REGULATORY REFORM OPPORTUNITIES TO FACILITATE VALUE-BASED PAYMENT

National Academy of Medicine Value Incentives & Systems Innovation Collaborative

Bill Kramer, Executive Director, National Health Policy

May 18, 2017

2 PBGH Members

3 New Strategies to Improve Value

Building evidence and sharing information

Advocate for specific policies based on the evidence of what works

The DRIVE Health Initiative was launched by PBGH and The ERISA Industry Committee (ERIC) – organizations representing America’s largest employers – to champion and accelerate the transition to a value-based health care system.

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With evidence from large employers’ experiences with innovative models, we will influence public policy to:

• Maintain and strengthen the federal government’s commitment to value-based strategies:

• Consumer Engagement and Financial Incentives • Alternative Provider Payment Models • Transparency and Performance Measures

• Ensure the federal government supports innovation in care delivery • CMMI authority to test and spread innovative provider payment and care

delivery models • Strengthen alignment with private and public sector purchasing

strategies

Evidence + Advocacy

5 Policy Recommendations

VALUE-BASED REQUIREMENTS Transparent information, Meaningful Outcome Measures, Meaningful Choices, Appropriate Financial Incentives, and more

REGULATORY ACTION • Medicare Access and CHIP Reauthorization Act (MACRA) • Federal health care programs must continue value efforts

CONGRESSIONAL ACTION • Consumer engagement and financial incentives • Alternative Payment Models

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• Meaningful performance reporting requirements

• Strong financial incentives for superior outcomes and experience of care

• Program design that leads system change away from fee-for-service, toward effective value-based payment

Executive Branch Action: MACRA

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• Meaningful performance reporting requirements • Outcomes, not process measures • Information that is useful for consumers and purchasers • Information that is comparable across payers and programs

• Strong financial incentives for superior outcomes and experience of care

• Program design that leads system change away from fee-for-service, toward effective value-based payment

Executive Branch Action: MACRA

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• Meaningful and actionable performance reporting requirements

• Strong financial incentives for superior outcomes and experience of care

• Bonus payments should reward excellence in the issues that matter most to patients, not just an ability to report on measures that providers are already succeeding on

• Greater emphasis on two-sided risk models, with fewer financial rewards available in the absence of two-sided risk

• Program design that leads system change away from fee-for-service, toward effective value-based payment

Executive Branch Action: MACRA

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• Meaningful and actionable performance reporting requirements

• Strong financial incentives for superior outcomes and experience of care

• Program design that leads system change away from fee-for-service, toward effective value-based payment

• Strong incentives to move from MIPS to APM track – bonuses for early movers, increasingly less favorable conditions for those who don’t start the transition

• Directional alignment with other payers, including program design, performance measures, attribution models, etc.

Executive Branch Action: MACRA

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• CMS needs an innovation hub in-house • Center for designing, piloting, scaling new models • Rapid-cycle learning and improvement • As largest purchaser, CMS can set the direction and pace of change

• To ensure CMMI programs are informative and effective: • Need sufficient scale and representation for results to be meaningful • Need to avoid self-selection bias • Need a strong signal about where payment is going

Executive Branch Action: CMS Innovation Center

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• Current CMMI programs can be improved with lessons from the private sector

• Example: Bundled Payments • Prospectively negotiated rates give providers the flexibility to coordinate and

provide the care that is best for their patients, even non-billable services • Measures of clinical outcomes, patient-reported outcomes, and patient

experience are important indicators of success • Episode triggers that precede an admission can improve the appropriateness of

care, including promoting lower intensity care and avoiding unnecessary surgery

Executive Branch Action: CMS Innovation Center

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Bill Kramer Executive Director, National Policy WKramer@pbgh.org linkedin.com/in/william-kramer

linkedin.com/company/pacific-business- group-on-health

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