PCPCC Responds to Latest SGR Proposal from Senate Finance and House Ways & Means

Statement Attributable to:

Marci Nielsen, PhD, MPH
Chief Executive Officer, Patient Centered Primary Care Collaborative

Dear Members of the Senate Finance/House Ways and Means Committee:

As a large and diverse stakeholder group, we thank you for this opportunity to comment on the bipartisan, bicameral legislative “discussion draft” proposal that seeks to repeal the Medicare Sustainable Growth Rate (SGR) and move the US health care delivery system away from the current volume-based payment system to one that rewards quality, efficiency, and innovation.  We applaud the work of the Committees and support your efforts to enhance the value of primary care through physician incentives that support patient-centered medical home (PCMH) transformation.

Representing more than 1,000 medical home stakeholders and supporters throughout the U.S., including providers, hospitals, health plans, employers, health IT, consulting, and pharmaceutical firms, the PCPCC is dedicated to advancing an effective and efficient health system built on a strong foundation of primary care and the PCMH. The PCPCC achieves its mission through the work of our five Stakeholder Centers, led by experts and thought leaders who are dedicated to transforming the U.S. health care system through delivery reform, payment reform, patient engagement, and employee benefit redesign.

The proposal contains a number of important provisions that better align Medicare payments with physicians’ performance on practice process improvements, quality, efficiency and effectiveness measures. The PCPCC has long supported an incremental approach to payment reform that transitions from fee-for-service (FFS) to new payment methodologies that encourage value and quality of care, over volume of tests and procedures.  Accordingly, the PCPCC applauds the Committees’ proposal for making significant strides towards rewarding physicians, nurse practitioners, and physician assistants with incentives to become PCMHs – providing both higher pay through performance bonuses as well as payment for chronic care management – which ultimately translates to improved care and better outcomes for patients and their families.  Those participating in a PCMH, ACO, or other alternative payment model will have pathways and opportunities to earn higher pay that is aligned with the value of care that they provide.

Recommendations and Comments

The PCPCC’s comments are focused on three sections of the proposal: the Clinical Practice Improvement Activities section – which is one of the assessment categories under the new Value-Based Performance Payment Program (Section II); Encouraging Care Coordination for Individuals with Complex Chronic Care Needs (Section IV), and Encouraging Alternative Payment Model Participation (Section III).  We conclude our comments with a summary of the growing body of evidence from patient-centered medical home initiatives across the US, highlighting cost, quality, and health outcome metrics from both the academic peer-reviewed literature as well as from industry reports.

Value-based Performance Payment Program (Section II)

The new Value Based Performance Payment Program (VBP) combines three existing reporting and incentive programs – the Medicare Physician Quality Reporting System (PQRS), the Value-Based Modifier, and Meaningful Use – into a single budget neutral incentive payment program, beginning in 2017.  This new program would assess eligible health professionals’ performance in the following categories: quality, resource use, clinical performance improvement activities (highlighted below), and Electronic Health Record (EHR) meaningful use. Health professionals would then be assessed and receive payment adjustments based on a composite score that encompasses all of the applicable categories and measures, as outlined in the discussion draft. Funding for the payment adjustments would come from the existing penalties for the current reporting programs.

Clinical practice improvement activities, which will prepare professionals to transition to an advanced APM(s), would be established through a collaborative process with professionals and other stakeholders and give special consideration to those practicing in rural areas and Health Professional Shortage Areas (HPSA). Specific activities from which professionals can select would fall under the following sub-categories:

• Expanded practice access, such as same-day appointments for urgent needs and after-hours access to clinician advice;
• Population management, such as tracking individuals to provide timely care interventions;
• Care coordination, such as timely communication of clinical information (e.g., test results) and use of remote monitoring or telehealth;
• Beneficiary engagement, such as establishment of care plans for patients with complex needs and self-management training; and
• Participation in any Medicare APM.

Because many of these criteria are components of a PCMH, a primary care or specialist practicing in one would receive the highest possible score for this category. A professional participating in any Medicare APM would automatically receive half of the highest possible score and could achieve the highest possible score by engaging in additional clinical improvement activities.

