U.S. GOVERNMENT PUBLISHING OFFICE

28–263 PDF WASHINGTON : 2018

MACRA AND ALTERNATIVE PAYMENT MODELS: 

DEVELOPING OPTIONS FOR VALUE-BASED CARE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

NOVEMBER 8, 2017 

Serial No. 115–75 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

JEFF DUNCAN, South Carolina 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

SUBCOMMITTEE ON HEALTH

MICHAEL C. BURGESS, Texas 

Chairman 

BRETT GUTHRIE, Kentucky 

Vice Chairman 

JOE BARTON, Texas 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MARSHA BLACKBURN, Tennessee 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GREG WALDEN, Oregon (ex officio) 

GENE GREEN, Texas 

Ranking Member 

ELIOT L. ENGEL, New York 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

BEN RAY LUJA ́ N, New Mexico 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

ANNA G. ESHOO, California 

DIANA DEGETTE, Colorado 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 4 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 6 

Prepared statement .......................................................................................... 7 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 127 

WITNESSES

Jeffrey Bailet, M.D., Chair, Physician-Focused Payment Model Technical Advisory Committee ................................................................................................. 8 

Prepared statement 1

Elizabeth Mitchell, Vice Chair, Physician-Focused Payment Model Technical 

Advisory Committee ............................................................................................. 10 

Joint prepared statement of Dr. Bailet and Ms. Mitchell ............................. 12 

Louis A. Friedman, D.O., Fellow, American College of Physicians ..................... 54 

Prepared statement .......................................................................................... 57 

Daniel Varga, M.D., Chief Clinical Officer, Texas Health Resources ................. 68 

Prepared statement .......................................................................................... 70 

J. William Wulf, M.D., Chief Executive Officer, Central Ohio Primary Care 

Physicians, on Behalf of CAPG ........................................................................... 79 

Prepared statement .......................................................................................... 81 

Colin C. Edgerton, M.D., Alternate Delegate, American College of 

Rheumatology ....................................................................................................... 89 

Prepared statement .......................................................................................... 91 

Brian Kavanagh, M.D., Chairman, American Society for Radiation Oncology .. 94 

Prepared statement .......................................................................................... 96 

Frank Opelka, M.D., Medical Director, Quality and Health Policy, American 

College of Surgeons .............................................................................................. 107 

Prepared statement .......................................................................................... 109 

SUBMITTED MATERIAL

Statement of the American Academy of Family Physicians, November 9, 

2017, submitted by Mr. Green ............................................................................ 128 

Statement of the American Association of Nurse Anesthetists by Bruce A. 

Weiner, President, November 8, 2017, submitted by Mr. Burgess .................. 132 

Letter of November 8, 2017, from James D. Grant, President, American 

Society of Anesthesiologists, to Mr. Walden and Mr. Pallone, submitted 

by Mr. Burgess ..................................................................................................... 140 

Statement of the American Medical Association, November 8, 2017, submitted 

by Mr. Burgess ..................................................................................................... 145 

Statement of the American Physical Therapy Association, November 8, 2017, 

submitted by Mr. Burgess ................................................................................... 151 

Letter of November 8, 2017, from Mary R. Grealy, President, Healthcare 

Leadership Council, to Mr. Walden, submitted by Mr. Burgess ...................... 156 

1Dr. Bailet and Ms. Mitchell submitted a joint prepared statement. 

Page

IV 

Statement of the American Society of Clinical Oncology by Bruce Johnson, 

President, November 8, 2017, submitted by Mr. Burgess ................................ 160 

Statement of America’s Health Insurance Plans, November 8, 2017, submitted 

by Mr. Burgess ..................................................................................................... 163 

Statement of the Health Systems for Stark Reform Coalition, November 8, 

2017, submitted by Mr. Burgess ......................................................................... 184 

Statement of the American Hospital Association, November 8, 2017, submitted by Mr. Burgess ......................................................................................... 186 

Letter of November 7, 2017, from David Hebert, Chief Executive Officer, 

American Association of Nurse Practitioners, to Mr. Burgess and Mr. 

Green, submitted by Mr. Burgess ....................................................................... 191 

Statement of the Society of Thoracic Surgeons, November 8, 2017, submitted 

by Mr. Bucshon .................................................................................................... 193 

Statement of the American Association of Orthopaedic Surgeons, November 

8, 2017, submitted by Mr. Burgess ..................................................................... 196 

(1) 

MACRA AND ALTERNATIVE PAYMENT MODELS: DEVELOPING OPTIONS FOR VALUEBASED CARE 

WEDNESDAY, NOVEMBER 8, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:02 a.m., in room 

2123, Rayburn House Office Building, Hon. Michael Burgess (chairman of the subcommittee) presiding. 

Members present: Representatives Burgess, Guthrie, Barton, 

Shimkus, Blackburn, Lance, Griffith, Bilirakis, Long, Bucshon, 

Brooks, Mullin, Hudson, Collins, Carter, Green, Engel, Butterfield, 

Matsui, Castor, Sarbanes, Schrader, Kennedy, Eshoo, DeGette, and 

Pallone (ex officio). 

Also present: Representative Ruiz. 

Staff present: Adam Buckalew, Professional Staff Member, 

Health; Jordan Davis, Director of Policy and External Affairs; Paul 

Edattel, Chief Counsel, Health; Adam Fromm, Director of Outreach 

and Coalitions; Caleb Graff, Professional Staff Member, Health; 

Jay Gulshen, Legislative Clerk, Health; Alex Miller, Video Production Aide and Press Assistant; James Paluskiewicz, Professional 

Staff Member, Health; Jennifer Sherman, Press Secretary; Hamlin 

Wade, Special Advisor for External Affairs; Jeff Carroll, Minority 

Staff Director; Tiffany Guarascio, Minority Deputy Staff Director 

and Chief Health Advisor; Una Lee, Minority Senior Health Counsel; Samantha Satchell, Minority Policy Analyst; and C.J. Young, 

Minority Press Secretary. 

Mr. BURGESS. The Subcommittee on Health will now come to 

order, and I will recognize myself 5 minutes for the purpose of an 

opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Today marks the Health Subcommittee’s third oversight hearing 

to examine the implementation of the Medicare Access and CHIP 

Reauthorization Act. Personally, for me, the Medicare Access and 

CHIP Reauthorization Act was a significant milestone because repealing the Sustainable Growth Rate formula was one of my highest priorities coming to Congress. 

The Medicare Access and CHIP Reauthorization Act represents 

a fundamental change in a healthcare payment system that had reVerDate Mar 15 2010 09:55 Oct 11, 2018 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\115X75MACRAOPTIONSPDFMADE WAYNE
2 

mained static for many years and had created uncertainty for providers. Before the passage of this bill, Congress delayed cuts to 

Medicare reimbursements for doctors a total of 17 times. 

Through the hard work and steadfast leadership of the Energy 

and Commerce Committee and the unwavering commitment from 

the medical community, this bipartisan effort led to policies that 

sought to put power back in the hands of those who actually provide the care. That way, doctors will give shape to the healthcare 

payment of the future. 

So it is critically important that the Medicare Access and CHIP 

Reauthorization Act succeeds and I am glad that the committee remains dedicated to ensuring that we get payment reform right. It 

does continue to be one of my top priorities. 

Today, we will convene two panels of witnesses. 

And I want to welcome Dr. Jeffrey Bailet, the chairperson of the 

Physician-Focused Payment Model Technical Advisory Committee—we will call it PTAC for short—and Ms. Elizabeth Mitchell 

who is the vice chairperson of PTAC. I want to welcome you to our 

subcommittee this morning. 

