Tag Archives: provider payment reform

Overview of proposed pass-through payment guidance

The Centers for Medicare and Medicaid Services (CMS) has proposed updates to Medicaid managed care pass-through payment guidance. The updates appear to simplify and streamline the approval process. New authority was also proposed to facilitate fee-for-service (FFS) transitions.

The new proposed authority would allow for transitional pass-through payments to facilitate transitions from FFS delivery systems to managed care delivery systems. This applies to new populations and also to new services carved in for populations already under managed care. CMS also proposed administrative simplifications intended to streamline or eliminate the need for prior approval.

CMS noted in the proposed rule that states are continuing to shift members and services from FFS delivery systems into managed care. Transitioning to an alternative payment structure requires a significant amount of coordination and communication between multiple shareholders, including providers, CMS, the state, and the managed care plan.

To read more about proposed updates to pass-through payments and opportunities for simplification, read this paper by Andrew Gaffner and Christine Mytelka.

CMS seeks to strengthen MSSP integrity with “Pathways to Success”

The initial structure of the Medicare Shared Savings Program (MSSP) allowed accountable care organizations (ACOs) to avoid sharing any losses for a limited time, so that ACOs could experiment with the MSSP without facing potentially serious financial outcomes if they were not able to achieve savings. The Centers for Medicare and Medicaid Services (CMS) has since detected several ways it believes ACOs are acting within the letter of the rules of the MSSP but not necessarily within the spirit. As a result, several facets of its proposed “Pathways to Success” rule aims to bolster the integrity of the program.

In this article, Milliman’s Jason Karcher and Brian Sweatman discuss ways in which ACOs have been identified by CMS as weakening the MSSP’s integrity and how it is proposing to address these concerns.

Strategic use of population-based payments to enhance ACO care management

Population-based payments (PBPs) provide Next Generation ACO Model (NextGen) participants with an alternative funding mechanism that can be used to improve overall care management, with the goal of achieving higher savings. Accountable care organizations (ACOs) that are able to negotiate payment structures with participating providers at lower costs than the fee-for-service rates paid by the Centers for Medicare and Medicare Services (CMS) can generate additional income.

While PBPs are currently restricted to the NextGen program, if the payment method proves successful, CMS could introduce a similar mechanism to the Medicare Shared Savings Program (MSSP) or other risk-sharing programs.

In this article, Milliman consultants Noah Champagne and Jason McEwen list the four alternative payment mechanisms that NextGen participants can elect, including PBPs and all-inclusive population-based payments (AIPBPs). They discuss how ACOs can generate additional revenue by strategically employing these mechanisms and provide an example of a PBP arrangement.

Which ACOs will have a pathway to success under CMS proposed rule?

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.

Medicaid state directed payment overview

In response to the Medicaid managed care final rule, several states have recently received approval from the Centers for Medicare and Medicaid Services (CMS) for state directed payments that support delivery system and provider payment reforms.

These arrangements allow states to require managed care plans to make specified payments to healthcare providers when the payments support overall Medicaid program goals and objectives. These arrangements provide a permissible mechanism for making supplemental payments in managed care programs as an alternative to pass-through programs. While pass-through programs were often opaque and not clearly understood by all affected parties, state directed payments enable states to coordinate value-based purchasing and other delivery system reform initiatives in managed care programs. These arrangements also allow states to coordinate value-based purchasing (VBP) and other delivery system reform initiatives in managed care programs.

As states consider options for state directed payments, it can be helpful to understand the types of programs that have been approved by CMS. In this paper, Milliman’s Jim Pettersson, Ben Mori, Luke Roth, and Jason Clarkson provide background on state directed payment arrangements based on their review of §438.6 (c) “Preprints” and supporting documentation for arrangements approved by CMS as of August 15, 2018.

Financial benchmark considerations for “Pathways to Success” MSSP proposed rule

The Centers for Medicare and Medicaid Services (CMS) proposed rule on the Medicare Shared Savings Program (MSSP) will significantly change the program if enacted. The proposal, titled “Pathways to Success,” includes changes to the financial benchmark methodology that measures gross savings or losses under the MSSP for an accountable care organization (ACO). There are four key elements where changes have been proposed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.

In this paper, consultants Jill HerboldCory Gusland, and Charlie Mills discuss the proposed changes and important implications for Medicare ACOs. This paper is the second in a series of Milliman papers on the proposed rule.