After Rejecting the Move to Value-Based Payments, Federal Health Policy Now Wants to “Charge Forward”
NYAPRS E News March 8, 2018 Harvey Rosenthal
This past February 23rd, an article in Health Exec reported that “in 2015, then-HHS Secretary Sylvia Burwell announced an ambitious goal for half of all Medicare payments to be tied to value-based care models by the end of 2018—but that’s not a priority for the agency under President Donald Trump, a CMS spokesperson told the Washington Post.
“The Trump administration’s focus has not been on a specific targeted number by the previous administration, but rather on evaluating the impact of new payment models on patients and providers,” said CMS spokesman Raymond Thor.
Under CMS Administrator Seema Verma, MPH, as well as Trump’s first HHS secretary, Tom Price, healthcare agencies have altered or scaled back previous efforts at pushing the value-based care transition while publicly committing to moving away from fee-for-service.”
However, the Administration’s new HHS secretary Alex Azar told the Federation of American Hospitals this week that “there is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward — for HHS to take bolder action, and for providers and payers to join with us. This administration and this President are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests” and that “we want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely,”
Here are more excerpts from Secretary Azar’s remarks:
….Back in the 2000s, shifting to a value-based system was just getting going as well. And yet here we are today — more than a decade later — and value-based payment is still far from reaching its potential.
So this is no time to be timid. Today’s healthcare system is simply not delivering outcomes commensurate with its cost.
…But it’s not the deal we’re getting right now. As all of you know, part of the problem happens to be the equation that we’ve used for healthcare in this country for decades now: paying for procedures and sickness.
For over a decade, we have been on a journey to replace that equation with a new one — paying for outcomes and wellness — but that transition needs to accelerate dramatically.
Upon taking office at HHS, I identified using the value-based transformation of our entire healthcare system as one of the top four priorities for our department. The others are combating the opioid crisis; bringing down the high price of prescription drugs; and addressing the cost and availability of insurance, especially in the individual market.
Value-based transformation in particular is not a new passion for me. It became a top priority for Secretary Mike Leavitt when I was working for him as deputy secretary of HHS, and it was taken seriously by President Obama’s administration as well.
But it has been a frustrating process: Providers have been understandably reluctant to charge into a completely new payment paradigm. Massive new processes and data-gathering requirements have been instituted, without any fundamental changes to our delivery system. Results for the early stages of federal efforts to encourage accountable care organizations have been, to be honest, underwhelming.
But there is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward — for HHS to take bolder action, and for providers and payers to join with us.
This administration and this President are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.
“Simply put, I don’t intend to spend the next several years tinkering with how to build the very best joint-replacement bundle—we want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely,”
HHS Chief Vows 'Bold' Action On Value-Based Provider Pay
By Jeff Overley www.law360.com
Law360 (March 5, 2018, 8:58 PM EST) -- The U.S. secretary of health and human services on Monday flatly declared that value-based payments in Medicare and Medicaid have been disappointing and that “bold measures” are needed to deliver on the payments’ potential.
HHS Secretary Alex Azar, speaking at a Federation of American Hospitals conference in Washington, D.C., departed from the federal government’s tendency in recent years to unreservedly trumpet value-based reimbursement. He specifically spotlighted accountable care organizations that bring doctors and hospitals together to coordinate care in hopes of improving outcomes and avoiding duplicative tests.
“Results for the early stages of federal efforts to encourage accountable care organizations have been, to be honest, underwhelming,” Azar said.
From 2012 through 2015, ACOs saved about $1.3 billion for Medicare, according to HHS. That’s a tiny fraction of Medicare and Medicaid spending, which tops $1 trillion annually.
“The results have been lackluster,” Azar said Monday.
ACOs come in several forms. Most are relatively modest collaborations that have little if any risk of losing money even if they don’t improve value. A handful of ACOs are highly sophisticated and can lose or gain millions of dollars depending on their performance.
In his remarks, Azar suggested that most ACOs need more leeway to operate as they see fit but also more in the way of actual accountability.
Health care providers, he said, were “not given new meaningful space to experiment” with health care delivery. Meanwhile, they were “allowed to share in modest cost savings but not asked to accept responsibility for cost overruns.”
The solution, Azar suggested, will require the federal government to remove the training wheels that have supported value-based reimbursement in its early years.
“We want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely,” Azar said.
In his speech, Azar described a multifaceted approach for improving value. Some of his ideas seemed like riffs on Obama administration initiatives, including greater price transparency and leveraging the size of Medicare and Medicaid to force change.
But Azar also repeatedly referred to government “burdens” on private industry as impediments to value-based reimbursement. He specifically criticized the government’s reporting requirements for quality metrics, the U.S. Food and Drug Administration’s restrictions on drug promotion, and anti-fraud restrictions on certain freebies, such as no-cost transportation to physician appointments.
Azar, who has identified health care value as one his four highest priorities, ended his speech by setting a goal of eventually being recognized as an instrumental force in helping Medicare and Medicaid get more bang for their buck.
“I am determined that we will look back at the years of this administration as a pivotal inflection point in the journey toward value-based care,” the secretary said.
ALEX AZAR LAYS OUT VALUE-BASED CARE AGENDA — The HHS secretary's four stated priorities, presented at a Federation of American Hospitals conference, generally mirror what the Obama administration pushed in its final years in office, POLITICO's David Pittman reports. The methods for achieving those goals, of course, will likely look different.
- Azar priority #1: Allow patients to access their medical records.
This was also the focus of the HHS health IT office in Obama's second term, David writes, noting that the office spent months drafting a "roadmap" for better information sharing and promoted new ways to access patient records.
- Azar priority #2: Increase transparency.
Boosting transparency of services will help patients better shop for care, he said. The previous administration also focused on making Medicare data public to let consumers compare the quality of various providers.
- Azar priority #3: Use of MACRA and CMS Innovation Center.
The secretary's message that "we will use these tools to drive real change in our system" could easily have been uttered by his predecessors, David notes. The Obama administration's efforts sparked some grumbling from providers, who said HHS was pushing pay-for-performance programs too aggressively. The Trump administration has been more deferential to providers, which brings us to the fourth point...
- Azar priority #4: Reduce government burdens.
Unlike the other areas, this wasn't a message traditionally delivered by the Obama administration.