Dr. Richard Gilfillan and Dr. Donald Berwick recently authored a two-part article appearing in Health Affairs Forefront voicing criticism of the Medicare Advantage (MA) program and the Center for Medicare and Medicaid Innovation’s Global and Professional Direct Contracting (GPDC) pilot program. The authors cite their belief that MA is beset with cost and coding abuses committed by participating physicians, organizations, and health plans and that GPDC has the potential to introduce these same abuses into fee-for-service (FFS) Medicare. They suggest that the Centers for Medicare and Medicaid Services (CMS) replace the risk-scoring system based on hierarchical condition categories in two years, feel Medicare Advantage is “fundamentally flawed,” and recommend stopping the GPDC program entirely.
America’s Physician Groups (APG) is a national association representing more than 335 physician groups; with approximately 170,000 physicians providing care to nearly 90 million patients. Our members provide care to approximately one quarter of the nation’s MA patients. We believe we must move from the antiquated, dysfunctional fee-for-service reimbursement system to a clinically integrated, value-based health care system where physician groups are accountable for the coordination, cost, and quality of patient care.
While we have tremendous respect for both Dr. Gilfillan and Dr. Berwick, their decades of experience, and what they have achieved and contributed on behalf of the movement toward value-based care, we believe that their outlook on both the MA and GPDC programs is misguided and based on inaccurate arguments and would serve to retard our quest for better care for Medicare beneficiaries. We share their view that risk-adjustment reform is needed, but we are providing the following evidence to set the record straight on multiple inaccuracies and omissions in their article.
The "Perverse" Medicare Advantage Business Model And Marketplace
Drs. Gilfillan and Berwick claim that recent acquisitions of physician groups that represent Medicare beneficiaries are driven by “an arbitrage game” in which CMS consistently overpays MA Plans with no demonstratable clinical benefit to patients. Despite this claim, data collected by researchers prove differently. According to a Milliman report commissioned by Better Medicare Alliance’s (BMA) Center for Innovation in Medicare Advantage, the federal government pays less and receives more for its dollar under MA than FFS Medicare.
First, the Milliman study found that that each dollar spent by the federal government on MA provides beneficiaries with additional benefits and lower cost sharing than beneficiaries enrolled in traditional Medicare receive. MA beneficiaries also spend less in out-of-pocket costs for Medicare-covered services. The study estimated that the value of reduced cost sharing and additional benefits totals $124 per member per month (PMPM), with $48 in reductions in cost sharing for Medicare-covered services and $76 in additional benefits not covered by traditional Medicare. The total amount of additional benefits for all 22 million MA beneficiaries equals $32.5 billion.
The Milliman report also confirmed that that the coordinated care model that serves as the basis of the MA program works to prevent the administration of unnecessary services and thus allows MA plans to provide the same services as traditional Medicare at lower costs. This coordinated care structure within MA allows federal dollars to be more cost effective as MA plans provide Medicare-covered benefits for less than what the same benefits cost under FFS Medicare. For every dollar of cost for Medicare-covered services, the government’s contribution covers 89.5 cents for MA beneficiaries but only 85.2 cents for FFS Medicare beneficiaries; MA and FFS beneficiaries pay for the remaining 10.5 cents and 14.8 cents, respectively. These data fly in the face of the claims made by Gilfillan and Berwick that CMS overpays MA plans consistently without any demonstrable clinical benefit to patients.
The Magnitude Of MA Overpayments
Drs. Gilfillan and Berwick attacks on MA and HCC coding seem to reflect a lack of appreciation for the indispensable role that risk adjustment plays in MA compensation. Risk adjustment is essential in capitated models because it estimates a beneficiary’s future health care costs and aligns compensation with acuity and severity of disease. As our members have proven, risk adjustment encourages the enrollment of the sickest and most socioeconomically disadvantaged patients; it is widely used in MA and the Medicare Shared Savings Program (MSSP) to appropriately adjust quality metrics, expenditure benchmarks, and cost metrics, thus allowing for a more precise measurement of performance.
Risk adjustment data also demonstrates how many more beneficiaries within vulnerable populations are covered under MA. An analysis conducted by ATI Advisory for the BMA found that MA beneficiaries are proportionally lower income than beneficiaries in FFS Medicare. In 2018, more than 40 percent of beneficiaries whose income was under 200 percent of the Federal Poverty Level (FPL) (or $24,280) were enrolled in Medicare Advantage, compared with 27 percent of beneficiaries whose income was over 400 percent of the FPL. Almost 53 percent of MA beneficiaries lived on an income below 200 percent of the FPL in 2018, while just over 39 percent of Traditional FFS Medicare beneficiaries had incomes that low; in contrast, less than a quarter of Medicare Advantage beneficiaries had incomes above 400 percent of FPL, compared to more than one third of traditional FFS Medicare beneficiaries.
