Re: CMS-1345-P, Medicare Shared Savings Program: Accountable Care Organizations

Transcription

1 Donald M. Berwick, M.D. Administrator Centers for Medicare and Medicaid Services Department of Health and Human Services P.O. Box 8013 Baltimore, MD Re: CMS-1345-P, Medicare Shared Savings Program: Accountable Care Organizations Dear Dr. Berwick: We write to you in conjunction with The Academy Advisors ( TAA ), a policy coalition of which many of us are Members, to present our comments regarding the Centers for Medicare and Medicaid Services ( CMS ) proposed rule for the Medicare Shared Savings Program: Accountable Care Organizations ( Proposed Rule ). We are Chief Executive Officers of Leading Health Systems, a term we use to describe the leading providers of integrated healthcare services in the United States. In addition to providing integrated care delivery, Leading Health Systems are dedicated to patient and community care, and are on the leading edge of medical research, education and training. Our health systems each consist of multiple hospitals and other ancillary care facilities, and many of our systems have facilities in more than one state. For years our health systems have been leaders in bending the cost curve and moving toward a more integrated care delivery network. We are strong believers in the concept of accountable care, and we believe we are well positioned to handle the widespread transition to the accountable care model. We understand and appreciate the gravity of the task which CMS, along with the Federal Trade Commission ( FTC ), Department of Justice ( DOJ ) and Internal Revenue Service ( IRS ), faced when drafting the Proposed Rule and related guidance. We are firm believers in the concept of accountable care as set forth in the Patient Protection and Affordable Care Act ( PPACA ), and consider Accountable Care Organizations ( ACO ) to be an additional step toward the goal of providing fully integrated care to the entire patient population. We are committed to improving health outcomes, lowering costs and increasing quality of care. We are also appreciative of the patience which the staff of CMS has shown throughout the process of implementing PPACA related rules. Further, we commend CMS in its intent to make the Medicare ACO program tenable to providers and suppliers of healthcare services, while simultaneously upholding its regulatory duties and responsibilities. However, after a review of the Proposed Rule, we regrettably feel that the focus of CMS has been too concentrated on the regulatory regime surrounding the Proposed Rule. We believe that for success in the Medicare ACO program, significant changes must be made to the framework, content, and structure. In our view, the Proposed Rule has failed to build on the established successful principles of integrated care that Leading Health Systems have developed over the past decade. We are committed to a 1

2 partnership with CMS to provide care coordination involving collaboration among providers and suppliers and the sharing of information across the continuum of care directed toward improving health outcomes, lowering costs and increasing quality of care. However, the Proposed Rule is unsuccessful in encouraging cost savings, efficiency, and improved patient outcomes. As drafted, the Proposed Rule does not accurately address patient outcomes and provider risks, and instead sets forth a regulatory regime which is largely untenable and unmanageable, even for providers which are already highly integrated. Each of our health systems anticipates providing a comment letter to CMS, either individually or in collaboration with the AHA, AAMC or another policy group, specifically setting forth what we believe to be the positives and shortcomings in the proposed rule. In this letter, we intend to address the issues which our healthcare systems feel to be the greatest foundational challenges to participation in the Medicare ACO program. While many concerns with the Proposed Rule and related guidance exist, the comments below provide in detail the primary concerns to Leading Health Systems. It is our hope and desire that CMS will make the necessary changes to the Proposed Rule that will encourage Leading Health Systems to be participants in a Medicare ACO. I. BENEFICIARY ASSIGNMENT CMS evaluated both prospective and retrospective assignment of beneficiaries, ultimately deciding in the Proposed Rule that beneficiaries would be assigned retrospectively to a Medicare ACO. With its decision to adopt the retrospective approach to beneficiary assignment, CMS has chosen the path of greatest resistance for healthcare providers. While retrospective attribution may be feasible in the future, it is a significant initial hurdle to provider participation in the Medicare ACO program. We believe that prospective attribution for the initial three year period is the correct manner in which to proceed, followed by reevaluation and analysis to discover whether prospective attribution is successfully meeting the established CMS policy goals. Successful capitation models must be based on both patient and provider understanding of the relationship dynamic. CMS has appeared to take the position, both in the Proposed Rule and in comments from senior CMS officials, that prospective beneficiary assignment might incentivize providers to give the best care to ACO beneficiaries, possibly at the expense of non-aco beneficiaries. Each of our health systems strive daily to provide the highest caliber of care to every patient that we treat. This care principle will not change based upon the assignment of beneficiaries. A fundamental tenet of providing high-quality integrated care delivery is early identification of high-risk individuals and proactive interaction to increase successful outcomes. The shift to a Medicare ACO model which raises the bar on physician, hospital, and supplier coordination to a new level will require a period of adjustment. This adjustment should not be further complicated by the lack of knowledge regarding which patients the Medicare ACO will ultimately bear responsibility. The inability of the Medicare ACO to manage care efficiently and proactively will significantly alter provider participation, and in our belief, the patient outcomes of the Medicare ACO program. We would recommend that CMS work with us to develop a prospective attribution model which addresses the concerns of CMS, while at the same time providing us the insight and knowledge to best 2

