Accountable care organizations (ACOs) participating in Advanced Alternative Payment Models (Advanced APMs) are eligible to qualify for a payment bonus equal to 5% of Medicare Part B revenue and avoid Merit-based Incentive Payment System (MIPS) payment adjustments and reporting requirements.
For ACOs to receive the 5% bonus, they must achieve Qualifying Advanced APM Participant status (QP status) by meeting the eligibility criteria outlined by the Centers for Medicare and Medicaid Services (CMS). In 2021, the requirements for an ACO to achieve QP status will increase significantly over 2020 requirements, making it substantially harder for many ACOs to qualify.
In this paper, Milliman’s David Byron and Chris Smith explore 2021 QP status criteria and actions ACOs can take to ensure they continue to qualify for the 5% bonus, even during a pandemic.
Last year, the U.S. Department of Health and Human Services announced a new payment model called Direct Contracting for entities that want to take on risk for fee-for-service (FFS) Medicare beneficiary expenditures. This program built upon existing Centers for Medicare and Medicaid Services (CMS) efforts to reduce healthcare expenditures while attempting to improve the quality of care for FFS Medicare beneficiaries. Although Direct Contracting is designed to appeal to a wide range of entities (including those that have not previously participated in risk programs with CMS) many current Medicare Shared Savings Program (MSSP) and Next Generation accountable care organizations (ACOs) are naturally going to want to understand the potential pros and cons of this program, and how it compares to their current ACO risk-sharing structures.
In this paper, Milliman’s Colleen Norris, Brent Jensen, and Dustin Grzeskowiak provide an in-depth technical evaluation of Direct Contracting, based on the CMS request for applications, along with comparisons to its sister programs MSSP and Next Generation ACO.
The new voluntary payment model of the Center for Medicare and Medicaid Innovation (CMMI), Primary Care First (PCF), will debut in 2020. As its name indicates, the new model focuses on primary care. PCF aims to offer additional flexibility in how physicians care for patients while holding them accountable for patient outcomes. It also offers providers a payment model option for accepting accountability for the high-need seriously ill population. Milliman consultants Raheel Sohail, Cory Gusland, and Daniel Henry provide an overview of the payment model in their paper “Early thoughts on the Primary Care First model.”
Shared-risk contracts between health plans and healthcare
providers are becoming increasingly common and sophisticated. As these
arrangements become more prevalent, there is an increasing amount of money at
stake between health plans and providers. Transparency and verification are
best practices in any relationship between parties that involves money, and
this includes provider risk-sharing agreements. A settlement audit prepared by
an independent third party is a recommended best practice for any organization
considering entering into or already participating in one of these
The underlying principle in these agreements is
straightforward: healthcare providers are in the best position to identify and
reduce unnecessary, duplicative, or inefficient care, and shared-risk
arrangements provide a financial incentive for providers to do just that. While
shared-risk contracts may be conceptually simple, the actual real-world
financial adjudication of them is usually complex.
This paper by Milliman consultants Colleen Norris and Tom Snook explores some proposed best practices for an independent audit of provider risk-sharing settlements, and discusses the value of this review for all parties involved.
The Chinese government has been actively promoting the
structural reform of its healthcare system. Healthcare payment reform is
expected to move ahead quickly with a pilot implementation of multiple social health
insurance payment model types. The
country’s National Healthcare Security Administration (NHSA) indicated that it
would develop a diagnosis-related group (DRG) standard suited to China’s
healthcare system as well as social health insurance management capabilities.
In this article, Milliman consultants Jiang Guanjun and Qiuwen Peng examine the transition from the currently mainstream fee-for-service model to the DRG payment model, the history of DRG in foreign markets, and the potential challenges of having a DRG payment model in China’s system.
The state of Colorado has implemented integrated behavioral
healthcare in primary care medical settings under a Centers for Medicare and
Medicaid Services State Innovation Model Award. This program includes about 325
primary care practices across the state and four community mental health
centers where physical healthcare is being integrated into the mental health
A key challenge of this initiative is the financial
sustainability of the integrated care practices after the federal support ends.
In this paper, Milliman’s Steve Melek, Katie Matthews, and Ally Weaver present a payment model that they believe would support the sustainability of integrated care practices while also helping payers to control healthcare costs. They look first at commercial payer spending on primary care and outpatient behavioral services and then examine the costs of building and maintaining an integrated primary care practice from the providers’ perspective.
They build their integrated primary care practice using a
“teamlet” approach. Their design also addresses the primary care physician
shortage by adding a nurse practitioner and physician assistant to the
integrated primary care practice. It includes medical assistants and licensed
practical nurses to complete the medical team.