A separate ATI Advisory analysis found that MA beneficiaries also proportionally possess higher rates of social risk factors than beneficiaries in FFS Medicare. This includes increased likelihood of being food insecure, of speaking English as a second language or not speaking English at all, of having lower education levels, and renting a home rather than owning, all of which are more likely to have a negative impact on health.
Drs. Gilfillan and Berwick pay almost no attention to quality. They fail to mention the number of MA beneficiaries who are also part of vulnerable populations, as cited in the study above. Capitated contracting allows for innovation and encourages new entrants and new populations to decrease health disparities while empowering physician groups to take more risk and develop newer models of care for the FFS Medicare population. Years ago, before risk adjustment, health plans avoided sick patients. Now, with the incentives provided by risk adjustment, physician groups are seeking out the sickest and most needy patients. This new reality is not acknowledged by Gilfillan and Berwick, but it should not be lightly dismissed.
MA also has a built-in mechanism that incentivizes plans to account for their performance when it comes to providing quality care. The MA Stars Program contains over 40 categories that measures quality and provides a star-based rating system to plans based on their performance in said categories as well as a five percent payment increase for most plans if they achieve a rating of four stars or greater. As the Stars Program has become entrenched within MA and plans have sought to become achieve the four star or better status, this attention toward quality has resulted in higher quality care for all patients as a byproduct.
Our members continue to be committed to reducing health disparities by addressing variables in underserved communities using creative and innovations methods. One substantial example of this effort has been APG member ChenMed, which has consistently implemented the following programs aimed at better treating these communities across their more than 100 clinical locations:
- “Love Calls: The “Love Calls” program made sure there were a minimum threshold of touchpoints with patients during the height of the pandemic and could assess both social and medical issues, as well as remind them to call their providers for anything.”
- “COVID 19 Calls: Providers proactively reached out to patients to help them navigate COVID risks, including sharing facts and advice on preventive measures (e.g., hygiene, masking, social distancing, etc.) and vaccinations (e.g., the evidence, benefits, safety, procedure, and availability).”
- “Post-Vax Follow-ups: A proactive effort to check in with recently vaccinated patients to ensure they were OK, understood any side effects they may be experiencing, and understood the importance of coming back for the second dose.”
Direct Contracting
Drs. Gilfillan and Berwick also claimed in part two of their article that CMMI created the Direct Contracting model as a vehicle for privatizing traditional Medicare and that coding abuses in MA will migrate into the Direct Contracting program. Curiously, the Forefront authors seem to take the view that Direct Contracting entities (DCEs) are not accountable care organizations (ACOs). They regard claims that the Direct Contracting program could do more to control costs than ACOs as unfounded, even as they also admit that actual savings from ACOs have been “modest” and “the level of ACO success controversial.”
The reality is that DCEs are the most advanced form of ACOs being offered by CMS and/or CMMI and represent the highest form of the accountable care we all are convinced the nation needs. The Direct Contracting model is the next iteration of the ACO framework, helping primary care providers transition to performance-based risk contracting while delivering better value to patients through the coordination of care across multiple settings and improved care management for patients suffering from chronic disease. As Drs. Gilfillan and Berwick stated, GPDC DCEs differ from ACOs in that participants can select varying degrees of capitation, including full capitation, whereas earlier ACO models did not sufficiently drive providers toward the acceptance of risk. DCEs build upon the framework of earlier ACO models, from 2012 Pioneer ACOs to 2016 Next Generation ACOs, and represent the evolutionary path of permitting physicians to manage populations and accept accountability for quality and outcomes.
In fact, many of the potential innovations for MSSP recommended by Drs. Gilfillan and Berwick in their materials on this subject are already a part of the direct contracting model, such as nonskilled Home Health, transportation benefits for beneficiaries, meals as medicine, and enhanced behavioral health benefits. DCEs should be limited to physician groups. How those groups are financed, and who might own them, should be irrelevant if we have a level playing field and measure their performance consistently and fairly. We would also like to note that many DCEs are developing programs in low-income areas and focusing on reducing health disparities.
While we support the MSSP ACO program—over 60 of our members are MSSP ACOs and are working hard to graduate to highest levels of risk— We fervently believe that introducing capitation can provide the program much needed improvement that will increase its long-term viability. In addition to strengthening these models and programs, capitation incents outreach to vulnerable patient populations that will allow the system to address social determinants of health in a way FFS Medicare currently does not.
Summing Up
Neither MA nor direct contracting are without imperfections, but in addressing areas where these programs can be improved it is important that we don’t eliminate them. Both can and do serve as learning grounds and launchpads used by groups moving into value-based care, and they do so far more effectively than does MSSP ACO. If MA and direct contracting are impaired or eliminated as Gilfillan and Berwick appear to advocate, the value movement may well collapse. In solving these imperfections, it is imperative that we remain clear eyed about potential unintended consequences.
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February 07, 2022 at 08:23PM
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The Important Roles Of Medicare Advantage And Direct Contracting: A Response To Gilfillan And Berwick - Health Affairs
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