3 treat our ACO beneficiaries. We are confident that with both sides working in good faith, a successful solution can be reached. a. Majority v. Plurality Rule A second beneficiary assignment issue which presents a barrier to participation in the Medicare ACO program is the manner in which CMS has adopted the plurality method of beneficiary assignment. CMS has been given wide ranging legislative authority to determine the proper assignment of beneficiaries to a Medicare ACO. CMS discusses at length in the Proposed Rule the majority and plurality methods of assigning ACO beneficiaries. CMS decided that the plurality standard should be adopted, based upon the premise that a majority standard has the potential to exclude a significant number of beneficiaries. CMS ultimately adopted the plurality concept of beneficiary assignment, with a threshold of one primary care visit. We believe that plurality assignment is a workable framework; however we believe that a threshold of just one primary care visit is too low. We recommend that CMS modify the plurality standard to establish a threshold of more than one visit. This will allow for assurance of continuity within the Medicare ACO program. II. QUALITY MEASURES To receive shared savings in the Medicare ACO model, the CMS Proposed Rule sets forth sixty-five (65) quality metrics where certain standards must be achieved. In the first year, achievement is defined as reporting results in each of the 65 measures. However, after the first year, Medicare ACO participants must meet benchmarks in each of the 65 measures, with a miss in just one measure eliminating the possibility to receive any savings. We recommend that CMS reduce the number of quality measures and the success rate within the selected measures to achieve shared savings for the initial years of the Medicare ACO program. Instead of the approach in the Proposed Rule, we recommend adopting an approach which phases in an increasing number of quality measures and each year continues to raise the bar for success. The quality measures which CMS requires a Medicare ACO to report encompass both ambulatory and inpatient measures. The 65 measures fall within 5 equally weighted domains: Patient/Caregiver Experience, Care Coordination, Patient Safety, Preventative Health, and At-Risk Population/Frail Elderly Health. Points are assigned to each quality measure based on performance related to a national benchmark. Domain scores are calculated by dividing the actual points by the maximum potential points, determining a percentage of performance. Each of the 5 domain scores is then averaged to calculate the overall score. We believe that CMS has made very positive initial progress in developing a method for determining savings, and believe there is room for improvements which will strongly encourage provider participation in the Medicare ACO program. The inclusion of such a voluminous number of quality measures from the outset creates several problems for Medicare ACO participants. First, the capital, labor, and productivity cost of implementing 65 quality metrics by January 2012 is a deterrent to participation. Second, it will be extremely difficult for a Medicare ACO to reach necessary thresholds in all 65 of the quality measures in the three year demonstration period. Our systems are leaders in providing integrated care, and as such we have developed internal quality measures which we use to measure quality of care. From this experience, we 3