The next panel, we will hear from physicians representing key 

stakeholder groups that have either already had, have an alternative payment model, or have one in the pipeline with the PTAC 

or the Center for Medicare and Medicare information. With that I 

want to take a moment also to welcome Dr. Daniel Varga from the 

Texas Health Resources Presbyterian Hospital where I did part of 

my residency, which provides care for many of my constituents in 

the north Texas area. It is good to have you in person today, Dr. 

Varga. 

The focus of today’s hearing will be on the Alternative Payment 

Models which is one of two options that eligible professionals can 

be reimbursed under MACRA. The other option is a Merit-based 

Incentive Payment System which also deserves our full attention 

and will be the subject of an additional hearing in the very near 

future. 

One of the many goals of the Medicare Access and CHIP Reauthorization Act was to encourage and engage in care delivery models that drive quality while reducing healthcare costs. This movement towards alternative payment methods has allowed providers 

greater flexibility to innovate and try a delivery system that better 

aligns with their unique practice needs and allows them to produce 

better patient outcomes and offers an opportunity to share in the 

savings. I am encouraged by figures that indicate an estimated 50 

percent of Medicare payments will be tied to these alternative payment methods next year. 

We may have heard of some of these models before. The Medicare Shared Saving Program through Accountable Care Organizations, the Next Generation ACO Model, the Comprehensive Primary Care Plus model, and the Oncology Care Model. It is safe to 

say we will likely hear of them and similar hybrids in the near future. It is notable and important these efforts are physician-directed and physician-led. This is not necessarily the easiest path, 

but it is the correct one. 

A recurring theme that we will hear this morning is that physicians are best suited to provide the determinants of quality. PaVerDate Mar 15 2010 09:55 Oct 11, 2018 Jkt 037690 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\115X75MACRAOPTIONSPDFMADE WAYNE
3 

tients are counting on us. Not congressmen, but doctors. They are 

counting on us to get this right. It has been 21⁄2 years since the 

Medicare Access and CHIP Reauthorization Act became law. 

I believe the true potential of this act has yet to be met, but I 

believe the law has already begun proving a success of delivering 

better care to beneficiaries, savings to the Medicare program, certainty for our doctors. It is important to hear the positive impact 

this law has had so far from everyone here today. Finally, it is critical that what we accomplish today follows the same open, transparent, and bipartisan structure that helped us get this act signed 

into law. 

I again want to welcome all of our witnesses. Thank you for 

being here today. Thank you for giving us your time. I look forward 

to your testimony. And I will yield the balance of my time to Mrs. 

Blackburn from Tennessee for a statement. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

Today marks the Health Subcommittee’s third oversight hearing to examine the 

implementation of the Medicare Access and CHIP Reauthorization Act since its enactment. Personally, MACRA was a significant milestone because repealing the Sustainable Growth Rate was one of my driving forces soon after I came to Congress. 

MACRA represents a fundamental change in a health care payment system that 

had remained static for many years and had created tremendous amount of uncertainty for providers since 2003. Before MACRA, Congress delayed cuts to Medicare 

reimbursements for physician services a total of 17 times! Through the hard work 

and steadfast leadership of the Energy and Commerce Committee and unwavering 

commitment of the medical community, this bipartisan effort led to policies that 

sought to put power back in the hands of those who actually provide care. That way, 

doctors will give shape to the health care payment systems of the future. So, it is 

critically important that MACRA succeeds, and I am glad that the committee remains dedicated to ensuring we get payment reform right. This continues to be one 

of my priorities. 

Today we will convene two panels of witnesses. First, I want to welcome Dr. Jeffrey Bailet, chairperson of the Physician-Focused Payment Model Technical Advisory Committee (PTAC), and Ms. Elizabeth Mitchell, vice chairperson of PTAC to 

our subcommittee this morning. Later, we will hear from physicians representing 

key stakeholder groups that either already have an Alternative Payment Model 

(APM) or have one in the pipeline with PTAC or the Center for Medicare and Medicaid Innovation (CMMI). With that, I want to take a moment to also welcome Dr. 

Daniel Varga from the Texas Health Resources, which provides care for many of my 

constituents in the North Texas area. 

The focus of today’s hearing will be on Alternative Payment Models (APMs), 

which is one of two options eligible professionals can be reimbursed under MACRA. 

The other option is the Merit-based Incentive Payment System (MIPS), which also 

deserves our full attention and will be the subject of an additional hearing in the 

near future. 

One of the many goals of MACRA was to encourage and engage in care delivery 

models that drive quality while reducing healthcare costs. This movement towards 

APMs has allowed providers greater flexibility to innovate and try a delivery system 

that better aligns with their unique practice needs, produce better patient outcomes, 

and offer them an opportunity to share in significant savings. I am encouraged by 

figures that indicate an estimated 50 percent of Medicare payments will be tied to 

APMs next year. We may have heard some of these models before: the Medicare 

Shared Savings Program through Accountable Care Organizations, the Next Generation ACO Model, the Comprehensive Primary Care Plus Model, and the Oncology 

Care Model. It is safe to say we will likely hear of them and similar hybrids much 

more in the future. 

It is notable and important that these efforts are physician directed and physician 

led. This not necessarily the easiest path, but it is the correct one. A recurring 

theme we will hear this morning is that physicians are best suited to provide the 

determinants of quality. Patients are counting on us—the doctors—to get this right. 

4 

It has been 21⁄2 years since MACRA became law. I believe the true potential of 

MACRA has yet to be met, but I believe the law has already been proven a success 

in delivering better care to beneficiaries, savings to the Medicare program, and certainty to doctors. It is important to hear the positive impact this law has had so 

far from everyone here today. Finally, it is critical that what we accomplish today 

follows the same open, transparent, and bipartisan structure that helped get 

MACRA signed into law. 

I again want to welcome all of our witnesses and thank you for being here. I look 

forward to your testimony. 

I would like to yield the balance of my time to Ms. Blackburn of Tennessee, for 

a statement. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And I am so 

pleased that we are doing this hearing today. And I was one of 

those that joined you in being a vocal opponent of kicking the can 

on the SGR. There were things that needed to be done and it is 

our responsibility to address those issues and to find solutions and 

of course getting MACRA to the President’s desk was a solution. 

The old system of short-term fixes does not work, didn’t work, 

and I am looking forward to hearing how the law’s Alternative Payment Models are being designed and implemented and improving 

patient treatment and outcomes in a variety of settings. Being from 

the Nashville, Tennessee area, we have a lot of health care that is 

headquartered there and the steps that are being taken are important to them, to our constituents. And I yield back. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back. The Chair recognizes the subcommittee ranking member, Mr. Green of Texas, 5 minutes for an opening statement, 

please. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman. And I want to thank you 

for calling this hearing. I know we were both concerned over those 

17 years that how we were going to fix the SGR and we did come 

to a bipartisan solution. And my concern and with this hearing we 

don’t want to recreate the SGR and have Congress go through that 

so as nimble as Congress can be on our feet we need to make sure 

we catch it before we have to deal with it for 17 years. 

The Sustainable Growth Rate was the scourge of Medicare and 

doctors who treat Medicare patients for more than a decade and 

acted as part of the Balanced Budget Act of 1997. The SGR calculations led to a reduction of physician payments starting in 2002 and 

had to be patched annually, as you said, for 17 years. In 2014, this 

committee along with other committees of jurisdiction finally came 

together and introduced a bipartisan bill to permanently repeal the 

SGR and replace it with a system that rewards value over volume 

and incentives for quality care. 

Finally, in 2015, an agreement on offsets was reached in H.R. 2 

that was Medicare Access and CHIP Reauthorization Act or 

MACRA overwhelmingly passed both chambers and was signed 

into law. MACRA did more than just repeal the flawed SGR formula. It was designed to overhaul and realign payment incentives 

for Medicare and transition of our health system to one that rewards value instead of just volume of care. It provided stability in 

Medicare payments for providers for immediately following years 

5 

and made it easy for providers to report on and deliver high-quality 

care, streamlining Medicare’s multiple quality reporting systems, 

and over time consolidating them into one. 

