How Should CMS Reward Performance?

Thursday, July 28, 2016 | Larry Sobal

 

In a recent blog post, I highlighted the history of CMS’s drastic reduction in reimbursements and disruption of the cardiology practice community—during a period when it was a key contributor to unprecedented improvements in cardiovascular patient outcomes.

I received a number of comments suggesting that I offer some solutions on how CMS should reward quality, or value, for that matter. You asked for my opinion, so here it is.

Let’s start with some fundamentals. First, the Affordable Care Act references the word “value” more than 200 times. I think it's the most over-used and misused word in health care. I ranted about this in a previous blog post. Since we can't define or quantify value, let's stop using the word altogether and build a reward model around something more objective.

Second, let's think about how an incentive program should be based. Right now, there's a combination of the carrot and the stick approach. There is little, if any, correlating evidence that linking financial rewards to cost-effective management of patient care or reducing adverse outcomes has produced the desired results. I’ve always found that rather than designing an incentive system and then hoping that it leads to different behaviors, it works better to first identify the desired behaviors and then design an incentive model that rewards those behaviors. It seems intuitive to do it this way (at least to me), but I often think this step is ignored.

There is no way that physicians and hospital leaders can wake up every day and have a clue on what to do differently to meet all the confusing, and sometimes conflicting, expectations of these programs

Where would I start? How about assembling the right team of people to identify ideal future behaviors? Since we’re talking CMS here, I would first scrap all the current acronym programs and start from scratch. This means PQRS, MU, IQR, HVBP, HRRP, HAC, MSSP, Next Gen and, especially MACRA, would all be gone. What? You didn’t know what all of those acronyms stand for? That is part of the problem and why we have ultra-complex compensation designs, poor alignment of goals and lack of clearly defined, actionable measures that are leading to failed efforts and unintended consequences. There’s no way that physicians and hospital leaders can wake up every day and have a clue on what to do differently to meet all the confusing, and sometimes conflicting, expectations of these programs. I know I couldn’t. 

What should we replace it with? I propose setting some ground rules:

1. Any program with an incentive linked to it must first be validated, or meaningful enough for an incentive program. That means the issue should have significant outcome or cost implications if effective change is achieved. If we aren’t sure, then we use pilot experiments to test the hypothesis in live environments and reward people for participating in the pilots.

2. It must be clearly measureable. Care must be taken to choose incentive initiatives that have as little subjectivity as possible—with easy-to-capture data needed to quantify performance and change. If it takes significant manual data extraction, or complex and lengthy instructions on how to capture similar data across multiple organizations, then we aren’t choosing the right issue to incentivize. 

3. It must be simple. If the incentive program can’t be explained with an image or brief description, then it is too complex to tackle.

4. Impacting the measure of success must clearly be in the hands of providers being incentivized. If they can’t control the outcome (as is the case with so many of the multifaceted incentives today), why try? I know from personal experience working with many physicians that they simply ignore the incentives because they don’t feel they control the final metric result. I can’t blame them.

5. The measures and methodologies must be determined through the input of the people who will be subjected to them. Too often, when CMS does ask the opinion of a representative group, I’m not convinced that group is the right one. The AMA, AHA, and others, are not necessarily the best organizations to ask.

6. Levels of incentives must be introduced and increased gradually, taking into account provider and practice readiness. We have to ask ourselves the following question: Is the intent to roll out programs for the sake of having incentive programs, or are we interested in achieving successful programs where the impacted individuals and organizations are engaged, respected, and feel that they have a legitimate chance to be successful?

With these six ground rules, we have the basis to evaluate any proposed program to determine if it passes the reasonableness test for all six. If not, it needs to the re-thought and adjusted.

Ask yourself if any of the CMS-driven incentive models today meet all six of these criteria. I can’t think of a single one, hence my earlier proposal to scrap the whole lot and start over. That’s not to say that some could not be re-evaluated and modified to eventually meet all six; it’s just that they are all a far cry from it today.

Can you have an ACO that complies with the ground rules? Absolutely, although it would take some creative thinking to reformulate its structure and incentives. Would providers be more excited about them if they met the six ground rules? I have to believe, yes. There’s a reason why organizations dropped out of Pioneer and are already dropping out of Next Gen. There’s a reason why so many practices did not attest to Meaningful Use Stage 2. Complexity and a feeling of helplessness is a demotivator.

In a nutshell, consider my proposal one where we only pay a reward for the behaviors we want to achieve because they are worth incentivizing. We don’t penalize people unless there is truly negligent intent, and even that needs to be studied closely to make sure that there was both a lack of knowledge and poor intent. Otherwise, we let providers understand the opportunity for increased rewards, but let them choose how quickly they think they can get there and to what degree they want to engage. Eventually, there will be a separation between those who are motivated, engaged, and willing to make positive change to earn the rewards—and those who are not.

If you can think of a better way, please have at it in your comments.

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Larry Sobal is Executive Vice President of Business Development at MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and insurance. As part of his current role, Larry consults, writes and presents on topics relevant to transforming physician practices and health systems.

 

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