June 05, 2020

CMS Innovation Center Announces Policies to Address COVID-19

On June 3, the Centers for Medicare & Medicaid Services’ (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) announced long-awaited policies to address the impact of COVID-19 on its ongoing models, as well as those that it hopes to launch in the upcoming months. The changes, as described in an overview by CMS Administrator Seema Verma, address model timelines as well as financial methodologies and quality reporting.

Changes to Financial Methodologies

The Innovation Center had the difficult task of crafting solutions that would account for both the high expenditures experienced by many hospitals and health systems and the decreased utilization of non-emergent health care services, including elective surgeries, routine specialty care and primary care. Moreover, the Innovation Center’s statutory authority mandates that its initiatives remain cost-savers or cost-neutral (with improved quality of care) throughout the duration of the model test.

To protect participants of several initiatives from unexpected spikes in Medicare expenditures, the Innovation Center will offer to remove certain COVID-19 care as participant expenditures and reduce — or even eliminate — downside risk for the 2020 performance year. However, to guard against unwarranted increases in savings and to comply with the statutory cost saving obligation, the protections against downside risk are paired with caps on the savings a participant may recognize for the performance year. Savings in both the Comprehensive ESRD Care Model and Next Generation ACO Model will be capped at 5% of gross savings for participants electing the protections. For the Innovation Center’s bundled payment models — including the Bundled Payments for Care Improvement Advanced, Comprehensive Care for Joint Replacement Model and the Oncology Care Model — participants have the option of eliminating upside and downside risk or continuing without change. In total, the Innovation Center revised the financial methodology for seven models.

Changes to Model Timelines

The Innovation Center also delayed the start of new initiatives scheduled to go live in the upcoming weeks and months, a move that was necessary as many providers have been giving full attention to immediate operational issues arising from COVID-19. Without these delays, the Innovation Center may have faced low participation in the new models, including its new flagship ACO model, the Direct Contracting Model. The delays push the start dates of three new models – Direct Contracting, Kidney Care Choices, Maternal Opioid Misuse Model, and the Primary Care First (Serious Illness Component) – until the spring or summer of 2021, raising the prospect that a change in political administration could further alter the direction of these models. In total, the Innovation Center delayed the start of six new models and extended the termination of five current initiatives.

Changes to Quality Reporting

The Innovation Center also introduced additional flexibilities in deadlines for participant quality reporting and the manner in which measures may be reported. However, by and large, the COVID-19 policies defer any decisions on how the Innovation Center will address the impact of quality measure reporting on financial performance. These changes will impact eight of the Innovation Center’s models.

While the June 3 announcement represents broad and necessary actions taken by the Innovation Center, important activities went unaddressed. For example, the Innovation Center remains silent on plans to move ahead with the Medicare Advantage VBID model for carving the hospice benefit into Medicare Advantage. In addition, the Innovation Center has not yet publicly advanced certain activities dictated by the President’s 2019 Executive Order, Protecting and Improving Medicare for Our Nation’s Seniors. Given this, it is likely we will soon be seeing more announcements from the Innovation Center.

Contact the authors for more information on these new policies and the models impacted

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