4 have experienced the dichotomy of achieving vast improvements in quality and care, while not always achieving 100 percent success in every category which we measure internally. We believe that as the Medicare ACO demonstration program progresses, additional quality measures can and should be successfully deployed. At the outset, however, 65 quality measures with required success in each measure will decrease participation and create a substantial hurdle. The Medicare ACO program is designed as a care collaboration cooperative among providers and suppliers of care. However, health systems which are hospital-centric appear to bear a disproportionate burden of the quality care metrics. While we understand the logic behind this, we recommend CMS reevaluate, specifically given that through Value Based Purchasing and other regulatory programs, our health systems are already being evaluated on a number of these quality measures. If a Medicare ACO fails to achieve its quality performance score on some of these metrics it has the potential to punish a participating health system multiple times through the various regulatory programs. By including such characteristics as readmissions, 30 day post-discharge physician visits and hospital acquired conditions, healthcare systems risk receiving these multiple penalties. We recommend that CMS reduce the initial quality reporting measures to a manageable number for a start-up Medicare ACO, and adopt an approach which increases the number of quality measures included over the course of the Medicare ACO program. Additionally, we recommend implementation of the most basic and least costly measures initially, working toward implementing the more challenging and costly measures. We also recommend that CMS allow a Medicare ACO to participate in shared savings, even if they do not meet the necessary benchmark in each quality measure. Instead of the all or nothing approach which CMS has outlined in the Proposed Rule, we encourage an approach which provides for a sliding scale of savings for failure to meet all quality benchmarks. We believe that with these changes to the Medicare ACO program, participation and enthusiasm in the program will increase significantly. III. SHARED SAVINGS To be eligible for shared savings participation, a Medicare ACO must first meet performance standards for each of the 65 quality metrics. A Medicare ACO then becomes eligible for savings only if the estimated average per capita Medicare expenditures under the ACO for Medicare FFS beneficiaries for Parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark. Once the benchmark is established, the assigned ACO beneficiary expenditures will be compared to that benchmark, taking into consideration the Minimum Savings Rate ( MSR ). CMS has proposed the MSR as a way to account for variables in expenditures throughout beneficiary populations. The Proposed Rule will base the initial benchmark calculation on the three-year expenditures for patients who would be assigned to the Medicare ACO had it been in existence for the past three years. This expenditure information will then be risk adjusted, and maintained for the duration of the threeyear period. The benchmark and savings calculations would include Indirect Graduate Medical Education ( IME ) and Disproportionate Share Hospitals ( DSH ) payments. In the Proposed Rule CMS sets forth a Minimum Savings Rate ( MSR ) of 2% for the two-sided risk model, and a variable MSR for a Medicare ACO with a smaller population under the one-sided risk model. The result is that a Medicare 4

5 ACO must achieve cost savings of at least 2%, and possibly greater under the one-sided risk model, before any shared savings can occur. We believe that the benchmark calculation is structured in a manner which makes the concept of Shared Savings discouraging for healthcare providers. Specifically, the inclusion of IME and DSH payments into the benchmark calculation for shared savings is a significant detriment to participation in the Medicare ACO program by urban health systems and academic medical centers. Teaching hospitals receive additional payments to support medical education, referred to as IME payments. Hospitals which serve a disproportionate share of low-income beneficiaries also receive additional payments to reflect the characteristics of the patient population, referred to as DSH payments. Academic medical centers often receive DSH and IME payments due to their typical geographic locations. Both DSH and IME are established programs that serve purposes medical education and indigent care which are social directives of the government. It is inequitable to encourage health systems to assist in promoting government policy goals on one hand, while at the same time punishing them for promoting these policies on the other. CMS has provided several justifications for its decision to include IME and DSH into the benchmark and the ACO expense calculations. CMS states that while it has legislative authority to adjust for IME and DSH in the benchmark, it does not have authority to adjust and remove IME and DSH from calculation of the Medicare ACO expenditures. CMS also states that exclusion of IME and DSH would result in an artificial and incomplete representation of actual spending of Medicare Trust Fund dollars, and that all relevant Medicare costs should be included in an ACO benchmark to maintain sufficient incentives for ACOs to ensure their assigned beneficiaries receive care in the most appropriate settings. At the same time CMS acknowledges in the April 7th Federal Register that the proposed methodology could provide ACOs with a strong incentive to realize savings simply by avoiding referrals to hospitals that receive IME and DSH payments. The ultimate result of including IME and DSH payments is an economic incentive to discourage beneficiaries from receiving care in urban and teaching hospitals, even in situations when these hospitals are better equipped to care for them. This is a problem which needs to be resolved to facilitate participation in the Medicare ACO program by IME and DSH recipient health systems. Without participation by these systems, most of which are focused in high-population urban areas, many beneficiaries will not have the opportunity to experience the care coordination and efficiencies of the Medicare ACO program. The MSR as calculated by CMS also presents certain barriers to provider participation in the Medicare ACO program. The legislative authority which CMS is granted to develop the MSR states in part: the Secretary shall determine the appropriate percent to account for normal variation in expenditures under this title, based upon the number of Medicare fee-for-services beneficiaries assigned to an ACO. Our concerns with the MSR are two-fold. First, we believe that a lower MSR during the initial years of the Medicare ACO program, adjusted as time progresses if necessary, would incentivize provider participation. Additionally we believe that CMS is unfairly discriminating against Medicare ACO participants by providing an MSR on the downside, but not accounting for randomness in data and 5

