June 6, 2011
VIA ELECTRONIC MAIL Donald Berwick, M.D. Administrator
Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1345-P
Mail Stop C4-26-05 7500 Security Boulevard Baltimore, MD 21244-1850 REF: CMS-1345-P
RE: Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations Dear Dr. Berwick,
Catholic Health Initiatives (CHI) appreciates the opportunity to provide comments on the Medicare Shared Savings Program and Accountable Care Organizations (ACO) proposed rule. CHI is a faith-based, mission-driven health system that includes72 hospitals; 40 long-term care, assisted living, and residential units; two community health service organizations; and numerous physician practices and home health services across 19 states. As a health system, CHI is committed to patient-centered, coordinated, evidence-based healthcare throughout our organization.
The Catholic Health Association and the American Hospital Association have provided detailed recommendations on the proposed rule. CHI offers the following specific comments.
Regulatory Burden
In response to Executive Order 13563, issued by President Barack Obama on January 18, 2011, HHS recently announced a plan for retrospective review of various regulations. This April 13, 2011, notice and request for information seeks public input on overly burdensome or outdated regulations in an effort to simplify and streamline the regulatory burden facing entities regulated by HHS.
ACO final rule. For example, the Affordable Care Act requires ACO participants to have a mechanism for shared governance, but CMS expanded upon that to require 75 percent control by participants as well as the inclusion of a Medicare beneficiary. This is just one example of overly prescriptive requirements.
While we understand that the regulations must meet the requirements of the Affordable Care Act, we urge the CMS to bear in mind that the nation’s healthcare providers face an enormous regulatory burden already. ACOs will be a learning experience for CMS and ACO participants, and ACOs should be provided with as much regulatory flexibility as possible to address local circumstances and needs.
Additionally, we ask CMS to review programs across its domain to ensure consistency in regulatory requirements. For example, the Medicare Shared Savings Program proposed rule requires an ACO to meet more EHR requirements than the EHR meaningful use rule does. This type of inconsistency leads to even greater regulatory burden.
Recommendation: We urge CMS to propose only those rules necessary to implement the Affordable Care Act and to avoid adding burdensome requirements that will hinder ACO formation and
operation. Additionally, we ask CMS to ensure consistency across all programs when implementing the new shared savings program regulations.
Governance
The proposed regulations are too narrow regarding governance of the ACO. The proposed
requirements for board structure—specifically that ACO participants or their representatives must have at least 75 percent control that is proportionate among ACO participants—are without regard for actual contribution by those participants.
While we appreciate the intent behind a high-percentage participant control requirement, this requirement is too rigid and would not necessarily lead to the desired results. CMS is allowing for little or no flexibility in the creation of ACO governing bodies with this requirement. Representative boards are problematic for a host of reasons, key among them that a governing body has a fiduciary responsibility to the organization, not the individual interest of the person sitting on the board.
The proposed rule calls for the inclusion of a Medicare beneficiary “served by” or “serviced by” the ACO on the ACO’s governing board. While CHI does not object to Medicare beneficiary
representation in ACO governance, requiring a beneficiary to sit on the board is inappropriate. Governance of a complicated organization like an ACO should be left to those who have expertise in the many variables involved. We urge CMS to review the advisory board concept discussed in the proposed rule as an alternative to direct beneficiary involvement in the governing body.
CHI’s Patient and Family Advisory Councils (PFAC) are good examples of the use of advisory boards. Across the CHI network of hospitals and other facilities, our leaders are creating PFACs that foster collaboration with patients and families as partners to promote a person-centered culture of safety and quality and create a consistent forum for improvement of the overall patient experience. An ACO could use a similar type of advisory board to ensure the views and values of the Medicare beneficiary population are heard without expecting a beneficiary to have the expertise necessary to sit on the board of an ACO.
Additionally, CHI seeks clarification on the definition of “served by” or “serviced by” in this section of the proposed regulation. We are unsure how a governing board can include a Medicare beneficiary that is served by the ACO if the ACO does not know who is assigned to it until 12-18 months after the beginning of the contract start date. This inconsistency is another reason an ACO should not be
required to include a Medicare beneficiary on its governing board.
