Tag Archives: provider risk sharing

Developing population health management programs under risk-based contracts

Risk-based contracts are driving the development of population health management programs (PHMPs) that are designed to achieve the Institute for Healthcare Improvement’s Triple Aim goals. Health systems may need to redesign how they deliver healthcare to meet these goals. Risk-based contracts often give providers both the financial flexibility and incentive to redesign care.

In the article “Population health management program development: The path to the Triple Aim,” Milliman’s Nick Creten and Blaine Miller discuss the following five steps healthcare organizations must address when developing a PHMP in a risk-based contracting environment.

Step 1: Assess population costs, utilization, and risk
Step 2: Identify opportunities
Step 3: Segmentation
Step 4: Intervention development
Step 5: Monitor, assess, and improve

Qualifying APM participant considerations

This paper by Milliman’s Charlie Mills, Pamela Pelizzari, and Christopher Kunkel explores the challenges and opportunities regarding participation in an Advanced Alternative Payment Model (APM) track under the Medicare Access and CHIP Reauthorization Act (MACRA). The authors also discuss why becoming Qualifying APM Participants (QPs) may be desirable to some providers as well as the risks they might encounter through the process.

Here is an excerpt from the article:

Opportunities associated with QP status

Financial opportunities

Despite the potential downsides to participating in Advanced APMs and seeing QP status, there are also potential financial benefits, including the following:

A lump-sum payment equal to 5% of their prior year’s payments for Part B covered professional services. QPs can become eligible for this lump-sum incentive payment for years 2019 through 2024. Overall, this is the primary financial opportunity for QPs.

Insulation from the potential downside of the MIPS adjustment. In general, MIPS is a budget-neutral (i.e., zero-sum) program, with a financial downside of 4% in 2019, growing to 9% in 2022. Because QPs and Partial QPs are excluded from MIPS, they are not exposed to MIPS’s downside and do not have to navigate the hundreds of quality and performance measures that make up MIPS.

Opportunities for shared savings from the Advanced APM. QPs will have the opportunity to share in gains (and will generally be required to share in losses) from the Advanced APMs they participate in.

Higher conversion factor increases starting in 2026. Starting in payment year 2026, QPs will receive a conversion factor increase of 0.75% compared with 0.25% for non-QPs. Over time, this could result in significantly higher payment rates for QPs versus non-QPs.

Clinical integration benefits

Several of the currently available Advanced APMs aim to align incentives across different types of providers. For example, ACOs encourage physicians and hospitals to work together to ensure beneficiaries receive appropriate care that can keep them healthy and out of hospitals. In many cases, however, individual physicians do not see the financial benefits of these programs without entering into what can be complex and time-consuming gainsharing arrangements. By providing a 5% lump-sum incentive payment to QPs, MACRA serves to create an even greater incentive for physicians to participate actively in Advanced APMs.

While other payer Advanced APMs do not contribute to QP threshold calculations until performance year 2019 (incentive payment year 2021), it’s possible that the increased engagement physicians have in Advanced APMs that is due to MACRA will have trickle-down effects on other lines of business and patient populations beyond Medicare fee-for-service. This could serve to improve the quality of care and reduce costs for patients covered by other payers.

Overview of the Merit-Based Incentive Payment System

As part of the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-Based Incentive Payment System (MIPS) seeks to tie Medicare payments to provider performance within the fee-for-service (FFS) system.

In her article “MIPS adjustment overview,” Milliman’s Pamela Pelizzari discusses the MIPS inclusion criteria and the MIPS Composite Performance Score (CPS). She also demonstrates how the CPS leads to the determination of the MIPS adjustment factor and explores the effect of changing practices on both the CPS and MIPS adjustment factor.

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.

Advanced APM considerations for clinicians

Two value-based reimbursement models exist under the Medicare Access and CHIP Reauthorization Act (MACRA) that tie Part B payments to clinician performance: the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (Advanced APM) track. The Advanced APM track encourages groups of clinicians to shift from fee-for-service to delivery models in which clinicians assume more accountability and risk for the cost and quality of care. In the initial years of the program, MACRA provides incentive payments to early APM adopters.

This paper written by Milliman’s Lynn Dong and Pamela Pelizzari explores the definition of an Advanced APM, how providers can qualify to be paid under the provisions of the Advanced APM track instead of under MIPS, and why that might be desirable. In addition, the authors highlight the need for careful evaluation regarding APM participation because there is often a complex interaction between the risk inherent in an Advanced APM and the benefits under MACRA.

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.

MACRA deadlines and timeframes

While many of the programs of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) start after 2019, there are some aspects that will begin by 2017. In this article, Milliman’s Pamela Pelizzari, Susan Pantely, and Mary Huizinga explore key deadlines and timeframes associated with MACRA. The figure below represents an overall view of many of the MACRA activities from 2016 to 2027. The authors describe each one in the article.

MACRA

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.

MACRA issues for providers to consider

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) presents several key issues for providers. In this article, Milliman’s Lynn Dong, Colleen Norris, and Christopher Kunkel examine the five considerations below related to MACRA and how they may affect providers. The authors also highlight details from the proposed regulation as well as potential implications for providers.

1. Under MACRA, the Medicare Part B fee schedule increases only slightly through 2019 and not at all from 2020 through 2025. After 2025, there will be minimal annual increases to the Part B fee schedule.

2. The Merit-Based Incentive Payment System (MIPS) consolidates and streamlines three existing programs, resulting in both negative and positive adjustments to providers’ current reimbursements.

3. MACRA encourages providers to participate in Alternative Payment Models.

4. Providers will need to make numerous decisions regarding the submission of quality metrics, participation in Clinical Practice Improvement Activities (CPIAs), and Advancing Care Information.

5. Participation in an Alternative Payment Model (APM) requires a careful review of potential financial risks and opportunities.

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.