Catalyzing Innovative Health System Transformation: An Opportunity Agenda for the Center for Medicare & Medicaid Innovation (2022)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

3 MULTI-PAYER ALIGNMENT ON VALUE-BASED CARE DISCUSSION HIGHLIGHTS During a meeting with experts on the implementation of multi- payer alignment on value-based care, various stakeholders, in- cluding the Center for Medicare & Medicaid Innovation (CMMI), shared their perspectives and engaged in a discussion on the criti- cal steps necessary for transformation. Below is a summary of the multi-stakeholder perspectives and the discussion. For more in- formation on the meeting’s content, please see the full Discussion Proceedings of this meeting in Appendix B. The meeting agenda and invited attendees are featured in Appendixes E and F. • The landscape of multi-payer alignment and value-based care. David Muhlestein, Leavitt Partners, noted that despite several promising multi-payer state-led initiatives under- way, such as Arkansas’s experience with a multi-payer bun- dled model or Vermont’s experience with the Accountable Care Organization model, there is substantial heterogeneity in the payment ecosystem’s goals, processes, and progress among payer quality measures, benchmarking, payments, reporting, and transparency. Additionally, patient, provider, purchaser, and payer relationships have become more com- plex and multi-directional, leading to stakeholders pursuing their individual interests without accounting for unintend- ed consequences, such as higher care costs or the continued dominance of fee-for-service health care. Furthermore, there is misalignment between payment approaches and benefit design and the complex delivery of clinical and pharmaceuti- cal interventions to treat diseases such as cancer. Therefore, CMMI could act as a central facilitator converge stakeholders 9 

10 | Catalyzing Innovative Health System Transformation around common goals to prioritize patient and beneficiary in- terests. It is also a priority for CMMI to increase the adoption of its alternative payment models through a comprehensive engagement strategy that involves Medicare, Medicaid, pri- vate payers, and other relevant stakeholders from the point of listening sessions and consultations toward model develop- ment, demonstrations, evaluation, and adoption. Moving for- ward, CMMI could first clarify its statutory authority to work with payers to co-develop models, discuss negotiated rates, and ensure alignment to drive increased adoption of value- based care models. CMMI could then work with other stake- holders around common goals to achieve greater care value and multi-payer alignment. Through these relationships, CMMI could also increase the adoption of CMS’ Core Quality Measures to track field progress, build stakeholder account- ability, and ensure public reporting and transparency. • Patients, families, and communities. Fee-for-service pay- ment arrangements incentivize the provision of high-cost, low-value care that neglects beneficiary interests. To tackle the economic dominance of fee-for-service payments in pro- vider and payer market share, CMMI could intervene in ten selected markets to increase the competitiveness of value- based care models. CMMI could also require providers to sub- mit payer mix information across multiple payers over a five- year time horizon. During the succeeding five years, providers would be assisted and encouraged by CMMI to move toward serving 60-80% of patients through value-based care mod- els. CMMI could also demonstrate the critical importance of meaningfully engaging stakeholders to codesign, dissemi- nate, and implement value-based care models. In this inter- vention, CMMI would convene and support multi-stakeholder community tables utilizing evidence-based and data-driven approaches. These groups would have the authority to ad- dress the impacts of major crises such as COVID-19, structural racism, adverse childhood experiences, and the opioid crisis while investing in evidence-based and health-related invest- ments and resources such as behavioral health services, af- fordable housing, social services, and criminal justice reform. PREPUBLICATION COPY - Uncorrected Proofs 

Multi-Payer Alignment on Value-Based Care Discussion Highlights | 11 • States. At the state level, the COVID-19 pandemic’s chal- lenges demonstrated the resilience and effectiveness of pro- viders in VBP arrangements. States like Pennsylvania lever- aged their convening and purchasing power to increase the adoption of value-based payment (VBP) models in Medicaid, state employee plans, public sector purchasing collabora- tive for unions, teachers, local governments, and certifying Qualified Health Plans in the state marketplace. Pennsylvania is also considering enhancing payment value and tightening cost controls by redefining the right value of services and pro- cedures. CMMI could help states by providing greater clarity around metrics and data collection and an implementation roadmap to achieve patient-centered equitable care. • State policy. Across a broader cross-section of states, a Na- tional Academy for State Health Policy (NASHP) focus group consisting of 400 state leaders found that while states are major purchasers, they need employers and the Centers for Medicare & Medicaid Services (CMS) to drive markets toward value-based care models. Additionally, successes in states such as Vermont, Maryland, and Pennsylvania could not be directly replicated due to the misalignment and variation of payers, providers, beneficiary populations, state govern- ments, and CMS efforts between states. States also require CMMI guidance on best practices in collaborating with pay- ers and employers, as well as future clarity on whether work- force-related COVID-19 regulatory flexibilities will remain. Furthermore, the federal government and CMMI could most meaningfully engage states by leveraging their current pri- orities of health equity, the social determinants of health, and behavioral health. Finally, CMMI could reduce the difficulty and requirements of model adoption by building upon the success of the Comprehensive Primary Care Plus model. • Payers. Payment structure was also cited as a cross-cutting requirement and driving factor for purchasing value-based health and health care. The current fee-for-service domi- nated landscape embeds providers with reputational, patient volume, financial and unit price advantages, thereby provid- ing little incentive for providers to transition toward value- PREPUBLICATION COPY - Uncorrected Proofs 