Recommendation: CMS should not require an ACO to include a Medicare beneficiary on its
governing board, but should instead allow use of an advisory panel to ensure that beneficiary needs are identified and addressed.
Contract Year Start Date
CMS requested comment on allowing a one-time, mid-year start date for ACOs seeking to join the Medicare Shared Savings Program in 2012. CHI welcomes a mid-year start date, especially given the very quick timeline CMS has set out for ACO formation. With the rigorous application requirements, necessary technology infrastructure and Federal Trade Commission and Department of Justice antitrust review required for an ACO to participate in the shared savings program, a mid-year start date is appropriate.
Track 1? Would an ACO need to wait 18-months before knowing which Medicare beneficiaries are assigned to it? Would the report-only quality metric requirement be valid for the first 6 months of the ACO’s contract, the first year, or the first 18 months? We ask CMS to allow for a mid-year start date in 2012 and to make clarifying changes to the proposed rule to accommodate it.
Recommendation: We encourage CMS to allow ACOs to join the Medicare Shared Savings Program on January 1, 2012, and July 1, 2012, with annual applications thereafter. We also urge CMS to provide clarification on the timing of various provisions of the rule for an ACO operating under a 3 ½ year agreement.
Screening for Integrity Issues
CMS is considering whether it should screen for integrity issues when assessing an ACO’s
application. CMS does not address corporate integrity agreements in its discussion of integrity issues, and CHI seeks clarification on this point.
Would a provider operating under a corporate integrity agreement be considered to have negative integrity issues for the purposes of Medicare Shared Savings Program participation? Would a corporate compliance agreement exclude a provider from the Medicare Shared Savings program? A provider operating under a corporate integrity agreement is committed to correcting any error it may have made in the past and putting in place new procedures to prevent any future concerns. These providers should not be excluded from participation in the Medicare Shared Savings Program.
Recommendation: If CMS chooses to screen for integrity issues during the ACO application process, a provider under a corporate integrity agreement should not be excluded from the Medicare Shared Savings Program.
Evidence-Based Medicine
CMS has proposed to allow an ACO the ability to select its own evidence-based practices sources. CHI agrees that this is the best approach. It is similar to the Joint Commission’s practice of providing specific guidelines but allowing each hospital to describe how it will meet the guidelines. By
following the same type of program, CMS will allow ACOs flexibility to keep up-to-date with the latest evidence-based practices.
Patient Engagement and Patient Participation
As an organization, CHI has a strong commitment to patient engagement and we agree with its inclusion in the ACO requirements in the proposed rule. CHI particularly is pleased to see CMS recognize alternative methods of patient engagement (e.g., telehealth) as a way to meet the patient engagement requirement for ACO participation in the Medicare Shared Savings Program.
Recommendation: CMS should maintain the patient engagement requirements, particularly the use of telehealth, as it completes the ACO and Medicare Shared Savings Program final rule.
Although CMS has recognized the importance of patient engagement by the ACO, it does not allow for patient participation in the shared savings itself. In addition, there are no incentives for patients to take ownership of their health or to work with the ACO providers to improve their care.
ACOs will be most effective at coordinating care, improving quality and lowering costs if
beneficiaries share in responsibility for their health. CMS should allow ACOs to offer financial or other incentives to beneficiaries for taking personal responsibility for their health (e.g., keeping follow-up visits, filling essential prescriptions on time, smoking cessation, etc.). We comment further on this issue in our letter to the Office of Inspector General regarding fraud and abuse waivers.
Recommendation: CMS should allow ACOs to incentivize Medicare beneficiaries to take personal responsibility for their health and engage in healthy behaviors.
Patient Centeredness Criteria and Experience-of-Care Surveys
While CHI agrees generally with the concept of measuring a beneficiary’s experience of care as part of the patient centeredness criteria, we have significant concerns with the implementation of this requirement. Specifically, we believe the Clinician and Group Consumer Assessment of Healthcare Providers and Systems (CG CAHPS) surveys are not ready for use in this function. CMS should only use a standardized, consistent, reliable tool for evaluating an ACO’s experience-of-care.