Critically, MACRA encourages providers to move away from feefor-service and partake in a new delivery model that will reduce 

costs while increasing quality. Under the law, physicians who treat 

Medicare beneficiaries have a choice between participating in the 

Merit-based Incentive Payment System, MIPS, or the Advanced Alternative Payment Models, APMs, to make the shift from fee-forservice and volume-based payment system to a value-based payment system. 

The focus of today’s hearing is in the implementation of these 

two tracks, the Alternative Payment Models. Alternative Payment 

Models generally are an approach to provide provider payment that 

offers incentive to quality, cost-effective care in specific circumstances for specific patient populations or episodes of treatment. Advanced APMs created under MACRA go a step further 

and under these models physicians accept some amount of financial 

risk for the quality of the care and ultimate outcomes of their patients. Participants in Advanced APMs accept this risk in exchange 

for greater rewards when they succeed. 

Starting next year, qualifying APM participants can receive a 5 

percent bonus in their reimbursement annually. Centers for Medicare and Medicaid Innovation center has developed and piloted 

APMs since its inception. Many of these now qualify as Advanced 

APMs under MACRA including certain Accountable Care Organizations, Patient-Centered Medical Homes and the Comprehensive 

Primary Care Plus model. 

I want to note that one of the most successful ACOs in the country is Memorial Hermann Accountable Care organization created 

and operated by leaders of the Memorial Hermann Health System 

in Houston, a 16-hospital integrated health system based in Houston. The Memorial Hermann ACO has been number one in Shared 

Savings Program ACO in the country for several years running, 

and by 2016 has generated nearly 200 million in savings across 3 

years of participation in the program. Today we hear witnesses 

from these payment models, models that are currently underway 

and physicians participating in them in which are generating savings to Medicare and improved patient outcomes. 

Staunch oversight of MACRA is critical. We must avoid the pitfalls of what we did since 1997, and I am pleased we are having 

this hearing today and hope this committee engages in more oversight and dialogue as the major reforms of MACRA are fully implemented. And I yield back the balance of my time. 

Oh, sorry. For the record, I would like to insert a letter from the 

American Academy of Family Physicians. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The chairman of the full committee has been detained 

on a conference call. We will recognize him for an opening statement upon his arrival. But pending that, I would like to recognize 

the gentleman from New Jersey, Mr. Pallone, the ranking member 

of the full committee, 5 minutes for an opening statement, please. 

6 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman, for holding this important hearing and thank the witnesses for being here today. We are 

meeting today to discuss one of the great bipartisan success stories 

of this committee, the Medicare Access and CHIP Reauthorization 

Act of 2015 or MACRA. 

MACRA built upon the successes of the Affordable Care Act to 

improve the quality and efficiency of the Medicare program and of 

our healthcare system more broadly. Prior to the ACA, healthcare 

services in the Medicare program were predominantly reimbursed 

on a fee-for-service payment model which rewarded providers for 

the number of tests or procedures they performed instead of the 

quality of medical care provided. And the ACA took major steps towards improving the quality of our healthcare system by creating 

new models of healthcare delivery within the Medicare program. 

These new payment and delivery models focused on transforming 

clinical care and shifting from a volume- to a value-based care 

model such as Accountable Care Organizations or ACOs and Patient-Centered Medical Homes. These models prioritize the patient 

with the goal of improving care coordination and patient outcomes 

by simultaneously lowering costs and they have reduced hospitalizations, emergency department visits, and have improved 

both the quality of care and access to care. There are additional opportunities to refine these models and increase savings, for example, by better targeting the riskiest and costliest patients for interventions. 

But I want to take a moment to recognize that while we continue 

to face challenges, the transformation to a value-based healthcare 

system is well underway. With MACRA we are entering the next 

phase of delivery system reform and further shifting the paradigm 

away from a volume-based to a value-based healthcare system. 

MACRA builds on these healthcare delivery systems reform efforts by offering opportunities and financial incentives for physicians to transition to new payment models known as Advanced Alternative Payment Models or AAPMs. And AAPMs must meet a 

number of criteria and require clinicians to accept some financial 

risk for the quality and cost outcomes of their patients. Physicians 

can join existing and successful models that qualify as AAPMs such 

as ACOs and the Comprehensive Primary Care Plus or CPC+ 

model which we will hear about today. They can also develop their 

own models known as Physician-Focused Payment Models. 

A number of physician organizations have already submitted applications for approval by the Physician-Focused Payment Model 

Technical Advisory Committee or PTAC, and PTAC has been accepting and reviewing applications for Physician-Focused Payment 

Models over the last year and has approved several for testing, including the ACS–Brandeis Model which we will hear about today 

from the American College of Surgeons. 

I look forward to hearing from PTAC about the application process, the way these efforts fit within the broader context of delivery 

system reforms, how these submitted models have been evaluated, 

and how models may be implemented going forward. 

7 

Our second panel of witnesses practice in a variety of settings 

across the country and represent diverse expertise and training. 

They each have a unique perspective to share with us regarding 

the implementation of MACRA and how it has encouraged a focus 

on quality and efficient health care. And I want to thank you all 

for your commitments to delivery system reform. It is only through 

sustained commitment of the leading physician organizations and 

clinicians such as yourselves that we can hope to bend the cost 

curve. 

So I look forward to discussing the tools and best practices providers are already using, some of the challenges and opportunities 

they have faced as well as future efforts that can be employed to 

help make MACRA work effectively for all, so I thank you. 

I don’t think anybody on my side wants the time, Mr. Chairman, 

so I yield back. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Good morning. Thank you Mr. Chairman for holding this important hearing, and 

thank you to the witnesses for being here today. 

We’re meeting today to discuss one of the great bipartisan success stories of this 

committee, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA. 

MACRA built upon the successes of the Affordable Care Act to improve the quality 

and efficiency of the Medicare program, and of our healthcare system more broadly. 

Prior to the ACA, healthcare services in the Medicare program were predominantly reimbursed on a fee-for-service payment model, which rewarded providers for 

the number of tests or procedures they performed instead of the quality of medical 

care provided. The ACA took major steps towards improving the quality of our 

healthcare system by creating new models of healthcare delivery within the Medicare program. These new payment and delivery models focused on transforming 

clinical care and shifting from a volume- to a value-based care model, such as Accountable Care Organizations or ACOs and Patient Centered Medical Homes. 

These models prioritize the patient, with the goal of improving care coordination 

and patient outcomes while simultaneously lowering costs. They have reduced hospitalizations, emergency department visits, and have improved both the quality of 

care and access to care. There are additional opportunities to refine these models 

and increase savings, for example, by better targeting the riskiest and costliest patients for interventions. But I want to take a moment to recognize that while we 

continue to face challenges, the transformation to a value-based healthcare system 

is well underway. 

With MACRA, we are entering the next phase of delivery system reform and further shifting the paradigm away from a volume-based to a value-based healthcare 

system. MACRA builds on these healthcare delivery system reform efforts by offering opportunities and financial incentives for physicians to transition to new payment models known as Advanced Alternative Payment Models, or AAPMs. AAPMs 

must meet a number of criteria, and require clinicians to accept some financial risk 

for the quality and cost outcomes of their patients. Physicians can join existing and 

successful models that qualify as AAPMs, such as ACOs and the Comprehensive 

Primary Care Plus (CPC+) model, which we will hear about today. They can also 

develop their own models, known as Physician-Focused Payment Models. 

A number of physician organizations have already submitted applications for approval by the Physician-Focused Payment Model Technical Advisory Committee, or 

PTAC. PTAC has been accepting and reviewing applications for Physician-Focused 

Payment Models over the last year, and has approved several for testing, including 

the ACS–Brandeis model we will hear about today from the American College of 

Surgeons. I look forward to hearing from PTAC about the application process, where 

these efforts fit within the broader context of delivery system reform, how these submitted models have been evaluated, and how models may be implemented going forward. 

