The CMMI’s short demonstration periods may also stymie progress, as providers don’t have the time to adopt necessary changes and respond to program incentives. A recent study of the Bundled Payment for Care Improvement Advanced model found that most of the demonstration’s savings came from providers who joined the program early.
Many experts think that too many of the CMMI’s models are voluntary rather than mandatory. When the agency first started, the models needed to be optional because neither the center nor hospitals knew how providers or the demonstrations would perform because so few people had experience beyond fee-for-service reimbursement.
Now that the CMMI and providers have a decade’s worth of experience under their belts, it’s time for the agency to test and expand more mandatory models. Volunteer models have proven that doctors and hospitals can respond to alternative payment models’ incentives. But they’re limited. The only providers that participate are the ones that think they’ll be successful.
“You may be inevitably paying for some of the success that would have happened … anyway,” said MedPAC Vice Chairman Paul Ginsburg, chair in health policy studies at the Brookings Institution and professor of health policy and management at the University of Southern California. “That makes it hard to reduce spending overall or save money for the Medicare program.”
Mandatory demonstrations have a greater potential for impact because they compel providers to undergo some of the management changes necessary to succeed under value-based payment, even if they’re reluctant. Providers with the most room for improvement usually haven’t adopted the reforms with the best return on investment, so getting them on board is critical for reducing costs or improving quality.
But mandatory models need to be designed differently because the CMMI runs the risk of negatively affecting the providers least prepared to adapt to payment and delivery reform efforts. That could cause access or quality problems for Medicare and Medicaid beneficiaries.
“Payment models that change too drastically can’t be implemented,” Slavitt said. “The American healthcare system needs to be able to adapt … do you move as fast as the fastest markets, or do you move as fast as the slowest markets can go?”
In place of mandatory models, “taking voluntary participants and randomizing them is probably the best way to go,” Navathe said. The CMMI would be able to test different intensities of interventions without running into some of the selection problems that are typically associated with voluntary models.
Uncertainty is another critical issue for CMMI models and providers. Since the CMS won’t certify most demonstrations for expansion, doctors and hospitals might not be willing to make all the changes necessary to maximize cost savings because it’s unlikely that a model will become permanent. That could limit the upside of CMMI demonstrations and slow the transition to value-based payment.
“I think the lack of long-term commitment on the part of CMMI does impact how people in businesses or practices are willing to invest in the infrastructure that’s necessary to succeed,” Brower said.
Trust is an issue too because some providers feel like CMMI has burned them in the past. In 2018, seven ACOs announced that they would exit the Next Generation ACO model after the agency decided to retroactively lower the average risk score for 2017 by 4.82%, which wiped out their ability to earn a bonus or avoid paying penalties. These providers believe the CMMI changed the rules in the middle of the game.
“I would not participate in a CMMI model,” said Alison Fleury, senior vice president of business development for Sharp HealthCare in San Diego. “I would not participate in any model that provides (CMMI with) that much latitude. … You can’t be in a business transaction where terms are dictated one way.”
But the CMMI is a federal agency, and it’s responsible for spending federal funds appropriately. It can’t focus exclusively on the wants and needs of providers and must balance them with the requirements of beneficiaries and the public, CMS officials say.
“I think we have an obligation to taxpayers,” Verma said. “I think that if we can clearly see that a model is not going well … we have an obligation to take action on that.”