Estimates of how the COVID-19 pandemic will financially affect the healthcare sector continue to evolve. Recent attempts to quantify the impact signal the likelihood that, for 2020, the reduction in spending associated with deferred care will outweigh in aggregate the increase in spending required to care for patients with COVID-19. However, at an individual provider entity level, the change in spending will vary based on a multitude of factors such as geography, the nature of services provided, and the demographics of the population served.
What does this mean for the mutual financial responsibilities created through value-based contracts? In short, for any given provider organization, the impact of COVID-19 on its value-based contracts will depend largely on certain actuarial, legal, and strategic aspects of each agreement.
In this paper, Milliman’s Cory Gusland, Anders Larson, and Brian Sweatman discuss 10 key questions that providers should be asking as they assess each of their value-based contracts during this uncertain time.
On December 21, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that will significantly change the Medicare Shared Savings Program (MSSP). This rule finalizes many of the “Pathways to Success” provisions detailed in the proposed rule published on August 8, 2018, with some modifications that may have a significant impact on a number of accountable care organizations (ACOs). At its core, the final rule creates a structured timetable for inexperienced ACOs to transition to downside risk, gradually increasing the maximum risk exposure as those ACOs gain more experience with the MSSP. In this paper, Milliman’s Anders Larson and Cory Gusland examine which ACOs will benefit from the final rule.
There are a variety of reasons why alternative payment models (APMs) can be more difficult to implement and manage in Medicaid, compared to the commercial or Medicare markets. Understanding these nuances and building strategies to address them is critical to the success of Medicaid APMs. An upcoming Milliman webinar hosted by Anders Larson, Rebecca Johnson, and Zach Hunt will focus on the challenges Medicaid payers face when attempting to establish APMs with providers. The webinar is based on their coauthored paper “Seven key challenges for Medicaid states considering alternative payment models.”
Title: Seven key challenges for Medicaid states considering alternative payment models
Date: Wednesday, February 27, 2019
Time: 2:00 p.m. EST
To register, click here.
While the use of alternative payment models (APMs) in the Medicare and commercial markets is prevalent, the use of APMs in the Medicaid market is low. There are several reasons why these models are more difficult to implement in Medicaid. Understanding the nuances of Medicaid APMs and building strategies to address them is critical to their success.
In this paper, Milliman’s Anders Larson, Rebecca Johnson, and Zach Hunt discuss seven key challenges that Medicaid payers face when trying to establish APMs with providers. The paper specifically focuses on shared savings/risk contracts based on total cost of care (TCOC) models. The following excerpt provides some perspective.
One challenge with any total cost of care model is that providers inherently take on some level of insurance risk due to random claims fluctuation that can influence results. This is true in the Medicare ACO models, which is why CMS uses a minimum savings rate (MSR) that varies by population size to limit its payments for “false positives.” This is likely to be more pronounced in Medicaid because of challenges with attribution, beneficiaries moving in and out of Medicaid, and a higher prevalence of zero-dollar claimants.
In August, the Centers for Medicare and Medicaid Services (CMS) released a sweeping proposed rule that, if enacted, will significantly change the Medicare Shared Savings Program (MSSP).
Under the proposed rule, CMS will change how it determines whether evaluation and management (E&M) services were furnished in a skilled nursing facility (SNF), as opposed to a custodial (non-skilled) nursing facility setting, for purposes of beneficiary assignment to an accountable care organization (ACO). The change will cause minimal impact to physicians who do not primarily practice in a nursing facility setting, but there will be important effects for physicians who do:
• Most nursing facility-based physicians will see a material change in the number of assigned beneficiaries, with roughly one-third seeing an increase or decrease of at least 25%. Office-based physicians will see minimal impacts to the number of beneficiaries assigned to them as a result of this rule change.
• ACOs with nursing facility-based physicians will no longer need to focus attention on how to adjust their place of service coding practices to improve their MSSP performances.
• Nursing facility-based physicians who are in ACOs that have chosen retrospective assignment will be less penalized by the regional cost adjustment to their benchmarks under the proposed rule. However, the penalty will continue to be far greater than if the ACO were to choose prospective assignment.
In this paper, Milliman’s Anders Larson and Jill Herbold discuss the current and proposed rules related to E&M services in nursing facilities and then present an analysis of their findings.
If enacted, the proposed rule from the Centers for Medicare and Medicaid Services (CMS) known as “Pathways to Success” will change the Medicare Shared Savings Program (MSSP) and affect all accountable care organizations (ACOs). The effect of the rule change will vary by ACO depending on each one’s current situation and unique characteristics—some ACOs will benefit from the change and others will not.
It is important for individual ACOs to consider their unique situations when assessing the impact this proposed rule will have on their organizations. In this article, Milliman’s Anders Larson and Cory Gusland highlight several key characteristics and considerations that affect most ACOs to identify potential winners and losers.