As Repeal Looms, Providers Worry About Value-Based Payments

As Repeal Looms, Providers Worry About Value-Based Payments

By Erin Mershon, CQ Roll Call, November 10, 2016

Republicans that will control the federal government are itching to repeal President Barack Obama's signature health care law. That effort, however, potentially could hamstring ongoing bipartisan efforts to transition the way Medicare pays doctors towards payments based on quality, not quantity.

Republicans who talk about repealing the health law (PL 111-148, PL 111-152) traditionally focus on the provisions of the legislation focused on health insurance, like the law's public exchanges and coverage regulations. But the health law also overhauled the way Medicare pays doctors in an effort to encourage efficiency and better control health care costs across the country.

Those efforts are far more popular among Republicans than the rest of the law. Indeed, a bipartisan package of further changes to Medicare (PL 114-10), or MACRA, which replaced a much-maligned physician payment formula, passed with plenty of bipartisan support last year. That law centers on rewarding doctors in so-called alternative payment models, like accountable care organizations, many of which were initially set forth in the health law.

But the uncertainty surrounding repeal has providers' groups and other policy experts worried. With repeal on the table, providers will be reluctant to enter into a new contract with the government to change the way it provides care, several provider groups and lobbyists predicted.

"I wouldn't be surprised if you see a retrenchment among health care players. They're saying, 'I'm not going to make these tremendous investments in this thing called value, given the uncertainty about where 20 million people's insurance coverage is.' If you have some stability in insurance market you can make these investments," said Chet Speed, vice president for public policy at the American Medical Group Association. "But now that that's up in the air, I think you see some people sort of slow down this transition to value and see how things shake out."

Fueling much of the concern is an ongoing, Republican-led effort on Capitol Hill to limit or entirely repeal the Center for Medicare and Medicaid Innovation, which was created by the health law to test ways to improve care and save money. Republicans see it as a representation of the Obama administration's overreach of executive authority, and calls to limit or abolish it had increased before Trump won the presidency.

CMMI is controversial in part because it has proposed a new way to pay for drugs that doctors provide in their offices, the so-called Part B drug model. That and other mandatory models for how hospitals are paid for complicated procedures like hip and knee replacements have angered pharmaceutical companies, hospitals and doctors groups.

The effort to repeal CMMI, which had been something of a nonstarter under Obama, may get a boost as President-elect Donald Trump lays out plans to repeal the health law. Until now, that effort had been stymied in part by Democratic opposition and in part because a federal budget expert determined CMMI would save $34 billion over a decade, making it expensive to eliminate.

"On the one hand, they may be for the same kinds of value-based purchasing, but are they really likely to stick with the current architecture, considering their concerns about the way that CMMI was developed?" asked Chip Kahn, president of the Federation of American Hospitals. "I don't know what they will be able to unroll in the ACA, so I think it's too early to say. There are specific areas where they probably have no policy problem with various reform provisions, but you know, just the discussion that Republicans had around CMMI ... illustrated a basic concern that they have with the architecture of the" health law.

Republicans on Capitol Hill caution that the party's most serious efforts to repeal the health law -- such as the reconciliation bill they passed through both chambers earlier this year -- don't repeal the delivery system reform and cost-cutting parts of the health law. One Senate Republican aide said it was premature to consider what parts of the law might be repealed before lawmakers could meet to discuss the issue.

Retain but Redirect the Center?

Several lobbyists also suggested that Republicans might eye the power available in CMMI and decide to keep it, now that a Republican holds the White House. That broad authority could be used to test Medicare premium support proposals or other GOP policy priorities that haven't gotten attention or support in the past.

It's also possible Republicans could limit the center's more controversial actions or roll back some of the mandatory payment models that have chafed industry groups, several experts said.

Even if they don't repeal major delivery system reform portions of the law, however, Republicans are unlikely to authorize the kind of funding that ongoing delivery system changes need, said Bob Berenson, an Urban Institute senior fellow who sits on an administration panel aimed at helping to implement the Medicare overhaul.

"They could do away with the Innovation Center and they could conceivably substitute an office for managing the [payment demonstrations]," Berenson said. "But MACRA requires a very active innovation center or its equivalent.  . . .  It suggests that lawmakers want a whole proliferation of models. How do you do that with a little office? If anything, I'm critical of CMMI right now because their evaluations are superficial; they need more resources to do this right. You can't do this on a shoestring out of the old Office of Research Development and Information with a small staff."