Our second panel of witnesses practice in a variety of settings across the country 

and represent diverse expertise and training. They each have a unique perspective 

to share with us regarding the implementation of MACRA and how it has encouraged a focus on quality and efficient healthcare. I want to thank you all for your 

8 

commitment to delivery system reform-it is only through the sustained commitment 

of the leading physician organizations and clinicians such as yourselves that we can 

hope to bend the cost curve. 

I look forward to discussing the tools and best practices providers are already 

using, some of the challenges and opportunities they have faced, as well as future 

efforts that can be employed to help make MACRA work effectively for all. 

Thank you, I yield back the remainder of my time. 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman. The Chair would remind Members that, pursuant to 

committee rules, all Members’ opening statements will be made 

part of the record. 

And we do want to thank our witnesses for being here today on 

both panels. We thank them for taking their time to testify before 

the subcommittee. Each witness will have the opportunity to give 

an opening statement followed by questions from Members. 

Today we will hear from Dr. Jeffrey Bailet, the chairperson of 

the Physician-Focused Payment Model Technical Advisory Committee, and Ms. Elizabeth Mitchell, vice chairperson, Physician-Focused Payment Model Technical Advisory Committee. That is a 

mouthful. 

We appreciate you being here today. 

And, Dr. Bailet, you are now recognized for 5 minutes for an 

opening statement, please. 

STATEMENTS OF JEFFREY BAILET, M.D., CHAIR, AND ELIZABETH MITCHELL, VICE CHAIR, PHYSICIAN-FOCUSED PAYMENT TECHNICAL MODEL ADVISORY COMMITTEE 

STATEMENT OF JEFFREY BAILET 

Dr. BAILET. Thank you. Chairman Burgess, Ranking Member 

Green, and distinguished members of the Energy and Commerce 

Subcommittee on Health, thank you for the opportunity to testify 

on behalf of the chair and vice chair of the Physician-Focused Payment Model Technical Advisory Committee or PTAC. We are Jeffrey Bailet, executive vice president of Health Care Quality and Affordability at Blue Shield of California—we insure 4.1 million 

members, we are nonprofit, and the third largest health plan in 

California—and Elizabeth Mitchell, my vice chair, CEO of the Network for Regional Health Improvement, a national network of 

multi-stakeholder Regional Health Improvement Collaboratives 

with over 30 members across the U.S. 

As an otolaryngologist—head and neck surgeon—and as a Blue 

Shield executive vice president, I am responsible for leading all 

medically related activities for the health plan, including quality 

medical management, provider contracting, and our Accountable 

Care Organization strategy, and I also serve as the chair of PTAC. 

Thank you for extending this opportunity for us to speak on the important topic of Medicare payment reform and PTAC’s role supporting physicians and technicians as they transition to valuebased care delivery. 

Even before the inception of MACRA there was considerable 

agreement that the current fee-for-service model based on paying 

for the volume and intensity of services is unsustainable and needs 

to change to a model that is value-based, patient-centered, and accountable. However, we need to transform the care delivery system 

9 

and change the trajectory of spending in a way that maintains the 

vibrancy of the institutions and professionals that have dedicated 

their lives to preserving health and caring for the sick, injured, and 

dying in the U.S. 

MACRA and Alternative Payment Models have the potential to 

address the fundamental drivers of cost and quality and ensure 

that we have a high-value health system, the backbone of which is 

providers who want to change care delivery and give better care to 

patients. 

As the largest purchaser of health care in the world, Medicare 

has considerable influence on payment and, through the development of Alternative Payment Models, drive market change, and the 

PTAC plays an important role in accelerating model development. 

The PTAC is an 11-member advisory committee established to consider physicians and other clinical stakeholders’ proposals for new 

payment models that foster high-quality, high-value health care. 

PTAC members are a diverse, highly talented group that have 

deep expertise in clinical care and technical expertise in the areas 

of measurement, payment, and care delivery reform. The committee includes a balance of physicians and non-physicians who are 

highly committed to ensure that proposals are critically, thoroughly, and expeditiously evaluated. 

We have sought to establish high-integrity relationships with the 

clinical and broader stakeholder communities across the country, 

some of which you will hear today. We are inviting comments, 

questions, or concerns prior to and during public meetings when 

models are evaluated. Furthermore, PTAC is keenly interested in 

all types of models including those emanating from single specialty, 

primary care, small and rural practices, sophisticated health systems, and multispecialty group practices. 

PTAC’s disciplined and collaborative efforts have garnered tremendous interest in creativity from stakeholders, receiving 33 letters of intent and 20 full proposals spanning many specialties, payment types, and practice sizes. To date, the PTAC has held 9 days 

of public meetings, we have deliberated on six proposals, we have 

voted on five with submitted reports to the secretary, and we have 

14 proposals under active review. It is our belief that the interest 

in and work of PTAC confirms Congress’ direction and intent for 

MACRA to transition U.S. health care to a high-value system delivering better care at lower cost. 

Lastly, PTAC works collaboratively with CMS and CMMI to garner input about specific proposals especially if they have previously 

evaluated to any capacity by CMS or CMMI. To date, the models 

PTAC has sent to the secretary for potential limited-scale testing 

have not been approved. 

In addition, we are unclear whether because of the extensive review process already provided by the PTAC, submitters can undergo a more expedited review and evaluation process. Our concern is 

that if we are not able to support our recommendations or work to 

fix any shortfalls in our analyses, the value of PTAC’s process will 

not be fully realized. We believe that closer coordination between 

PTAC and CMS and CMMI will enable greater efficiency, greater 

capacity to implement more innovative models, and greater clarity 

for applicants seeking to understand the process of submission and 

10 

approval and look forward to continued partnership with CMS and 

CMMI. 

In closing, PTAC is an incredibly important forum to identify innovative models from the field to expand Medicare’s payment 

model portfolio. Transforming care delivery, including implementing innovative payment policy, is complicated; therefore an 

open public process that includes the stakeholders and also educates stakeholders and the public is likely the best way forward. 

We believe the PTAC is well suited for this purpose. 

We commend Congress for its vision and we thank you for the 

opportunity to be part of such important work. Thank you. 

Mr. BURGESS. The Chair thanks the gentleman. 

Ms. Mitchell, you are recognized for 5 minutes, please. 

STATEMENT OF ELIZABETH MITCHELL 

Ms. MITCHELL. Thank you Chairman Burgess, Ranking Member 

Green, and distinguished members of the committee. Thank you 

again for the opportunity to be here today and for your leadership 

on these critically important issues. 

As president and CEO of the Network for Regional Health Improvement, my members and I work at the community level with 

all stakeholders, employers, providers, health plans, patients, and 

others, and I can assure you that healthcare quality and affordability are of primary concern. The urgency to reduce healthcare 

costs while improving quality cannot be overstated. This is impacting families, employers, State governments, and our overall economy. 

MACRA addresses the fundamental drivers and by reforming 

care and payment we have truly the opportunity to achieve better 

care at lower cost and this is an incredible opportunity for the U.S. 

Dr. Bailet has shared the innovation and leadership that we have 

seen from the physician community and their readiness to lead 

these changes. This is an opportunity that we cannot squander. 

Despite the exceptional interest in PTAC as evidenced by the 

number of proposals and letters of intent, there are still barriers 

that physicians face in transitioning to these new models. Providers who are ready and willing to lead change continue to face 

barriers and need additional support. The PTAC took the time to 

think about some of the key barriers that we have seen from the 

submitters over the first year and we have identified three priority 

areas for your consideration. These include the need for technical 

assistance to providers, greater access to shared data, and the opportunity for limited-scale testing of innovative models. 

