December 20, 2016

Andy Slavitt, Acting Administrator
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Re: CMS-5517-FC: Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models (81 Fed.Reg. 77008 (Nov. 4, 2016))

Dear Administrator Slavitt,

Aledade partners with over 200 primary care physician practices, FQHCs and RHCs in value-based health care. The physicians are across 15 states and are accountable for over 170,000 Medicare beneficiaries. More than half of our primary care providers are in practices with fewer than ten clinicians. As an organization that is dedicated solely to helping independent physicians lead the transition from volume to value, we have a particular set of experiences and perspectives that are highly relevant to the key policy issues faced by CMS in implementing the MACRA legislation.

As described in more detail in our comment letter, a few critical improvements to the final MACRA regulation could improve the uptake of accountable care.
1. Creating a new MSSP model that takes advantage of the breakthroughs in the MACRA regulations regarding risk and matches that risk with proper rewards
2. Allowing independent practices to come together in “virtual groups” now for all aspects of MIPS reporting, and rewarding their clinical practice and health IT advances as they work towards participation in APMs (like gain share only ACOs) and on to AAPMs
3. Simplifying provisions related to other payer APMs and Certified EHR Technology
Thank you very much for your consideration as we move together through this exciting time in health care. Please feel free to follow up with me or Travis Broome (travis@aledade.com) if you or your staff have questions or would like to explore these positions further.

Sincerely,
/s/
Farzad Mostashari, MD
CEO and Co-Founder, Aledade, Inc.

Advanced APM Revenue-Based Nominal Amount Standard

CMS seeks comment for future consideration on the amount and structure of the revenue-based nominal amount standard for QP Performance Periods in 2019 and later. This includes: (1) setting the revenue-based standard for 2019 and later at up to 15 percent of revenue; or (2) setting the revenue-based standard at 10 percent so long as risk is at least equal to 1.5 percent of expected expenditures for which an APM Entity is responsible under an APM.

In our comments on the MACRA proposed rule we supported a 15 percent of revenue standard out of the gate to simplify the requirements. We continue to believe that 15 percent represents more risk than any other path under MACRA and more than satisfies the Congressional standard of more than nominal risk. In response to CMS’s request for comment, we want to highlight the critical nature of maintaining both a revenue based standard and a percentage of model benchmark standard. Using a percentage of model benchmark standard creates vastly different amounts of risk depending on the organization and depending on the APM model. How risky something is to an organization is dependent on the level of risk relative to their financial situation. This variation creates a situation where CMS will not be able to gauge the amount of financial risk any APM entity is actually taking on. What could be disastrously risky for one organization could be less than nominal for another organization.

Reintroducing a model benchmark standard to the revenue standard reintroduces all that was wrong with the standard in the first place, namely that the financial risk would in no way be related to the financial standing of the organization. If Congress had not asked CMS to measure financial risk this would not be a concern; however, Congress clearly wanted the APM entity to take on more than nominal financial risk. This means financial risk should be measured and it should be measured in relation to the APM entity not the AAPM. For these reasons CMS should maintain a pure revenue-based standard that stays well ahead of the risk in MIPS and finalize in the future a 15 percent of revenue standard.

CMS furthers asks for comment on cases where the APM Entity is one component of a larger health care provider organization and using the larger organization as the basis for a revenue-based nominal amount standard. To minimize the revenue based standard, a health care organization could limit the composition of its APM entity to only those health care providers who drive attribution in the model. We do not believe it is necessary for CMS to consider this in determining the revenue-based nominal amount for several reasons. First, by limiting the participants in the AAPM the health care provider organization would lose all the benefits of having those health care providers in the AAPM and that in and of itself has cost. Second, not all models use the same attribution methodologies and certainly do not have the same economics so what might seem wise in one model to include the larger health care organization may not make sense in another model and could inadvertently drive large health care organizations out of some models. Finally, by including the alternative pure percentage of benchmark standard for nominal financial risk CMS already has an alternative for larger health care organizations for whom the benchmark standard may only represent 15% of revenue or less for larger health care organizations. By having both a pure revenue standard and a pure percentage of benchmark standard, CMS ensures that all APM entities are taking on more than nominal financial risk while still allowing flexibility to account for the incredible diversity that is some larger health care organizations.

ACO Track 1+ Model
The most obvious work left undone by MACRA is having an ACO that matches the risk standards finalized in MACRA. We believe it is imperative that CMS implement an ACO model that does so as quickly as possible. We field questions everyday as to whether our ACOs will move to two-sided risk. Every day that goes by where we have to say we do not know is a lost opportunity. We continue to believe that the most straightforward way to implement just the new risk standards would be through the MSSP itself.

This risk can be easily integrated as a stop loss scenario into Track 2 and Track 3 with the addition of one line of regulation text each for Track 2 and Track 3 MSSP ACOs. Changes are in bold with higher risk for Track 3 due to its higher reward.

For Track 2: 42 CFR 425.606 (g)
(3) 3 percent in the third and any subsequent performance year, or
(4) 8 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year 2017 and 2018.

For Track 3: 42 CFR 425.610
(g) Loss recoupment limit. The amount of shared losses for which an eligible ACO is liable may not exceed 15 percent of its updated benchmark as determined under § 425.602 or 15 percent of the Medicare Parts A and Part B revenue of the ACO participants in any performance year.

