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Analysis

Verma: CMS Developing More Mandatory Payment Models

By Steven Porter  
   April 26, 2019

The embrace of mandatory models comes after the Trump administration was regarded in its early months as preferring voluntary models.

Centers for Medicare & Medicaid Services Administrator Seema Verma signaled Thursday that the Trump administration has its eye on rolling out more mandatory payment models.

The administration had been seen as preferring voluntary payment models under former Health and Human Services Secretary Thomas Price, MD, who resigned in 2017 after just seven months on the job. But the tone seems to have shifted under current HHS Secretary Alex Azar, who's been on the job 15 months and has repeatedly voiced support for mandatory models.

Verma mentioned the forthcoming mandatory models in opening remarks to the National Association of Accountable Care Organizations (NAACOS) spring conference in Baltimore.

"Looking forward, you can expect that some of the models we have under development will be mandatory," Verma said in her prepared remarks.

"One reason for mandatory models is that selection effects can be significant in voluntary models," she said. "Selection effects happen when only the providers who would benefit financially from a model choose to participate, thereby reducing the amount of savings that the model can generate."

"Requiring participation also helps us understand the impact of our models on a variety of provider types, so the data resulting from the model will be more broadly representative," she added.

A report released in January by the Government Accountability Office that compared voluntary and mandatory payment models found pros and cons for each type but noted that mandatory options "are more likely to give CMS generalizable evaluation results."

In her speech, Verma addressed the Trump administration's "Pathways to Success" overhaul of Medicare's ACO program—a set of changes that NAACOS and other stakeholders had asked, unsuccessfully, be delayed.

"While concerns were raised that we would see providers drop out of the program under the new parameters, providers are committed to pursuing value," she said, noting that 90% of eligible ACOs with agreements that would have ended at the end of 2018 decided to extend their agreements.

"We are offering a second application cycle this summer to provide ACOs with another opportunity to join the redesigned program," she added.

Verma also said it's encouraging to see so many ACOs taking on additional risk. While only 19% of ACOs are in two-sided risk arrangements right now, 38% of "Pathways to Success" applicants have applied for arrangements that would qualify as advanced alternative payment models (Advanced APMs), she said.

"This is real progress," she said.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Mandatory models can bypass the selection effects seen in voluntary models, the CMS administrator said.

The statements were made to NAACOS, which has had some concerns about the administration's Medicare ACO program overhaul.


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