12 | Catalyzing Innovative Health System Transformation based care models. Furthermore, value-based care models have failed because unit price increases often outstrip savings generated from decreased care utilization. Attendees suggest- ed CMMI focus on improving their models and efforts to pro- vide more compelling incentives, payments, and performance relative to fee-for-service payment arrangements. Within the federal government, CMMI could amend regulations and pol- icies in Medicare Advantage plans, the U.S. Department of De- fense’s TriCare, the Affordable Care Act’s exchanges, and the Veteran’s Health Administration to shift purchasing of health care for federal employees toward value-based care models. In the broader field, CMMI could emphasize priorities such as value and health equity by reallocating capital toward invest- ments supporting health systems serving underserved com- munities and providers with a higher proportion of beneficia- ries covered by value-based care model. • Purchasers. Attendees also raised that in order to combat fee- for-service dominance, progress on payment reforms would require mandates, credible business threats, and contract changes that require value-based care. Attendees suggest- ed that CMMI work with external entities that can increase CMMI’s capacity by testing models at scale and collaborate with purchasers, groups, and community organizations that have achieved progress in aligning incentives and payment systems. CMMI could assess markets by readiness for val- ue-based care model implementation, provide personalized technical assistance, and share commitment and risk through requiring matching funds from market participants. They suggested CMMI set health outcome targets; utilize patient- reported outcome measures; require data stratification by race and ethnicity; and reauthorize the National Quality Improve- ment and Innovation Contractors with an updated Clinician Quality Improvement Contractor Clinician-Focused Task Or- der. Finally, attendees urged CMMI to track and report value- based care performance metrics by adapting the Health Value Index developed by the Purchaser Business Group on Health. PREPUBLICATION COPY - Uncorrected Proofs 

Multi-Payer Alignment on Value-Based Care Discussion Highlights | 13 OPEN DISCUSSION • The discussion began by acknowledging the work of the Healthcare Payment Learning and Action Network (HCP-LAN) to inform CMMI’s shift toward advancing national and regional primary care models, aligned economic supports, direct contracting, Primary Care First, population accountability, and health equity actions. • Attendees emphasized that current model incentives are weak, limiting adoption across providers, states, and payers. CMS could design value-based care models to reward behav- ioral change or form a coalition of employers, communities, providers, and states to prioritize value. As a solution to lim- ited state adoption of value-based care models, an attendee suggested that CMMI provide implementation assistance to states with large rural areas and lower patient volume. • Furthermore, models do not intervene significantly in the daily lives and realities of beneficiaries. To this end, the social drivers of health were suggested as a top priority for CMMI. For example, an individual with diabetes who is food insecure costs $4,413 USD more per member per year than a person with diabetes who is not food insecure, and that 38% of the geographic variation in Medicare spending is attributed to so- cial drivers in unadjusted models. APMs are currently insuf- ficient in meeting social needs because they incentivize, re- imburse, or support providers and practices to address these drivers by screening for social needs, navigating patients to services, or reimbursing community organizations that could meet these needs. Therefore, CMMI and relevant stakehold- ers, such as commercial payers and providers, could incen- tivize and leverage additional investments in community as- sets and social infrastructure to close resource gaps impacting health outcomes, such as low food access. • However, more evidence and case studies from the CMMI State Innovation Model grants are needed to inform social risk ad- justment and financial modeling methodologies. CMMI could collaborate with the CMS Office of the Actuary to collect data needed to clarify financial modeling methodologies. As an ex- PREPUBLICATION COPY - Uncorrected Proofs 

14 | Catalyzing Innovative Health System Transformation ample of the social drivers of health implemented in practice, CMMI could utilize North Carolina’s multi-stakeholder social drivers of health infrastructure, navigation, and payment pi- lot. • Despite the importance of CMMI’s ultimate goals for health systems transformation, it cannot resolve every issue. Instead, the focus could be on defining a core set of health measures, reducing the total cost of care, and enhancing patient health and health care experiences with a focus on states where val- ue-based care models have had limited impact due to their rural geographies, lower patient volume, and less competitive marketplaces. • CMMI could also provide guidance and operational clarity on the competencies and requirements to implement value- based care models successfully. As a complement to care value and quality, CMMI guidance on common data elements, op- erational requirements, and data for community health infor- mation exchanges would help clarify regional differences in cost benchmarking and engagement with commercial payers and employers. • Additionally, CMMI could further engage with employers who are willing to experiment with value-based care models be- cause of the impacts of the COVID-19 pandemic and their de- mand for real-time health care access with digital options and data responsiveness. Furthermore, rural communities have also experienced the damaging impact of fee-for-service health care. To address this issue, employers can work with CMMI to leverage their significant market size, leadership, and infrastructure to shift regions toward value-based care models and practices. • In addition to major private and state employers, multi-payer alignment on value-based care can be achieved at the state level. In this context, state governments can utilize their con- vening and purchasing power to align Medicaid, Medicare, public employees, private payers, and public exchanges. This convening power could first rally stakeholders, resources, and the workforce in negotiating more attractive reimbursement rates for value-based care, achieving common performance PREPUBLICATION COPY - Uncorrected Proofs 

Multi-Payer Alignment on Value-Based Care Discussion Highlights | 15 indicators and benchmarks of provider performance and ben- eficiary health outcomes, and optimizing resources toward improved care quality and population health outcomes. The ultimate goal, attendees agreed, would be to center and prior- itize beneficiary health through improving health outcomes, promoting equity, and reducing the total cost of care. PREPUBLICATION COPY - Uncorrected Proofs