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Clinical Laboratories and Pathology Groups

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CMS Seeks ‘New Direction’ for its Innovation Center as the Agency Evaluates Current Value-Based Payment Models for Medicare Services, including Medical Laboratory Testing

Federal agency receives input on eight focus areas as it looks for ways to enable providers ‘to design and offer new approaches to delivering care’

Medical laboratories and anatomic pathology groups preparing for the transition from fee-for-service healthcare will want to keep a close eye on the Centers for Medicare and Medicaid Services (CMS). The federal agency’s administrator plans to set a “new direction” for CMS as it shifts to value-based reimbursement models for Medicare services that could impact clinical laboratory revenues.

In an informal Request for Information (RFI), the Center for Medicare and Medicaid Innovation (CMMI) sought feedback on a “new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.”

CMS to ‘Move Away’ from Engineering Healthcare ‘From Afar’

The agency requested input on eight focus areas:

1. Increased participation in Advanced Alternative Payment Models (APMs);

2. Consumer-directed care and market-based innovation models;

3. Physician specialty models;

4. Prescription drug models;

5. Medicare Advantage innovation models;

6. State-based and local innovation;

7. Mental and behavioral health models; and,

8. Program integrity.

Comments from healthcare providers, clinicians, states, payers, and stakeholders were accepted through November 20, 2017.

In a Wall Street Journal (WSJ) op-ed, CMS Administrator Seema Verma explained the agency’s process moving forward. “We will move away from the assumption that Washington can engineer a more efficient healthcare system from afar—that we should specify the processes healthcare providers are required to follow,” she wrote.

CMS Administrator Seema Verma (above) plans to lead the Center for Medicare and Medicaid Innovation “in a new direction” and may be signaling a willingness to give providers more flexibility with value-based care payment models for Medicare services. (Photo copyright: Healthcare Dive.)

The RFI states the new model design will follow six guiding principles:

1. Choice and competition in the market;

2. Provider choice and incentives;

3. Patient-centered care;

4. Benefit design and price transparency;

5. Transparent model design and evaluation; and,

6. Small scale testing.

Providers Need Freedom to Design New Approaches to Healthcare

Verma said CMS plans to review all Innovation Center models to determine “what is working and should continue, and what isn’t and shouldn’t.” She voiced concern that the complexity of some of the current models may have encouraged consolidation in the healthcare system, resulting in fewer choices for patients.

“We must shift away from a fee-for-service system that reimburses only on volume and move toward a system that holds providers accountable for outcomes and allows them to innovate,” Verma wrote in the WSJ op-ed. “Providers need the freedom to design and offer new approaches to delivering care. Our goal is to increase flexibility by providing more waivers from current requirements.”

Actual Progress of Value-based Healthcare ‘Herky-Jerky’

In its reporting on the recent CMS announcements, Healthcare DIVE suggested that the U.S. Department of Health and Human Services (HHS) “is looking to make some potentially major changes” in value-based payment models.

However, Neil Smiley, CEO of Loopback Analytics, which assists healthcare organizations with managing outcome-based care, believes the transition to value-based care may face stiffer headwinds under the new administration. He points to an August CMS proposal that canceled some mandatory bundled payment programs and scaled back others as an indication that healthcare transformation could be slowing.

“The pace at which CMS committed to rolling out value-based care is fundamentally different from the pace we’re currently seeing,” he told Health IT. “The progress toward value-based care, instead of this steady momentum they expected, is more of a herky-jerky fashion.”

Modify, Don’t Abandon Existing Payment Models, suggests HCTTF

The Health Care Transformation Task Force (HCTTF), a 42-member industry consortium, was among the stakeholders who responded to CMS’ RFI. In a 22-page letter, the task force reiterated its support for the healthcare system’s transformation to value-based payment and care delivery, while outlining areas for improvements. The group urged CMS to continue to develop new models while modifying, rather than abandoning, existing models that show promise and need time to achieve a lasting return.

“We would like CMS to continue support for promising models while balancing the current portfolio with new, innovative payment models,” Clare Wrobel, Director of Payment Reform Models at HCTTF, told Home Health Care News. “[But] it would be a mistake to discard current models that providers have already invested in and are showing real promise.”

Smiley, meanwhile, suggests clinical laboratory managers, pathologists, and other healthcare providers keep watch as healthcare transformation continues to evolve.

“The fee-for-service model, love it or hate it, is not dying. The organism has adapted,” he told Health IT. “For those that were aggressive early adopters of value-based care and really believed what they were hearing, and have gone fully after value-based care, some of them may feel a little exposed. If they go too hard too fast, they may suffer economically if they misjudge the pace at which this moves.”

—Andrea Downing Peck

Related Information:

Centers for Medicare and Medicaid Services: Innovation Center New Direction

Medicare and Medicaid Need Innovation

CMS Seeks ‘New Direction’ for Innovation Center

Comprehensive Care for Joint Replacement Payment Model

Task Force Calls on CMS to Encourage Alternative Payment Models

CMS Request for Information: Innovation Center New Direction

Task Force Urges CMS to Preserve Value Based Payment Models