The PCPCC strongly supports this language because it creates meaningful incentives for clinicians to adopt the PCMH model of care.  We specifically support the proposal that certified PCMHs be able to qualify for the highest possible score for the clinical improvement component of the new VBP.

We recommend that the "weight" being given for clinical performance improvement activities be increased relative to the other categories, as clinical practice improvement is a prerequisite for achieving gains in quality, meaningful use, and resource use.  
One way, for example, to begin to increase the weight given to clinical performance improvement activities would be to establish a policy that if EHR adoption reaches 75% and the weighting for that performance category drops to 15% (as proposed in the discussion draft), the “freed-up” 10% be added to the clinical practice improvement activities category weighting, thus bringing it up to 25%. As already noted, the clinical practice improvement activities listed in the proposal are all part of the PCMH foundation, and therefore should be given additional weight.
We recommend that the Secretary develop a certification process and standards for PCMHs through a collaborative process with input from a wide range of stakeholders, including clinicians, consumers, accreditation entities, Medicaid agencies, state governments, employers, and private insurers.   Such standards should create multiple pathways for practices to demonstrate that they meet the standards and balance the needs of pediatric and adult populations.

Encouraging Care Coordination for Individuals with Complex Chronic Care Needs (Section IV)

The proposal would establish payment for one or more codes for complex chronic care management services, beginning in 2015. Payments for these codes could be made to professionals (physicians, physician assistants, nurse practitioners, and clinical nurse specialists) practicing in a PCMH or comparable specialty practice certified by an organization recognized by the Secretary who are providing care management services. In order to prevent duplicative payments, only one professional or group practice could receive payment for these services provided to an individual. Payments for these codes would be budget-neutral within the physician fee schedule.

The PCPCC has noted the importance of care management processes that are inadequately reimbursed in a traditional fee-for-service environment, especially as the population ages and those with multiple chronic conditions require additional support from their clinicians and care teams, as well as their families and caregivers. Accordingly, we commend the Committees for encouraging care coordination for individuals with complex chronic care needs by adding payment codes for these services beginning in 2015.  Other recommendations include:

Under this proposal, only one professional or group practice could receive payment for these services provided to an individual. We encourage the Committees to develop a clear and fair methodology for providing the payment to the appropriate provider given that there could be unintended consequences on patient care if providers must “compete” to receive the payment. 

The Comprehensive Primary Care Initiative (CPCI) has implemented criteria for the payment of a care management fee that we feel appropriately recognizes the important role of coordination in the primary care setting.  We encourage the Committees to either adopt this methodology or develop a similar policy.

We recommend that the legislation request that the Secretary work with health professionals organizations to define those services covered by the care coordination codes.
We recognize that as the Secretary implements new codes and payment policies to allow for billing and payment for complex care management for the Medicare population, there also is a need to establish payment policies and codes that address care coordination of children and adolescents under the Medicaid and CHIP programs.

Encouraging Alternative Payment Model Participation (Section III)

Recognizing that practice changes – as well as alignment of incentives across payers – are needed to support successful APM participation, professionals who have a significant share of their revenues in an APM(s) that involves two-sided financial risk and a quality measurement component would receive a five percent bonus each year from 2016-2021. Alternatively, professionals who have a significant share of their revenue in a PCMH model that has been certified as maintaining or improving quality without increasing costs, are also eligible for the bonus.

We commend the Committees for recognizing the valuable role the PCMH has played by allowing professionals in a qualifying PCMH to receive a 5% annual bonus in the years 2016-2021 and we support allowing PCMHs that demonstrate to CMS that they can improve quality without increasing costs, or decreasing costs with decreasing quality, to qualify as an APM -- including the 5% FFS bonus payments -- without having to take direct financial risk (two-sided risk). Other recommendations include:

The 5% annual bonus for qualifying PCMH and other APMs ends in 2021, but the transition to across-the-board 2% updates for all providers in APMs and negative 1% updates for all other providers remaining in fee-for-service, do not begin until 2024. This leaves a two-year gap where it is unclear what payment adjustments, if any, providers will be eligible to receive. If none, providers would be forced to transition to the VBP Program to receive bonuses for those two years, but then switch back to an APM in 2024 to receive the higher 2% payment. In order to avoid a disruptive and counter-productive scenario, we recommend that the Committees continue the 5% annual bonus for qualifying PCMHs and APMs through 2023.