PTAC believes that there is a material need for technical assistance for providers to develop and implement Physician-Focused 

Payment Models and APMs. Most physicians, they have experience 

changing care delivery but they have not been trained in the development of incentives, payment models, or risk management. Recent 

surveys of high-performing health systems and medical groups 

demonstrate the growing willingness to support and assume risk, 

but these organizations have made considerable investments in the 

infrastructure to successfully participate in APMs. 

And while large health systems may have the resources and expertise to develop and implement these models, such small and 

11 

rural practices are at greatest risk of not being able to afford the 

technical support to design and implement the payment and care 

changes needed to succeed under risk-based models. This threatens 

to leave these small and rural practices out of the transition to 

value-based care. 

Congress should identify ways to enable the provision of technical assistance to providers seeking to develop and implement 

APMs in a way that does not exacerbate resource differentials 

among providers and that helps move all providers forward towards value-based care. Although MACRA does not authorize 

PTAC to provide such technical assistance, many members of our 

committee believe that PTAC should be able to do so, or at a minimum PTAC can provide valuable insights related to what types of 

technical assistance would be most helpful. 

The PTAC supports deployment of HHS resources to provide access to analytic, technical, and quality improvement support. We 

also believe that there is a need for greater access to shared data. 

This is a common barrier identified by submitters. PTAC, too, has 

observed common weaknesses among some of the submitted proposals. Specifically, applicants need communitywide, all-payer 

claims and clinical data sharing across communities to successfully 

implement models. Providers cannot manage risk, care, or cost 

without timely, comprehensive data. 

Most of the proposals PTAC has received require coordination of 

care across practices, providers, and communities, but if data is not 

shared effectively participants cannot coordinate patient care 

across episodes or populations. Data blocking, lack of interoperability, and other limits on data access continue to be a major barrier to care improvement on behalf of patients. The move to APMs 

as required by MACRA has made this an urgent issue. We ultimately must address the barriers to communitywide data access in 

order to enable the successful transition to APMs. 

Finally, limited-scale testing of innovative models is necessary 

before we scale models for national implementation. This is the 

committee’s third priority and we believe that innovation in any industry requires the opportunity for small-scale testing. PTAC has 

identified limited testing of models as an important phase of development and implementation as it is unknown how key elements of 

the model will clinically and financially perform until the model 

functions in a testing environment. 

Given the diversity of markets across the United States, regional 

testing will also identify aspects of the models that may require 

flexibility and implementation. We do not expect a one-size-fits-all 

approach to reform and we believe limited-scale testing of these important innovations will allow successful transitions to Alternative 

Payment Models. 

In closing, I want to underscore what my chair has said. We are 

seeing excitement and innovation and enthusiasm from the field. 

We see clinicians who are ready to lead the transformation in care 

and payment, and we think this is an incredibly important opportunity to support the move to alternative-based payment models for 

a high-value health system. Thank you. 

[The joint prepared statement of Dr. Bailet and Ms. Mitchell follows:] 

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Statement of 

Jeffrey Bailet, MD 

Chair- Physician-Focused Payment Technical Advisory Committee 

And 

Elizabeth Mitchell 

Vice Chair- Physician-Focused Payment Technical Advisory Committee 

on 

Medicare Access and CHIP Reauthorization Act of 2015: Examining Physician Efforts to 

Prepare for Medicare Payment Reforms 

before the 

Subcommittee on Health 

of the 

Committee on Energy and Commerce of the U.S. House of Representatives 

November 8, 2017 

Chairman Burgess, Ranking Member Green and distinguished members of the Energy and 

Commerce Subcommittee on Health, thank you for the opportunity to testify on behalf of the 

Chair and Vice Chair of the Physician Focused Payment Technical Advisory Committee 

(PTA C). We are Jeffrey Bailet, Executive Vice President of Health Care Quality and 

Affordability at Blue Shield of California (BSC), the third largest nonprofit health plan in 

California, insuring 4.1 million members and Elizabeth Mitchell, CEO of the Network for 

Regional Health Improvement (NRHI), a national network of multi-stakeholder Regional Health 

Improvement Collaboratives with over 30 members across the US. As an OtolaryngologistHead & Neck surgeon and as a BSC Executive Vice President, I am responsible for leading all 

medically related activities for the health plan including quality, medical and network 

management, provider contracting and relations and our Accountable Care Organization (ACO) 

strategy. As the CEO ofNRHI, I am responsible for leading our members and state-affiliated 

partners working at the state and regional level to transform care and payment toward the goals 
13 


28263.002

of better health, better care and lower costs. Together we are privileged to provide leadership 

support to the PT AC, the committee established by Congress in the Medicare Access and Chip 

Reauthorization Act of2015 (MACRA), to evaluate and recommend Physician Focused Payment 

Models (PFPMs). 

Thank you for extending this opportunity for us to speak on the important topic of Medicare 

payment reform and the PTAC's role supporting physicians and clinicians as they transition 

away from fee-for-service to value-based care delivery. We appreciate the opportunity to speak 

to this noteworthy policy achievement and we arc pleased to be leaders in the 

transition toward a value-based Medicare payment system as Chair and Vice Chair ofPTAC. 

The PTAC was created by Congress in MACRA as an advisory committee appointed by the 

Comptroller General to consider physicians' and other clinical stakeholders' proposals for new 

payment models that foster high quality, high value health care. After thorough evaluation with 

extensive public input, the PTAC will then advise the Secretary of Health and Human Services 

(HHS) regarding what payment models we believe are likely to meet HHS' goals of better health 

and smarter spending. 

Even before the inception of MACRA, considerable agreement existed that the current fee-forservice model based on paying for the volume and intensity of services is unsustainable and 

needs to change to a model that is value-based, patient-centered and accountable. Given the 

demographic realities related to the aging of the baby boomers accelerating their need for 

health care services and the history of health care cost escalations in excess of inflation, the 

urgency for change from all stakeholders has grown. At the same time, we need to transform the 
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28263.003

care delivery system and change the trajectory of spending in a way that maintains the vibrancy 

of the institutions and professionals that have dedicated their lives to preserving health and 

caring for the sick, injured and dying in the US. 

Healthcare quality and affordability are of critical importance to families, communities and 

public and private payers. MACRA and alternative payment models (APMs) have the potential 

to address the fundamental drivers of cost and quality and ensure that we have a high value 

health system, the backbone of which is providers who want to change care delivery and give 

better care to patients. As the largest purchaser ofhealthcare in the world, Medicare has 

considerable influence on payment and can drive innovation by providers. Through the 

development of APMs, Medicare is driving market change and the PT AC plays an essential role 

in accelerating model development. 

Since PTAC was chartered on January 11,2016, PTAC leadership, in collaboration with the 

entirety of the committee, have worked tirelessly to establish PTAC as a credible, trusted, 

transparent body that supports and enables leaders from the field to bring innovative proposals to 

expand the Medicare payment model portfolio. PT AC members are a diverse, highly talented 

group that have deep expertise in clinical care, and technical expertise in the areas of 

measurement, payment and care delivery reform. As designed by Congress, the committee 

includes a balance of physicians and non-physicians. Members are committed to the effort as 

demonstrated by the countless hours of volunteered time devoted to evaluating models and 

serving on the Committee. PTAC members partner with the dedicated and highly skilled 

Assistant Secretary for Planning and Evaluation (ASPE) staff to ensure the PTAC remains 

responsive and evaluations are complete, clearly written, evaluated expeditiously, accurately 
15 


28263.004

reflect the points of view expressed during deliberations, and communications to stakeholders, 

submitters and the Secretary are transmitted in a timely way. We have sought to establish high 

integrity relationships with the clinical and broader stakeholder communities and critically 

evaluate proposed models, often engaging in extensive dialogue with proposers to better 

understand the clinical and financial nuances of their proposals. As part of our evaluation process 

we elicit input from independent clinical experts and invite clinical stakeholders from across the 

country to provide comments, questions or concerns prior to and during public meetings when 

models are evaluated. We are committed to transparency and relentlessly ensure potential 

conflicts of interest and/or questions of partiality are disclosed and addressed when evaluating 

proposals to avoid limiting the effectiveness of our recommendations. Furthermore, PTAC is 

keenly interested in all types of models including those emanating from single specialty, primary 

care, community based groups, small and rural practices, sophisticated health systems or 

multispecialty group practices, and unconventional care delivery models such as Hospital at 

Home. We welcome and invite ideas from all stakeholders to best reflect input from leaders in 

the field seeking to transform care on behalf of patients. 

