Newtown, CT – October 21, 2016
As physicians actively seek alternative payment models to qualify for MIPS exemption, our new Case Study offers a model – In collaboration with the NEJM Catalyst we published a Case Study on the results of the first year of a comprehensive maternity bundled payment program. The program was launched by Community Health Choice, a Houston County Medicaid Managed Care plan that pays for half the babies born in the county. The full version of the Case Study is published on our web site for those who want to dig into the weeds, but the NEJM Catalyst version offers a comprehensive summary. The upshot is that it worked and yielded some important lessons. It worked because one of the primary incentives, which was to create financial gains or losses based on decreases or increases in avoidable C-sections, panned out. But that’s not all. An important lesson is that nursery level coding for newborns is highly subjective and unreliable. That’s a big problem because it means you can’t really use nursery level as a proxy for the severity of newborns. And then there’s the added conundrum that if you do adjust based on nursery level, which should be primarily assigned as a result of baby birth weight, you create a potentially perverse incentive to have low birth weight babies. The solution, however, is pretty simple: stop loss caps on each case. Overall, having a comprehensive maternity bundle with individual case stop loss creates the incentive to do the best job possible managing the care of mother and child. Said another way, the payment model takes away the current bad incentives to perform more C-sections and care for more low birth weight babies. That’s a model worth replicating.
What this means to you – In mid-summer the Health Care Payment Learning and Action Network released a report on clinical episode payment models in which it describes the benefits of a comprehensive maternity bundle, and those benefits have so far proven to be true. Some payers and purchasers have claimed that such a bundle is too complex and a bridge too far, and yet a relatively small regional Medicaid health plan was able to pull it off. What we’ve found is that, more often that not, those who claim something is too complex don’t actually think it is, but say it because they can’t figure out how to get it done, and don’t want to appear less competent than others. Put simply, they put their own needs and image in front of the essentially important task of deploying the right alternative payment model. We’ve said before that any payer or purchaser can implement even the most sophisticated models as long as they’re willing to put in the effort, accept that there will be mid-course corrections, and maintain a high degree of flexibility. We’re all still learning what will work and our Case Study provides some insights in one area of care, but it’s clear there will be more and the models will evolve. Physicians that were despondent after the initial release of the MACRA/MIPS rule will be somewhat relieved by the final rule, because in it CMS acknowledges the importance of being more flexible and open to alternatives. Our Case Study shows that sophisticated APMs, that create the right incentives, can be designed and implemented, even by small payers. As such, there’s no reason why CMS shouldn’t be able to do the same.