The revenue thresholds necessary to qualify for the PCMH bonus are determined at the end of the year, but providers must determine at the beginning of the year whether to engage in the administrative work and reporting needed to comply with the VBP Program.  Since participation in a qualifying PCMH or APM exempts providers from the VBP Program requirements, we recommend that revenue determination is based on the previous year’s revenue. This will give providers the certainty they need to fully engage in either the VBP Program, or their PCMH.
While qualifying PCMH bonuses begin in 2016, the existing penalties under PQRS, EHR MU, and the VBM do not sunset until the end of that year.  We recommend that early adopters who qualify for the PCMH bonus in 2016 be exempt from reporting requirements and associated penalties for that year.
The proposal includes resources to assist small practices with transformation activities.  We encourage the Committees to increase this allocation from the $50 million included in the proposal and remove the geographic criteria, thus making this available to all small practices regardless of geographic location.  In our opinion, the current funding level is far too low to have any meaningful impact.

In addition, although we are not making specific policy recommendations, we are concerned that the costs of transformation for many primary care practices is prohibitive and recommend that the Committees consider provisions that would provide primary care physicians and their care teams with higher payments during the 10-year budget window as a means to build the primary care workforce and provide a stable revenue source that will facilitate practice transformation. 

Evidence for Primary Care and the Patient Centered Medical Home

As the discussion draft recognizes, the PCMH model provides direct and tangible impacts on quality of care, patient outcomes, and health care costs. Findings from dozens of providers, health systems, health plans, employers and state Medicaid programs have demonstrated up to 70% reductions in emergency room visits, 40% lower hospital readmissions, and hundreds of millions in health care dollars saved.  The magnitude of savings and quality improvements depend on a range of factors, including program design, enrollment, payer, target population, and implementation phase, successful examples of medical home programs include the following:

• Geisinger’s Proven-Health Navigator Model, which serves Medicare patients in rural northeastern and central Pennsylvania, found 71 percent savings over expected costs.
• Evidence from the Genesee Health Plan in Flint, Michigan, indicates that increasing access to primary care services and using health navigators to help patients adopt healthy behaviors and manage chronic diseases reduced enrollee use of emergency department services by 51 percent between 2004 and 2007 and reduced hospital admissions by 15 percent between 2006 and 2007.
• One study found that that WellPoint’s medical home model in New York yielded risk-adjusted total PMPM costs that were 14.5 percent lower for adults and 8.6 percent lower for children enrolled in a medical home.
• Preliminary results from CareFirst Blue Cross Blue Shield’s medical home program showed an estimated 15 percent savings in its first year of operation, before accounting for provider bonuses. Results from the formal evaluation reveal $98 million in total savings over two years.
• Similar levels of savings have been found in medical home models that include a mix of public and private payers For example, UPMC’s multi-state medical home pilot, which includes a mix of commercial, Medicaid, Medicare, and dually eligible patients, showed a net savings of $9.75 PMPM for individuals enrolled in the medical home pilot.

In addition to the successes described above, the PCPCC continues to compile and codify results from medical home initiatives that illustrate effects on the Triple Aim goals. As an appendix to this letter, we highlight outcomes from peer-reviewed journals and industry generated studies.

As Congress addresses the flawed physician payment system in Medicare and moves us toward a payment system that rewards quality, efficiency, and innovation, we support your efforts to create incentives for physicians and their care teams to transform their practices into PCMHs, and enter into risk-sharing practice arrangements such as Accountable Care Organizations. We commend the bipartisan, bicameral process the Committees have embraced to repeal the SGR which has created uncertainty for millions of Medicare providers and beneficiaries for over a decade, and we thank you for the opportunity to share with you our comments.