PTAC's disciplined and collaborative efforts have garnered tremendous interest and creativity 

from stakeholders who believe in the Committee's value. This is exemplified by the Committee 

receiving 33 letters of intent and 20 full proposals spanning many specialties, payment types and 

practice sizes since starting to accept submissions on December I of 2016. Submitter types 

include specialty medical associations, health systems and academic medical centers, individual 

or small physician groups, larger groups of greater than I 00 physicians, and Health Care 

Innovation Awards (HICA) awardees. Emanating from all areas of the country, models reflect 

nineteen different specialties and three payment model types: bundled payment, care 
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28263.005

management, and capitation. Since release of the final rule by the Secretary one year ago, PTAC 

has held 9 days of public meetings, deliberated on 6 proposals, voted on 5 with submitted reports 

to the Secretary and has 14 proposals under active review. This level of interest and activity 

reflects a readiness and demand for change from leaders across the physician community and 

beyond, including a willingness to participate in alternative payment models and to accept some 

form of risk, either two-sided risk for total cost of care, variants of capitation, and risk for 

achieving quality outcomes. The Committee's thorough and deliberative processes reflect the 

commitment of committee members to honor the leadership and innovation from the field to 

make care better for all Medicare beneficiaries. It is our belief that the interest in and work of 

PTAC affirms Congress' direction and intent for MACRA to transition US healthcare to a highvalue system delivering better care at lower cost. 

However, providers who are ready and willing to lead change continue to face obstacles to 

transforming care and payment and need additional support. In our first year of evaluating 

proposals, three common barriers have been identified repeatedly and warrant further 

consideration by Congress to fully achieve the potential ofMACRA and alternative payment 

models. The committee has prioritized three high impact changes that would accelerate progress 

and enable providers to improve care and value. These include the need for: 

• technical assistance; 

• greater access to shared data; and 

• limited scale testing of innovative models. 

Technical Assistance: PT AC believes there is a material need for technical assistance for 

providers to develop and implement physician focused payment models (PFPMs) and APMs. 
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28263.006

Most physicians have experience changing care delivery but have not been trained in the 

development of incentives, payment models or risk management. Recent surveys of high 

performing health systems and medical groups demonstrate growing support to assume risk, and 

these organizations have made considerable infrastructure and human capital investments to 

successfully participate in APMs. 

While large health systems may have the resources and expertise to develop and implement these 

models that address both the clinical and payment elements-such as determination of payment 

amounts, risk sharing and risk adjustment-small and rural practices are at greatest risk of not 

being able to afford the technical support to redesign care and payment or the infrastructure and 

human capital investments needed to successfully assume risk and participate in alternative 

payment models. This threatens to leave these small and rural practices out of the transition to 

value-based care. Many of these smaller, potentially less sophisticated practices need to 

participate in APMs if we are going to successfully transform care delivery by enhancing quality 

and lowering costs. The PTAC plays an important role in working with these clinical 

stakeholders as we evaluate models that these practices could participate in. Congress should 

identify ways to enable the provision of technical assistance to providers seeking to develop and 

implement APMs in a way that does not exacerbate resource differentials among providers and 

that move all providers towards value based care. 

Although MACRA does not authorize PTAC to provide such technical assistance, many 

members of the Committee believe PT AC should be able to do so. At a minimum PTAC can 

provide valuable insights related to what types of technical assistance would be helpful to 

sharpen models and make them more likely to be recommended-and later implemented-based 

on the trends and learnings garnered through evaluations of proposals. The PTAC supports 
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deployment ofHHS resources to provide access to analytic, technical, and quality improvement 

support and believes that this assistance would promote a more diverse and stronger pool of 

submitted PFPMs, and greater success implementing PFPMs, benefitting HHS and those it 

serves. 

Greater Access to Shared Data: PTAC submitters have consistently identified data access as 

another major barrier to developing and implementing PFPMs and APMs. PT AC too has 

observed common weaknesses across submitted proposals. These include inadequacies in the 

data presented in submitted models, inadequate measurement, and limited strategies for sharing 

data and information across sites to better manage care. Submitters need better and more timely 

access to clinical and claims data to identify areas of improvement, design and implement 

innovative models, and then track quality and resource use to ensure that care innovation is 

occurring. 

Specifically, applicants need community wide all-payer claims and clinical data sharing across 

communities to successfully implement models. Providers cannot manage risk, care, or cost 

without timely, comprehensive data. Most of the proposals PTAC has received require 

coordination of care across practices, providers, and across communities, but if data is not shared 

effectively, participants cannot coordinate patient care across episodes or populations. Data 

blocking, lack of interopcrability, and other limits on data access continue to be a major barrier 

to care improvement on behalf of patients. The move to APMs as required by MACRA has made 

this an urgent issue. We ultimately must address barriers to community wide data access in 

order to enable the transition to APMs and enable success under MACRA. 
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28263.008

Limited Scale Testing of Innovative Models: Our third priority change is the need for small 

scale testing. Like any innovation, promising PFPMs are likely to require testing in the field to 

fully understand implementation barriers and unintended consequences before being nationally 

scaled. PT AC has identified limited testing of models as an important phase of development and 

implementation as it is unknown how key elements of the model will clinically and financially 

perform until the model functions in a testing environment. Given the diversity of markets across 

the US, regional testing will also identify aspects of the models that may require flexibility in 

implementation or specific attributes that are responsive to local needs instead of a 'one size fits 

all' approach. Enabling small scale testing of promising models will enable identification and 

understanding of necessary changes to the model before widespread adoption. PTAC created the 

recommendation category of "recommended for limited-scale testing" in support of 

implementation on a limited scale to generate clarifying data and information. 

Lastly, submitters and other clinical stakeholders have shared their need for greater clarity as to 

what happens after PTAC has made its recommendations to the Secretary. While we understand 

the review process is new, the sooner submitters and our Committee gain greater insights into the 

post PT AC portion of the review process and how PTAC recommendations are considered, the 

higher likelihood of maintaining engagement and an excited willingness to move 

forward. PTAC works collaboratively with CMS & CMMI to garner input about specific 

proposals, especially if they have been previously evaluated in any capacity by CMS or CMMI, 

if similar models exist that have previously been considered, or obvious challenges CMS or 

CMMI identifies that may limit the ability for a specific model to be successfully tested or 

implemented. In the spirit of collaboration and transparency, detailed strengths and weaknesses 

within proposals are incorporated within the reports to the Secretary allowing for their continued 
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downstream evaluation by CMMI and CMS. Also, included in model evaluations are areas 

where unintended incentives exist for providing unnecessary or inappropriate care. These 

potential shortfalls are discussed with submitters for clarification and persistent concerns are 

included in the written recommendation to the Secretary. To date, the models PTAC have sent to 

the Secretary for potential limited scale testing have not been approved. In addition, we are 

unclear whether, because of the extensive review process already provided by the PT AC, 

submitters can undergo a more expedited review and evaluation process. Our concern is that if 

we are not able to support our recommendations or work to fix any shortfalls in our analysis the 

value of the PTAC process will not be realized. We believe that closer coordination between 

PTAC and CMS and CMMI will enable greater efficiency, greater capacity to implement more 

innovative models, and greater clarity for applicants seeking to understand the process of 

submission and approval and look forward to continued partnership with CMS and CMMI. 

