The only silver lining in the massive storm cloud hovering over the Affordable Care Act is the persistence of bipartisan support for payment reforms aimed at improving healthcare quality and lowering its cost.
While HHS Secretary Dr. Tom Price has temporarily postponed expanding the bundled-payment program, the House-passed American Health Care Act left intact all the delivery system reforms contained in the 2010 landmark ACA legislation, including funding for the Center for Medicare and Medicaid Innovation. The first version of the Senate bill did the same.
But that doesn't mean the CMS is proceeding smoothly toward value-based reimbursement. A new Government Accountability Office report found serious problems with Medicare's value-based purchasing program, which rewards or penalizes hospitals based on a suite of quality and efficiency measures.
Moreover, the constant attacks on the ACA may be slowing forward momentum. It's easier for career officials inside the CMS to hunker down than to proceed aggressively toward achieving the Obama administration's goal of having 50% of Medicare payments go to alternative payment models–either accountable care organizations or some form of bundled payments–by the end of 2018.
The evidence that is occurring on CMS Administrator Seema Verma's watch can be found in the latest draft rule governing implementation of the physician payment reforms in the bipartisan Medicare Access and CHIP Reauthorization Act. Fewer small practices will be subject to reporting the quality measures
The CMS may be right that the 37% of physicians who account for 65% of all Medicare payments will be governed by MACRA's new Merit-based Incentive Payment System rules. But that still leaves nearly two-thirds of the nation's physicians outside its core quality reporting system.
Until doctors take that first baby step, there's no way they will ever be ready to graduate into the risk-based contracting contained in alternative payment models such as ACOs.
Smaller practices and hospitals obviously have fewer resources to keep track of an ever-changing array of quality measures. That's why the CMS must limit its data reporting to measures that clearly help organizations and physicians improve quality and lower costs.
The GAO report on the hospital value-based purchasing program, which tracked performance by about 3,000 hospitals over the five years the program has been in effect, reveals what can happen when there are too many quality measures.
The report documents how the CMS heard the criticism that too many of its early measures focused on clinical processes, not on patient outcomes. For 2017, hospitals were scored on just three process measures, down from a dozen in 2013. On the other hand, the CMS added 10 outcomes measures, leaving the total about the same.
But hospitals don't have to report on all the measures. Moreover, they get to choose which measures they will report once they've hit the threshold for participation, and their scores in the missing categories are determined by their average score. No wonder smaller rural and urban hospitals, which report less data, do better under the program than safety net or large hospitals.
In 2015, the CMS added a single efficiency measure based on hospital's overall cost per beneficiary, and gave it a 25% weight for the final score. It's important to reward low-cost providers.
But that single factor enabled about 20% of lower-cost hospitals whose quality scores were below the median to jump into the group receiving rewards from the program, which redistributes up to 2% of Medicare reimbursement from poor performers to better ones.
Provider groups continue to pound the CMS for requiring too many quality indicators. If it's going to maintain political and provider support for the evolution toward value-based reimbursement, the agency in its final rules published later this year must streamline quality reporting requirements and offer a clear rationale for every measure used in its payment reform programs.