One main problem with the tool CMS proposes is the lack of standardization. There are multiple versions of the CG CAHPS tools in use across the country. Current tools include:
• Adult Primary recent 12 month experience, which provides practice level feedback (Two versions: a 4- and a 6-point scale)
• Adult specialty care recent visit experience, which provides practitioner level feedback for quality improvement (Two versions: a 4- and a 6-point scale)
• Child specialty care recent visit experience, which provides practitioner level feedback for quality improvement (Two versions: a 4- and a 6-point scale)
CHI asserts that for comparability and benchmarking purposes, all ACOs must use the same
experience-of-care tool. Additionally, ACOs should be required to use the tools in the same way. In essence, standardization is imperative. ACOs should use a standard sampling methodology to assure consistency across organizations of all sizes.
The lack of standardized use of CG CAHPS is not the only problem. CMS released the preliminary comparative data for the 12-month version of CG CAHPS in April. CMS recognized certain limitations of the data due to a small number of respondents and not all participating
vendors/organizations including all questions on the tool in the submitted data. This unreliability could lead to disastrous results for an ACO that will rely on experience-of-care data for part of their shared savings percentage.
Given these facts, CHI believes that with the exception of a few markets, the tools and data are too young and need more time before they can be used in an ACO setting. Because the tool will be used for quality measurements that lead directly to an ACO’s shared savings rate, any experience-of-care survey tool must be in the field for a full two years to discover any problems, and once selected, an ACO must have two years to adopt the tool to allow for the transition. Based on our experience with HCAHPS and ACAHPS, it took years to validate, clarify, and fine-tune before the questions being asked obtained the kind of information we wanted. Additionally, CMS should not allow ACOs to continue using existing experience tools (which are not standardized) if the beneficiary survey data is intended for quality scoring, comparability or payment determination.
Given that an ACO would include multiple providers (specialty and primary care, acute and non-acute), CMS will need to clearly define which “experience” the beneficiary survey is intended to cover. That decision will better identify the appropriate tool for use.
Until there is a tool that is capable of achieving those results, CMS should not make its use a requirement for participation the Medicare Shared Savings Program or as a determining factor in calculating ACO sharing rates.
Beneficiary Assignment – Retrospective vs. Prospective Assignment
The proposed rule calls for CMS to review year-long claims data for Medicare beneficiaries and to retrospectively assign them to an ACO based on the plurality of their primary care services. We believe prospective assignment provides greater opportunities for appropriate care coordination and management of chronic conditions based on the needs of Medicare beneficiaries. We also believe patients have an important role to play in their health care. Beneficiaries can best work with their providers if they know they are aligned to the ACO at the beginning of the performance period.
Recommendation: CMS should assign Medicare beneficiaries to an ACO prospectively to give the ACO the best chance of properly improving and coordinating care, and to give the beneficiary more control and power in their own health care decisions.
Beneficiary Assignment – Shortage of Physicians
The Affordable Care Act and the Medicare Shared Savings Program proposed rule allow for Medicare beneficiary assignment to an ACO based only on the care provided by a very narrow subset of
medical professionals: primary care physicians. The proposed rule relies on traditional, but not practical, thinking that physicians will dominate future care delivery models. CHI contends that the proposed rule and even the Affordable Care Act itself fail to recognize that there will not be enough primary care physicians to meet the needs of Medicare beneficiaries in the future. Health systems, private insurers, and medical providers will create new care delivery models that likely will not place primary care physicians at the center.
With the ACA and CMS demanding the use of primary care physicians over other care providers, the hands of innovative care delivery providers will be tied and new models of care will not likely
emerge. Even if there were enough physicians to meet future demand, we will never bend the cost curve by forcing Medicare beneficiaries into the healthcare system through the most expensive door.
Establishing a Benchmark Low-Cost Areas
CMS proposes to set an ACO’s benchmark based on local, historic Medicare claims expenditures. Setting a benchmark based on local, historic claims data will disadvantage areas that are low cost and high quality. For example, the actual per capita Medicare costs for a beneficiary in Iowa is $7,180, compared to $10,646 for a beneficiary in Florida, or an average cost of $9,103 per beneficiary
nationwide (based on 2008 data). Even if those costs are standardized and risk-adjusted to account for geographic differences and health status, Iowa beneficiaries’ care costs $6,892 per person, while the costs for a beneficiaries in Florida tops out at $8,722. CMS should create a benchmark that does not penalize areas that delivery high quality, cost-effective care.