In closing, PTAC is an increasingly important forum to identify innovative models from the field 

to expand Medicare's payment model portfolio and increase opportunities for physicians to 

transform care and payment. PTAC is receiving innovative proposals from providers about ways 

to make care better, reflecting leadership and readiness for change. Medicare is leading payment 

reform and can catalyze private sector participation in multi-payer models to accelerate this 

transformation. Payment change can reduce burden on physicians and clinicians enabling them 

to provide optimal care by removing barriers. The good news is that changes have already been 

made and are showing signs of success- both in terms of cost savings and quality 

improvement. Some complain thatthe changes are not big enough or fast enough, but this 

critique should be viewed through the lens that shifting our payment system from fee-for-service 

to one based on value must be done right if it is to be sustainable. Transforming care delivery, 
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including implementing innovative payment policy, is complicated. Therefore, an open public 

process that includes all stakeholders and simultaneously works to achieve consensus whenever 

possible, and which also educates stakeholders and the public in the process, is likely the best 

way forward even if deliberative. We believe the PTAC is well suited for this purpose, we 

commend Congress for its vision, and we thank you for the opportunity to be part of such 

important work. 
22 

Mr. BURGESS. The Chair thanks both of our witnesses for their 

testimony this morning. We will move to the question portion of 

the hearing and I am going to recognize myself for 5 minutes for 

the first round of questions. 

And Dr. Bailet, it is my understanding that during the summer 

you communicated with the Department of Health and Human 

Services identifying a number of opportunities where your group 

can provide or improve payment model development and I think I 

heard in Ms. Mitchell’s testimony the answer to this question, but 

I am going to ask you. 

Does PTAC need authority to specifically authorize its ability to 

provide technical assistance through the APM development process? 

Dr. BAILET. Under the statute, MACRA remains silent on whether it gave the PTAC the authorization to provide technical assistance. As we said in our testimony, there are significant interests 

by PTAC members to provide technical assistance. As I said earlier, there is some very skilled, highly talented folks who really understand how to build these models both clinically and also on the 

financial business side and the measurement side to make them 

successful. 

We also understand that the PTAC has a role to play relative to 

evaluating models and providing technical assistance does cause 

potential conflicts. If you think downstream, supporting particular 

stakeholders and we then at the same time evaluate their models, 

depending on how that turns out you can see that there could be 

some downstream complications. Despite those challenges, we still 

believe at a minimum that we should because of our exposure and 

the insights that we gain from working with clinical stakeholders, 

we think we can be at a minimum a beacon to cast the light on 

particular areas that submitters are struggling with or are challenged that the global stakeholder community can learn from. And 

I think that is at a minimum a role the PTAC should play. 

I do think to answer your question directly that this question of 

can the PTAC provide technical assistance that needs to be answered definitively and so we would look to you for clarity on that. 

Mr. BURGESS. And are you free to disclose your communications 

with the Department of Health and Human Services this summer? 

Were they positive in their comments toward you or—— 

Dr. BAILET. Yes. Yes. We sent Secretary Price a letter. We have 

had private conversations with him as well. Very supportive, understands the importance of technical assistance. Again we have 

spent a year before we accepted our first proposal standing up the 

committee, building in a process. We want these models to be successful, but stakeholders, depending on their level of sophistication 

and experience and the infrastructure investments, they come at it 

from different places. This is new and we are all learning. 

So I think it is absolutely paramount that technical assistance be 

delivered. I believe the word we got back—and I will let my colleague speak as well that the receptivity for technical assistance 

exists. I think the mechanics of how it would be distributed, how 

it would be identified, and how it would go out to the stakeholders 

that remains an open question. 

Mr. BURGESS. Very well. 

23 

Ms. Mitchell, did you have something to add to that? 

Ms. MITCHELL. I would only underscore the demand we are hearing from across the country. Again physicians understand clinical 

care delivery, but a lot of this work in incentive design risk management is new. PTAC has recognized the urgency of this. We do 

not have clear authority to address it. We think that somewhere 

HHS needs to find a way to meet the needs of providers so that 

they will be successful. 

Mr. BURGESS. OK, thank you. Thank you for that observation 

and the acknowledgment that it may require legislative activity not 

just administrative activity. 

So I am going to ask you a question. I mean it comes up all the 

time, the hiring freeze that the administration has imposed across 

all levels of the Federal Government. Is your PTAC, is it currently 

subject to a hiring freeze? 

Ms. MITCHELL. It is our understanding that they are subject to 

a hiring freeze. I think it is also important to note the volume of 

activity which I think is an indicator of success of PTAC, but it has 

also been more than we have anticipated in terms of time demands. This is again also highly technical, complex work, and I 

think having the right staff is critical. We have had excellent staff 

support. We just think that given the demand there is need for additional support. 

Mr. BURGESS. Very well. We previously asked the administration 

to evaluate an exemption for PTAC and we will continue to communicate with them. 

Just to my last few seconds, I just want to make the observation. 

I downloaded the application form and, man, it is lengthy. I was 

actually going to provide a little technical advice that there ought 

to be a worksheet or a checklist. Actually there is one, but it is 

way, way deep in the weeds here. Maybe that ought to be advanced 

to right after the table of contents. 

Ms. MITCHELL. Well, we appreciate the concern and we recognize 

that it is lengthy. However, the committee really felt that it was 

our job to make the instructions as clear as possible and as complete as possible, so we are hopeful that this is actually a helpful 

document. You will note that there is even visuals in there to explain the process. 

Mr. BURGESS. Right. 

Ms. MITCHELL. Again this is meant as a tool for assistance to 

submitters. Dr. Bailet? 

Dr. BAILET. I think the only other comment is as we design this 

we really put ourselves in the eyes of the stakeholders. 

Mr. BURGESS. Sure. 

Dr. BAILET. And we were thinking this is new, our process is 

new. We wanted to be entirely transparent. And if you look at the 

document, it is constructed—there is a lot of definitions. Every 10, 

all 10 of the criteria are spelled out through the lens of the committee what is it that the criteria is trying to accomplish, what is 

the committee looking for to see in these proposals, because again 

I will go back to my earlier comment. We want these proposals to 

be successful. 

We also are taking feedback from the clinical stakeholders about 

our process. They have provided input and we have revised our 

24 

process based on that input and we will continue to do so and we 

will take this comment under advisement as well. 

Mr. BURGESS. I am sure we will have continued conversations. 

My time has long since expired. I will recognize Mr. Green 5 minutes for questions, please. 

Mr. GREEN. Thank you, Mr. Chairman. I think we would be 

happy to work with you to see what we can do. We don’t want to 

have this process fail because we don’t have staff or quality staff 

or that you can’t provide assistance. That just seems silly. But we 

will be glad to work with you on that to see how we can do. 

Dr. Bailet and Ms. Mitchell, thank you for being here today and 

your insights. I would like to ask about PTAC’s mission and what 

you have set out to accomplish. From my perspective, PTAC and 

the PTAC process, evaluating Physician-Focused Payment Models 

is uniquely in the delivery system reform context because it is driven primarily from the ground up by providers. Now does PTAC fit 

within the broader delivery system reform efforts? 

Ms. MITCHELL. Thank you. I think what one of the consistent 

themes that we hear from submitters, and we have experienced in 

our day jobs, is that there are many clinical improvements that 

providers know could be made that would make care better for patients, and the current payment system is actually a barrier to 

making those changes. Many physicians will tell you they will lose 

money trying to do the right thing in many cases. The pay-for-service system often incents duplication, redundancy, overuse. 

So this is actually a forum, in my view, where clinicians can 

bring models for better care and hopefully have a payment system 

that supports those changes. 