6 expenditures which could occur in an upward manner. Randomness in expenditures has the potential to occur with both an upward and downward bias. We recommend that CMS make changes to the benchmark calculation, specifically with regard to the treatment of IME and DSH payments. We also would recommend that CMS make changes to the MSR calculation which would make the program more appealing to healthcare providers in the initial years of the Medicare ACO program. Further, we would like CMS to consider the potential upward bias in expenditure data, and account for the same. We understand the rationale behind the benchmark and MSR guidelines as set forth in the Proposed Rule. However, as drafted, we feel like they will be significant detriments to provider participation. With modest changes on the part of CMS, the ability of providers, specifically academic medical centers and their urban counterparts, to successfully participate in the program will be greatly enhanced. IV. GOVERNANCE, APPLICATION & MARKETING CMS has set forth stringent requirements in the Proposed Rule which regulate the governance and marketing activities of a Medicare ACO, as well as the process of applying to the Medicare ACO program. We believe that while these issues are not foundational to the success of the Medicare ACO program, the combined burden in these areas, along with other concerns, does reduce the likelihood of provider participation. a. Governance CMS would allow existing provider organizations to become a Medicare ACO, although it has expressed reservations due to the fact that many provider organizations have other ongoing relationships with the Medicare program, which has the potential to cause confusion between roles. We commend CMS in its decision to allow existing provider organizations to transform to a Medicare ACO. Many integrated health providers already have or are in the process of creating networks which, on a smaller scale, are similar in concept to a Medicare ACO. The ability to transform these systems to a Medicare ACO, if the provider so chooses, is an advantage, and has the possibility to reduce costs for the Medicare ACO participants. In the Proposed Rule, CMS also requires that ACO participants hold at least 75% control of the Board of Directors, with the rights and obligations of provider and supplier participants outlined in detail. Additionally, the Board of Directors must contain representation from a Medicare beneficiary. We believe that these additional requirements with regard to the Board of Directors will increase the cost of the Medicare ACO program, and discourage provider participation. We also believe there is a question as to whether CMS has exceeded its legislative authority in its detail of instructions regarding Board of Director organization and structure. As justification for the Board of Director requirements, CMS appears to rely on the patient centered concept language contained in PPACA as justification, but when the language in the legislation is reviewed, it refers specifically to quality of care provided to patients not to organizational and structural issues. We recommend that CMS remove its specific Board composition and relationship requirements, and in turn, state specifically the best practice governance goals of a Medicare ACO which should be incorporated into a mission statement. Outside of this, we believe that a Medicare ACO should be 6