CMS acknowledges in the proposed rule that setting a benchmark based on local, historic Medicare claims expenditures alone may unduly harm lower-cost Medicare regions and may inhibit their entry into the Medicare Shared Savings Program. We are concerned that under the proposed structure, the Medicare Shared Savings Program will reward areas with wasteful spending and provide few or no incentives for ACO formation in low-cost regions.
Recommendation: CMS should use a blend of local and national historic per beneficiary spending to set benchmarks under the Medicare Shared Saving program to avoid penalizing ACOs in low-cost areas.
Excluded Payments
CMS states in the proposed rule that it will exclude from benchmark calculations the additional payments to physicians for eRx, EHR, and PQRS. However, there is no mention of how it will treat the 10 percent add-on for primary care physicians that the Affordable Care Act requires from 2011 to 2015. Nor does CMS address low-cost county payments that the ACA provided for FY 2011 and 2012. Since CMS will be basing the benchmark calculation on the “most recently available claims data,” it is not unreasonable to assume the benchmark data will not include the primary care physician add-on or the low-cost county payments for ACOs beginning their three-year agreements in 2012.
Additionally, CMS notes that it does not have the authority to exclude inpatient value-based
purchasing reimbursements from the benchmark or performance year expenditure calculations. CHI is concerned that if a hospital participates in an ACO when the Medicare Shared Savings Program begins in 2012, its benchmark (likely CY 2008-2010) will not include the value-based purchasing reimbursements that may count against the hospital’s expenditures after the VBP program begins in FY 2013.
For hospitals participating in an ACO before inpatient value-based purchasing payments are well-established and reflected in the data used to set the benchmark, value-based payments should be excluded from the performance period expenditure calculations. To do otherwise would unfairly hinder an ACO’s savings potential if participating hospitals deliver high quality care under the inpatient value-based purchasing program.
Recommendation: CMS should not count value-based purchasing funds in performance year expenditures if these funds are not included in the benchmark. CMS should ensure that any
supplementary funds included or excluded from the benchmark and performance year expenditures are consistently applied across all years and all calculations.
Claim Run-Out Period
Timely data is essential to an ACO’s success in managing and coordinating patient care. By using a six-month claim run-out, CMS creates too great a data lag.
In previous comments to CMS in December 2010, CHI noted that one of the most effective ways a healthcare organization can improve quality and manage beneficiary care coordination is through robust data analysis. We commented that ACOs must have accurate and timely data in order to understand their patient population and to adjust internal processes accordingly. The proposed rule does not appropriately recognize that need.
In addition, if CMS uses a six-month claim run out, an ACO will not receive its first dollar of shared savings until at least 18-months after the start of agreement. Considering the high start-up costs and risks associated with creating an ACO, shortening the time between start-up and reimbursement is necessary.
Recommendation: Given the need for timely information and payment, CMS should use the three-month claims run-out period. Also, CMS must ensure its internal processes are in place to support accurate and rapid data turn-around before the first ACO contract period begins.
Shared Savings
CMS proposes a shared savings rate of 50 percent for ACOs participating in the one-sided model and a shared savings rate of 60 percent for ACOs participating in the two-sided model. Both percentages are based on the ACO’s total quality score which would need to be 100 percent to achieve the 50 or 60 percent maximum shared savings percentage. Lower quality scores would result in greatly reduced sharing opportunities. Considering the extraordinarily high quality standards and the high costs of starting and operating an ACO, we believe the shared savings percentages are far too low to allow any but the highest achieving ACOs to see any financial benefit. Indeed, the low shared savings rates are likely the single greatest barrier to ACO participation in the Medicare Shared Savings Program proposed rule.
