CMS evaluates hospitals in episode-of-care models based on historical reimbursement and spending rather than a regional comparison on costs and spending at hospitals in the same region.

This makes it hard for hospitals to partner with other providers such as skilled-nursing or inpatient rehab facilities. Sometimes rates for these providers may be higher than a hospital's historical spending rates.

There is evidence that this disconnect is causing a problem for hospitals participating in the Comprehensive Care for Joint Replacement model, according to Dr. Mark Froimson, president of the American Association of Hip and Knee Surgeons.

"There are places where we see hospitals struggling because they have no leverage to find partners," he said.

Additionally, if a hospital has already achieved efficiencies in keeping costs low for care, being judged on historical spending means they could face penalties or not get a bonus if they don't reduce costs even further, according to Jonathan Pearce, founding principal of Singletrack Analytics, a healthcare financial and data consulting firm.

"If you're already efficient, you can't win," Pearce said.