7 licensed and operate under State law, similar to other entities which are participants in the Medicare program. b. Application CMS has proposed a broad range of requirements for the Medicare ACO application which must be filed to qualify as a Medicare ACO. Examples of the requirements are: A Medicare ACO must describe evidence-based guidelines it intends to establish, implement, and update from time to time. A Medicare ACO must describe the patient engagement process it intends to establish and periodically update. A Medicare ACO is required to show a degree of interaction and independence among participating providers in the delivery of medical services, which enables them to achieve a more effective and higher quality patient experience A Medicare ACO is required to explain how shared savings will be distributed among participants and how the distribution will be used to align with the goals of the Medicare ACO. A Medicare ACO is required to describe how it will use HCAHPS survey results to improve care over time. We believe that while CMS has a duty to make the application process informative and contain a degree of rigor, the administrative burden to provide the required detail in a Medicare ACO application appears unnecessary. A successful Medicare ACO program will be one which is constantly evolving and adapting, yet the rigor and structure associated with the application process and to any modification to the Medicare ACO is too confining and overbearing. We recommend that CMS require a reasonable working plan from a Medicare ACO applicant, specifically setting forth the overall approach to achieving the projects goals of the Medicare ACO program. The work plan should take a high-level approach, with CMS then retaining the ability to require more narrowly tailored and specific information over the duration of the Medicare ACO program as a prerequisite of continued program participation. c. Marketing The Proposed Rule requires prior approval over any Medicare ACO marketing materials, or related communications to Medicare beneficiaries. CMS specifically states that all ACO marketing materials, communications, and activities related to the ACO and its participation in the Shared Savings Program, such as mailings telephone calls or community events, that are used to educate, solicit, notify or contact Medicare beneficiaries or providers/suppliers regarding the ACO and its participation in the Shared Savings Program, be approved by CMS before use to protect beneficiaries and to ensure that they are not confusing or misleading. CMS acknowledges in the Proposed Rule that it has no explicit legislative authority for these guidelines, yet attempts to justify 7

8 them through the patient-centeredness criteria legislative language. We believe that this language is intended to focus on patient treatment and care, not ACO/beneficiary communication. Additionally, this process as defined has the potential to be overly burdensome, especially given that many facilities which will be used in a Medicare ACO will also be primarily utilized by non-aco patients and beneficiaries. In a program which is designed to remove costs from the Medicare system, instituting costly marketing and communication barriers does not assist in making ACO participants more effective providers of care. Our systems have an incentive and an obligation to be honest with the communities which we serve and to facilitate relationships of trust with those we care for. The marketing and communications restrictions exceed legislative intent, and have the potential to be costly and impractical for many Medicare ACOs. We recommend that CMS establish basic beneficiary communication concepts, with CMS engaging in periodic monitoring for compliance. For a Medicare ACO program which does not comply with the basic beneficiary communication concepts, penalties should ensue. Conclusion In closing, we would be remiss if we did not briefly mention the importance of beneficiary data to the success of the Medicare ACO program. Given the framework and nature of the program, data sharing from CMS to Medicare ACO participants is critical. Without the proper data, shared openly and in a timely manner, the ability of the Medicare ACO program to succeed will be significantly impaired. CMS is asking healthcare systems to become its partner through the Medicare ACO program, and the primary way for CMS to foster a successful partnership will be open and unrestricted sharing of relevant data. We provide comments to the Proposed Rule with the optimism that CMS will focus on making the Medicare ACO program a success for patients, providers and for all who participate in the U.S. healthcare system. We firmly believe that our health systems are best positioned to carry forward the vision and create a successful Medicare ACO program. Yet, without changes to the Proposed Rule as drafted, we believe that the financial, structural, and technological hurdles will be so significant that many health systems will choose not to participate. With the necessary changes to the Proposed Rule framework, however, the Medicare ACO program can be a success and a roadmap for continued progress in increased efficiency and quality. We hope that CMS will make these necessary changes, and we look forward to partnering with CMS as we move forward to a more integrated, efficient, and quality focused healthcare delivery system. Yours sincerely, 8

9 Richard Afable, M.D. President & CEO, Hoag Memorial Hospital Presbyterian Newport Beach, California Marna P. Borgstrom President & CEO, Yale New Haven Health System New Haven, Connecticut Michael D. Connelly President & CEO, Catholic Health Partners Cincinnati, Ohio Peter S. Fine President & CEO, Banner Health Phoenix, Arizona Philip A. Incarnati President & CEO, McLaren Health Care Flint, Michigan Donald L. Jernigan, PhD President & CEO, Adventist Health System Winter Park, Florida Robert Laskowski, M.D. President & CEO, Christiana Care Health System Wilmington, Delaware Richard P. Miller President & CEO, Virtua Health Marlton, New Jersey Michael W. Murphy President & CEO, Sharp HealthCare San Diego, California Deborah A. Proctor President & CEO, St. Joseph Health System Orange, California James H. Skogsbergh President & CEO, Advocate Health Oak Brook, Illinois R. Timothy Stack President & CEO, Piedmont Healthcare Atlanta, Georgia Nick W. Turkal, M.D. President & CEO, Aurora Health Care Milwaukee, Wisconsin 9