However, we understand that CMS is on the path to implement it as an innovation model. This means there is at a minimum additional one additional piece of work to be accomplished. CMS must outline the reward that ACOs receive for taking on risk. While CMS may be tempted to see the 5% fee-schedule bonus as sufficient, we assure you it is not. First, many ACOs include participants who do not receive Part B payments in a significant way such as FQHCs, RHCs and hospitals. Secondly, most physicians (rightly or wrongly) believe they can achieve 5% in MIPS. Combining these two factors essentially negates the value of the 5% bonus for taking on risk. Finally, even in the rare scenario where all ACO participants only receive Part B payments the risk is still mathematically higher than the reward. The combination of these factors means it is imperative that the model itself offer reward for taking on risk. We recommend that CMS include in the model the potential for 60 percent shared savings for 8% of revenue risk and 75 percent shared savings for 15% of revenue risk.

As CMS is developing a new model we believe CMS can take this opportunity to focus on more than the risk reward tradeoff. The model can test other ways to bring the ACO model closer to measuring whether a person in the ACO get better care at lower cost than if the person had not in the ACO or a “difference in difference” approach.

We recommend CMS address two additional areas that are crucial towards moving physicians towards taking risk. First, CMS should change how it views risk adjustment. Rather than the current view of fear that it will lead to paying for coding, CMS should focus on the true purpose of risk adjustment which is make different populations comparable to one another. We have advocated, along with many others, for the last two years that to measure real ACO value risk scoring must accurately reflect the measured population. The artificial cap imposed by CMS on risk scoring turns ACOs into mini-insurance companies. This in turn scares ACOs away from two-sided risk because they are no longer responsible for just population health, but also statistical anomalies. This is the only area where CMS is not leading the accountable care movement, but falling behind commercial health plans.

The second important step CMS can take to measuring ACO value is to include regional inflation update factors instead of national inflation update factors in all contract years. CMS should seek to reward ACOs for the work they do in creating difference in difference ACO value not because they happen to be in a low cost or high cost area in any given year. CMS’s own analysis for their last regulations on the MSSP shows that very few ACOs can individually impact their area’s cost curve. Every ACO can impact whether the person got better care in the ACO than they did out of it. A regional inflation update ensures that the work of the ACO impacts the ACO’s financial future instead of regional cost arbitrage. ACOs have begun to calculate headwinds and tailwinds (i.e. is the benchmark lower or higher than the most recent year’s costs) to determine their likelihood of success. This is what CMS intended to reward areas with falling costs with more ACO participation. However, this intent has gone awry. First, rarely does any individual ACO have significant impact on their regional costs so the reward or penalty is not due to the past work of the ACO participants. Second, ACOs have not been able to determine these headwinds or tailwinds prior to receiving ACO data from CMS so the phenomenon cannot drive increases or decreases in ACO participation. Given that the hoped for effects of this policy have not materialized it is time to revert to the more accurate measurement of regional inflation in benchmarking and annual update factors in the first contract and end the unnatural arbitrage opportunities national inflation updates are causing across the MSSP.

Other Payer Advanced APM Financial Risk Criteria
We strongly believe that CMS should use the exact same criteria for qualifying other payer APMs as advanced as those used for Medicare. Both payers and health care providers should be able to submit the parameters of their program for qualification as an AAPM. CMS should be as open as possible in disclosing the specific qualifying terms of the other payer APMs, but should offer enough proprietary protection so that a health care provider is able to submit the parameters on their own.

Definition of Certified EHR Technology
We believe that CMS should not attempt to create different versions of meaningful use (now referred to as Advancing Care Information) through the AAPM requirements. CMS should, as they finalized in this regulation, define use simply as use of Certified EHR Technology in the AAPM. Different AAPMs will have different health information technology needs. They will all have a need to keep medical records and to make those records available to patients, care givers and other health care providers which is why we support the requirement that the EHR Technology be certified, but specific uses, measurement of those uses and the effects on the financials of the AAPM should be allowed to vary significantly from AAPM to AAPM.

Virtual Groups
Not all MIPS eligible clinicians are ready to participate in an APM. By laying out the framework for the virtual groups, CMS can make it a viable alternative for physicians in 2018. By serving as an alternative to consolidation, virtual groups can stem the revenue shift from small to large practices projected in the impact statement which in turn stems consolidation and preserves competition. We put forward a potential outline of virtual group as part of our comments.

How a virtual group is formed:

  • Voluntary election by physicians to be in a virtual group prior to the start of the performance year
  • Agree to work together to improve quality and other elected components of MIPS
  • Must agree to be scored on quality component
  • Can elect to be scored on
  • Clinical Practice Improvement Activities
  • Advancing Care Information
  • Resource Use
  • Can utilize any reporting method including Group Practice Reporting Option (GPRO)
  • Identify to CMS the officer responsible for the virtual group’s reporting

CMS already has several online systems for physician interaction regarding quality such as Quality Net, EIDM and HPMS. Any one of this could be adapted to record the grouping of the Taxpayer Identification Numbers that represent practices and to collect the election of which components of MIPS to be scored on.

Governance of the Virtual Group:

  • Establish a board with beneficiary representation to govern the virtual group
  • Empower an officer to take responsibility for the virtual group’s reporting
  • Establish a compliance officer
  • Conduct at least quarterly group reviews of their work toward improved quality

Responsibility of the Virtual Group:

  • The physicians and other eligible professionals agree to be scored as a group for purposes of MIPS
  • The virtual group is responsible for ensuring group reporting (i.e. CMS should not be responsible for aggregating the data across practices except in the area of resource use and other claims based measures)
  • The virtual group should have the capability to generate practice level information within the group (CMS will provide scoring at the virtual group level)

Limitations of the Virtual Group:

  • The sole purpose of the virtual group is to comply with MIPS reporting and it does not infer other advantages to the practices in regards to waivers or other exceptions
  • Virtual groups seeking additional group activities should seek to become an existing, more advanced group such as a clinically integrated network and/or an accountable care organization
  • Practices commit to a minimum of one year to being scored under MIPS as part of the virtual group