CHI estimates that start-up costs for an ACO will be several million dollars higher than CMS estimates. Additionally, CMS fails to recognize the significant risk ACOs must bear outside of any shared losses. ACOs are at risk for the costs of forming an ACO, acquiring technology and putting the infrastructure in place, hiring personnel, and operating the ACO while seeing reduced revenues from lower hospital admissions and fewer services provided. CHI has performed financial modeling with the proposed shared savings information provided by CMS and determined that the incentives provided in both the one-sided and two-sided model are far too low to cover the costs and risks associated with starting and maintaining an ACO in the Medicare Shared Savings program. Given that the Physician Group Practice demonstration project maintained an 80 percent shared savings model, we were surprised to see such low shared savings percentages proposed for the Medicare Shared Savings Program. We believe some providers that wish to create an ACO and participate in the shared savings program will be unable to do so due to the high costs and low shared savings available.
Shared Losses under One-Sided Model
Under the proposed one-sided model, an ACO accepts no risk for losses for the first two-years of the agreement period between the ACO and CMS. The model requires the ACO to share in losses the third year.
However, the Affordable Care Act makes no mention of shared risk, only of shared savings. The participants and provider/suppliers that form an ACO already are taking substantial financial risk in incurring the costs of developing an ACO (e.g., infrastructure, technology, personnel). In addition, hospitals face likely reduction in hospital admissions and the reimbursements those generate. CHI believes that small, rural, or new organizations that lack the experience of mature, large, established entities may feel any additional risk beyond the start-up of the ACO is too much to bear. Many will choose not to participate at all rather than risk financial losses in the third year.
Recommendation: CHI urges CMS to create a one-sided model that is a true shared savings model and does not hold participants accountable for shared risk in the third year. ACOs that choose the one-sided model should share in savings alone for all three years of the agreement period.
Quality Measures
On the whole, the quality section of the proposed rule is confusing and contradictory. We urge CMS to clarify the proposed quality regulations. Especially considering that quality scores are so important to determining shared savings and losses, ACO participants and provider/suppliers need clear and accurate information before deciding whether to form an ACO. We offer the following specific concerns.
Timing
Recommendation: CMS should delay the requirement to report and measure all 65 quality measures and phase-in gradually the reporting and measuring, to account for the realities of provider practice and medical facility readiness. We urge CMS not to get ahead of the meaningful use rules and to be consistent with existing requirements for healthcare providers.
Transparency
CMS proposes to make the specifications for the proposed 65 quality measures available on its website prior to the start of the Shared Savings Program. CHI believes there needs to be a defined timeframe, preferably six months, for the specifications to be reviewed, planned for, and tested before they are required for use as a shared savings determinate.
Additionally, CMS is proposing to measure quality based on Medicare claims. For these measures that are claims-based, CMS must clarify the length of the reporting period and the start and end dates.
Recommendation: CMS should define a six-month time frame for posted quality measures to be reviewed and tested. Additionally, CMS should clarify the start dates and end dates for reported claims data.
Adding and Retiring Quality Measures
CMS does not offer any recommendations for adding or retiring quality measures in the proposed rule, but seeks comment. CHI asks CMS to reconsider any measure that is topped out and/or is no longer relevant due to changing evidence behind the practice. CHI also recommends that adding or retiring measures must only occur at the beginning of a calendar year. Making changes more
frequently than annually is not only difficult, but may make the results statistically insignificant due to differing measures across differing time frames.
When adding a new measure, CMS must take the needs of providers into account. Physician groups, hospitals, and other providers will need advanced notice for education and information dissemination regarding any changes to the quality metrics. Providers must be given reasonable notice of any changes, such as a six month adjustment period before metrics are added, retired or changed.
Group Practice Reporting Option
The provision of a built out, refined and upgraded Group Practice Reporting Option (GPRO) tool is appreciated, particularly since it appears to be designed to interface with various system components in differing types of practices (e.g. lab systems, EHR, etc.). CHI appreciates the idea, but in practice it will require either new interface development or the creation of a data extract tool that can load relevant data into the GPRO system. This is not insurmountable, but it adds complexity to the operational aspect of the ACO preparation time.
