Are we seeing a kinder, gentler CMS?

Thursday, July 13, 2017 | Larry Sobal

Are we seeing a kinder, gentler CMS?



I admit that in this blog I have sometimes been an outspoken critic of the policy decisions made by the Centers for Medicare & Medicaid Services (CMS). Examples are: Where CMS payment for quality failed, Unintended consequences of public policy on health care, and What do CMS hospital star ratings really tell us? However, I have also lauded a few CMS initiatives, such as CMS efforts in primary care and The Million Hearts program. So, I’d like to think I am objective and recognize both good and bad decisions from this massive federal agency that provides health care coverage for over 100 million people.

It is in that spirit that I suggest we may be seeing a kinder and gentler CMS these days given some of the recent decisions that have come out of Washington. Let me highlight some of those and you can decide if you agree.

First, I should point out that if we are, in fact, seeing a more provider-friendly approach by CMS, it is likely because of its new leadership. As a reminder, President Trump named two new leaders to oversee CMS and dictate its health policies: Dr. Tom Price as Secretary of the Department of Health and Human Services and Ms. Seema Verma as Administrator of CMS. Since both Price and Verma have effectively been in place since the Presidential inauguration on January 21st, they are roughly six months into their roles. Let’s review some of the decisions they made (or at least strongly influenced) that I feel are positive and good for health care.

  1. Although you could argue that the previous CMS leadership was the genesis behind this (given its December 20, 2016 announcement), the Medicare ACO Track 1+ Model offers more providers (especially smaller practices), as well as hospitals (including small, rural hospitals), to advance to performance-based risk at a more rapid pace in a friendlier model. That is because Track 1+ will have more limited downside risk than the current Medicare ACO shared savings options of Track 2 or 3. The Track 1+ Model will also qualify as an Advanced Alternative Payment Model (APM) under MACRA’s Quality Payment Program (QPP), giving an estimated additional 70,000 physicians the opportunity to qualify for the 5 percent lump sum incentive payment beginning in 2018. The reason I offer some credit to Price and Verma is that they could have easily slowed or stopped the plan.
  1. On April 3rd of this year, CMS announced its proposed changes to the Medicare Advantage (MA) and Part D Star rating system. While most of you may not be interested in the details to this change, what is notable is that the changes were made in response to public comments and included a Request for Information (RFI) to welcome feedback on MA and Part D changes. In the words of CMS, “We wish to use transparency, flexibility, program simplification and innovation to transform the MA and Part D programs.” To me, that signals a CMS that is trying to listen, learn and make meaningful adjustments.
If we are, in fact, seeing a more provider-friendly approach by CMS, it is likely because of its new leadership.
  1. On May 23rd, CMS announced that it was delaying the expansion of its existing Episode Payment Model (aka EPMs or bundles) payment programs (and the start of new ones) until January 2018. Since the original start date was slated to be July 1, 2017, this 6-month delay reflects that CMS listened to public comments on the interim rule saying that more time was needed to prepare for the payment bundles. The existing joint replacement demonstration, which started April 1, 2016, requires about 800 hospitals to be at risk for 90-day post discharge time periods through bundled payments for hip and knee replacement surgery. The EPMs, affecting roughly 1,200 hospitals, now start on January 1, 2018 in 98 selected Metropolitan Statistical Areas and include the Advancing Care Coordination through these EPMs, and the Cardiac Rehabilitation Incentive Payment Model, an adjunct to the EPMs. The EPMs consist of bundled payments for episodes of care involving acute myocardial infarction (AMI), coronary artery bypass grafts (CABG), and surgical hip and femur fracture treatment.
  1. On June 8, CMS issued a Request for Information seeking recommendations and input from the public on how to create a more flexible, streamlined approach to the regulatory structure of the individual and small group markets who access health care through the exchanges. CMS stated its goal through this process is to identify and eliminate or change regulations that are outdated, unnecessary, or ineffective; impose costs that exceed benefits; or create inconsistencies that otherwise interfere with regulatory reform initiatives and policies. Seema Verma explained “We are looking for valuable feedback on how to change existing regulations in ways that put patients first, promote greater consumer choice, enhance affordability and return more control over health care to the States. Through this step, CMS is asking consumers to send us innovative ideas that will help stabilize and strengthen the individual and small group health insurance markets.”
  1. On June 20, CMS released its proposed 2018 regulatory updates for MACRA’s Quality Payment Program. This proposed rule includes several wins for small physician practices, and physicians in general, as CMS appears to be making an effort to reduce the regulatory burdens MACRA places on physicians. Among the most notable proposals in the proposed rule are:
  • Use of a 2015 certified EHR is now optional for MIPS participants in 2018
  • An increase in the low-volume threshold exclusion, as a result, 63% of all Medicare clinicians will be exempt from MIPS in 2018
  • Cost will remain 0% of the overall MIPS score in 2018
  • Providers can participate in MIPS as individuals, groups, or virtual groups
  • Adding bonus points to the MIPS scoring methodology for small practices
  • The weights of the measures that contribute to the MIPS composite score were adjusted and the threshold to participate without receiving a penalty remains low
  • The amount of Medicare Part A and B revenue that must be at risk to qualify as an advanced Alternative Payment Model was extended for two years

There are two potentially imminent announcements from CMS that may convince me ever further that it is truly turning a corner to being a federal agency with a friendlier disposition. The first would be if CMS decides to delay the planned January 1, 2018 requirement for physicians to document that they are following appropriate use criteria (AUC) for outpatient medical imaging orders by using clinical decision support (CDS) software documentation. This will affect advanced outpatient imaging for computed tomography (CT), magnetic resonance imaging (MRI) and nuclear imaging (PET and SPECT). I, along with many physicians, professional societies and health care organizations, feel strongly that the timing of such a requirement needs to be delayed at least one year to allow physicians, who are still burdened with MACRA, to reasonably prepare, and for software vendors to take the time to test and validate their CDS tools.

The second would be if CMS launches a new version of the Bundled Payments for Care Improvement (BPCI) initiative. Currently BPCI is comprised of four broadly defined models of care that link payments for multiple services beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. With the current BPCI scheduled to end in September 2018, a new version would be a nice voluntary complement to the mandatory EPM program and also signal an open-mindedness and flexibility from CMS that has not always been seen in the past. That is, of course, assuming that CMS fixes some of the flaws that were evident in BPCI version 1.

The above actions taken to date, and hopefully two more key decisions (one to delay AUC and one to launch BPCI version 2.0), would suggest that we may have entered into the realm of a kinder, gentler and more open-minded CMS. Only time will tell if these examples represent a true change in direction for CMS to be more physician and hospital friendly. I’m cautiously optimistic – how about you?


Illustration: Lee Sauer


Larry SobalLarry Sobal is Executive Vice President and a Senior Consultant at MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and health insurance. Larry consults, writes and presents on topics relevant to transforming physician practices and health systems. His weekly blog post comes out on Thursdays and can be accessed at


About the Author
Larry Sobal

Larry Sobal, MBA, MHA, is CEO of a yet-to-be-named cardiology practice which is transitioning from employment to an independent physician group effective January 1, 2019. He has a 37-year background as a senior executive in physician practices, consulting, medical group leadership, hospital leadership and health insurance.

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