CMS Signals the Use of Mandatory Payment Models if Voluntary Models Don’t Get Enough Participation

CMS recently said it will only use mandatory payment models when the agency feels it cannot get enough participation or have an adverse selection for voluntary models, according to a Center for Medicare and Medicaid Innovation staffer. The remarks from deputy director Amy Bossano during the National Association of ACOs spring conference in Baltimore came a day after CMS Administrator Seema Verma hinted that some upcoming models will be mandatory.

Comments from Administrator

CMS Administrator Seema Verma signaled that the Trump administration has its eye on rolling out more mandatory payment models. The administration had been seen as preferring voluntary payment models under former Health and Human Services Secretary Thomas Price, MD, who resigned in 2017. But the tone seems to have shifted under current HHS Secretary Alex Azar, who has repeatedly voiced support for mandatory models.

Verma mentioned the forthcoming mandatory models in opening remarks to the National Association of Accountable Care Organizations conference in Baltimore. “Looking forward, you can expect that some of the models we have under development will be mandatory,” Verma said in her prepared remarks.

“Looking forward, you can expect that some of the models we have under development will be mandatory.  One reason for mandatory models is that selection effects can be significant in voluntary models.  Selection effects happen when only the providers who would benefit financially from a model choose to participate, thereby reducing the amount of savings that the model can generate.  Requiring participation also helps us understand the impact of our models on a variety of provider types, so the data resulting from the model will be more broadly representative,” explained Verma.

But as reported, CMMI’s Bossano said during a town hall that the agency doesn’t have a “formula per se” to determine if a model would be mandatory.

“We will use it very judiciously,” she said regarding making models mandatory. A key factor will be whether the Innovation Center would have low participation in the model if it was voluntary, Bossano said.

Bossano further noted that the Innovation Center will lay out in rulemaking how future mandatory payment models will work with voluntary ones, noting it will be a case-by-case basis. “We would lay out in our rulemaking to be clear how it is going to work,” she added.

Recent HHS Models

Recently, HHS launched two new voluntary payment models targeted at primary care physicians. One of the models targets small primary care practices and the other focuses on larger practices and health systems. The Primary Care First (PCF) model would give clinicians a monthly payment to cover all Medicare costs and give higher payments to doctors that specialize in care for high-need patients, including those chronic conditions. The agency also launched a payment model called Direct Contracting for larger healthcare systems, including ACOs. The model offers two options: one where providers assume 50% of the risk and another where they take on full risk.