Recommendation: We encourage CMS to develop rapidly the enhanced interface for the GPRO tool with specifications needed for an ACO’s information technology staff. We request guidance on CMS’s expectations for data submission in the meantime.
All-or-Nothing Composite Measures
Use of all-or-nothing composite scores for certain quality measures in the Medicare Shared Savings Program is appropriate. CHI monitors its hospital core measures in a similar fashion. However, based on the specifications for each measure, we are able to determine whether a patient is eligible for a particular measure, and only include the measure for that patient if he or she is eligible for it. We do not see the value in calculating a rate for each measure where an all-or-nothing composite score is used.
Recommendation: CMS should allow ACOs to determine whether a patient is eligible for a particular part of the measures in calculating all-or-nothing measure. CMS should avoid the unnecessary step of calculating individual measure scores within all-or nothing composite measures.
Public Reporting
Recommendation: CHI requests clarification from CMS on the intended use of public performance data and urges CMS to delay implementing such public posting until all data is accurate and validated.
Other Clarifications
CHI has a number of other questions about the quality reporting measures that need clarification from CMS. We ask CMS to provide additional information and clarification on the following items:
1. There is some inconsistency between the preamble to the proposed rule and the proposed regulation language itself regarding how quality measures will be counted. Please clarify how many quality measures an ACO must meet in each domain, and how many domains must have scores to achieve shared savings. For example, does an ACO need to meet the minimum attainment score (30 percent or 30th percentile) for every single quality measure in every domain in order to be eligible for shared savings, or does the ACO need to meet a certain threshold within a single domain for that domain’s scores to count? If so, how many domains must have a score for an ACO to be eligible for shared savings? The proposed rule provides contradictory information.
2. Will the report-only quality score be available to ACOs in the first year of the Medicare Shared Savings Program (i.e., 2012 only), or the first year of the ACO’s contract period, regardless of when they start? Additionally, how will this affect a mid-year start date, if CMS decides to incorporate one into the first year of the Medicare Shared Savings Program? 3. How will ACOs be notified of changes to quality reporting in subsequent years? How long
will ACOs have to change their internal processes to accommodate any new quality measures? How will new quality measure be vetted?
4. If a patient receives care from a provider outside of the ACO, will the quality measures from that non-ACO experience or non-ACO procedures count toward the ACO’s quality metrics? In essence, does the quality measure occurring outside the ACO “track back” to the ACO?
Adding ACO Providers during Agreement Period
CMS states that during the three-year agreement, an ACO may remove, but not add, ACO participants (identified by TINs), and it may remove or add ACO providers/suppliers (identified by NPI and/or TIN). Also, CMS affirms that an ACO must maintain a 5,000 Medicare beneficiary minimum or be placed on a one-year corrective action plan if it falls below that number.
billing under method II forms an ACO with several independent physicians to reach the 5,000 beneficiary minimum, it could fall below that number if one physician moved out of the area. Rural areas often have a very difficult time attracting and retaining physicians and other practitioners. Since beneficiaries are assigned to an ACO based solely on primary care services performed by primary care physicians, it is not unreasonable to imagine a scenario in which a small, rural ACO loses a physician and cannot bring that ACO’s beneficiary count back up to 5,000 if it is not allowed to add new “participants” to the ACO. CHI is concerned that without some additional flexibility, rural groups may be precluded from forming an ACO due to the difficulty in attaining and maintaining a 5,000 beneficiary minimum.
One option may be the use of “slots” for formation of an ACO. In a rural area, if a certain number of ACO participants are necessary to meet the 5,000 beneficiary minimum, CMS can allow the ACO to fill the slot if a participant leaves the ACO before the contract expires. Doing so would maintain continuity for the ACO’s beneficiaries while holding true to the intent of the ACO regulations.
Recommendation: CHI urges CMS to consider alternatives that could accommodate the unique needs of ACOs serving rural communities, including allowing replacement of participants in the ACO.
Thank you for the opportunity to share our comments on the Medicare Shared Savings program and Accountable Care Organization proposed rule. If you would like more information, please contact Colleen Scanlon, Senior Vice President of Advocacy, at 303-383-2693. We look forward to seeing the final rule.
Sincerely,
Kevin E. Lofton