Mr. GREEN. Well, and that’s what I hear from my physicians that 

they are concerned about the end result so they want to have the 

input. And the unique benefits and challenges does have a model 

or, you know, challenge. 

But from my understanding PTAC is comprised of 11 members 

appointed by the Comptroller General. Each of these members are 

nationally recognized for their expertise in payment and reform 

and Alternative Payment Models. PTAC’s members include both 

physicians and non-physicians. 

I know it has been official for having both physicians and nonphysicians there because they can get the process moving, how 

does your review process engage stakeholders and the public along 

each step of the way? 

Dr. BAILET. So we have a multistep process and if you will indulge me I will walk the committee through it as quickly and efficiently as possible. 

So working with the ASPI staff using our primer on how to submit a model, the model is submitted to the committee formally 

after a letter of intent is sent 30 days in advance. And the only reason the letter of intent, it is non-binding, but it just helps us staff 

appropriately. We need to know how many models are out there 

and potentially coming in and that was the purpose of that letter 

of intent. 

When the proposal is submitted, the ASPI staff check it for completeness to make sure that all of the appendices and the references in the document is complete. At that point the model is 

25 

transitioned to a review committee which is comprised of at least 

one physician and two other members of the committee to review 

the contents of the proposal and then they go about working with 

the stakeholders, the submitters directly. There is a question and 

answer. Typically it is at least one pass, if not two or more, in writing, an exchange for clarity on particular points in the model and 

then we have, we host a call with the submitters for additional 

clarity. 

During this entire process the proposal is published for the entire 

stakeholder community nationally to see. We get comments from 

the stakeholder community globally either in writing, we also have 

them come to our deliberative meetings in public and make public 

statements about their concerns, questions, or support for the models. 

Following the exchange between the stakeholder submitter and 

the PTAC review team, we then go to the national expert clinician. 

We have, if it is on renal disease we will speak with a qualified 

renal nephrologist to get their perspective on the elements of the 

model and it helps sharpens our focus and answer our questions 

that we still may have about the model and the proposal and how 

does it work in the real clinical environment, if you will. 

All of this time, the full committee does not deliberate. As a 

FACA committee all of our deliberations have to be done in public. 

So the proposal review team creates a document after all of their 

work on their recommendation based against the criteria of the secretary. It is non-binding, but it is directionally helpful for the full 

committee when we sit down for the first time in our public session 

to then deliberate and review. 

And if I could, that particular session how it starts is the review 

team reviews the model for the committee, we then invite the 

stakeholders up to the table. They either, so far they have been all 

coming in public. They have been coming to the public meeting. 

They then have an exchange. That typically can go on for an hour 

where we talk with them about questions that we have or sharpen 

our focus on the model before we deliberate because we want to 

make sure we understand the nuances of these models. 

We also have public comments come before we start to deliberate, so then the public comes up, they provide their input, and 

at that time the committee goes into the deliberative mode. We discuss the model amongst ourselves and then we vote against the 10 

criteria on an individual basis. So it is, we support it—well, we 

don’t support it, it doesn’t meet the criteria, it meets the criteria, 

or it meets the criteria with priority. We do that through all of the 

criteria and then we vote on the model in general at making the 

recommendation to the Secretary to support, to support with high 

priority, or to support it with limited testing. 

That is the process, and it is exhaustive. And we are really 

happy to be part of it, but it takes a lot of energy to get it done. 

Mr. GREEN. Thank you, Mr. Chairman. I know I ran over, but 

these are issues that again we don’t want to come here 5 years 

from now and have to see what we didn’t do now. 

Dr. BAILET. Right, thank you. 

Mr. GREEN. So I appreciate your explaining the process. 

26 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair now recognizes the gentlelady from Tennessee, 5 minutes for questions, please. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And I want to stay 

kind of in that same vein where Mr. Green is, because one of the 

things I think many times we will do is something gets passed, it 

gets on the books, it takes forever to get it straightened out. And 

when we are looking at the APMs and the utilization of technology 

in this process, it changes so quickly that there has to be a 

nimbleness that we have not seen before. And I assume that each 

of you agree with that because you are shaking your heads in the 

affirmative. 

But let’s stay right with you, Dr. Bailet, and let me have you talk 

a little bit more about timeline, a little bit more about process. And 

Ms. Mitchell, I want you to weigh in on how we are, when you have 

this integration, if you will, the physician, which is an incredibly 

important component of this, and the other two stakeholders that 

are involved in this process, talk to me about how that relates to 

our rural and underserved areas. 

Dr. BAILET. So I will start with the timeline and the process. We 

are very sensitive and acutely aware of the need to get these models in the field. Physicians are being measured as we speak today 

for payment that will impact them a year and a half, 2 years downstream, so we did not want to be a rate-limiting step as these models came forward. We measure our, as we move through that process that I described those measurements are done in weeks. It typically takes about 2 weeks for us to get back to the stakeholders 

with a series of questions. 

Mrs. BLACKBURN. So basically you are doing an expedited process 

in approving as you go? 

Dr. BAILET. Yes. We don’t—well, because of our public schedule 

because we can’t deliberate in private—— 

Mrs. BLACKBURN. OK. 

Dr. BAILET [continuing]. The deliberation, we batch them. So we 

have a meeting next month. We have seven proposals. We are 

going to go through 3 days of public meetings. 

Mrs. BLACKBURN. All right. And then let me stop you right there. 

Ms. Mitchell, talk about this as it relates to the rural and underserved areas and how you are feeding in that data, because data 

is essential to this. 

Ms. MITCHELL. Certainly I will try. I think it has been very important that there is a balance on the committee of physicians and 

non-physicians and I am one of the non-physicians. My background 

is actually working with multi-stakeholder groups at the community level for transforming care and payment. 

I am from Maine. I am highly sensitive to the small and rural 

issues. I think what we are—because we are receiving proposals 

from the field, we are receiving proposals from small practices. I 

believe you will hear that on the next panel. We are, I think, as 

a group we are a diverse group. We are committed to ensuring that 

everyone can succeed under this model and that is actually one of 

the reasons that we are particularly urging technical assistance so 

that it isn’t just the well-resourced health systems that can afford 

these changes. 

27 

Mrs. BLACKBURN. So you are deliberate and intentional in having 

individuals from these rural and underserved areas? 

Ms. MITCHELL. We don’t actually control who comes to the committee, we respond to the proposals that we receive. However, we 

are certainly trying to promote the opportunity and we certainly 

welcome and weigh the issues of small and rural practices to the 

extent possible. 

Mrs. BLACKBURN. OK. And let’s look at the high-performing hospital or health systems and medical groups and just a couple of 

comments quickly—I have a minute left—on how you characterize 

those groups’ interest in risk assumption. 

Dr. BAILET. The larger, more sophisticated integrated systems 

they have already made the infrastructure investments whether it 

is electronic health record, they have the modeling, they have the 

data analytics, the population health tools that really help them be 

successful in an Alternative Payment Model environment. 

And so they are very much, they are ready and willing, and some 

of them, many of them across the country, are already in alternative or Advanced Alternative Payment Models, so they are sort 

of leading the way, if you will. That said, I would be remiss if I 

didn’t mention that the smaller practices have a high degree of 

nimbleness that the larger practices don’t necessarily have, and 

can move very quickly, but they also need help with the infrastructure. 

Ms. MITCHELL. And if I might just add to that, the small and 

rural practices may be providing exceptional care. We think that 

this might provide greater flexibility to them so that it isn’t again 

the one-size-fits-all approach because we recognize that care will be 

delivered differently in different communities and in different sized 

practices. 

Mrs. BLACKBURN. Right. And that is the nimbleness that I think 

we are wanting to see and the flexibility that we want to see on 

this. And we are not going to be hesitant to continue to do oversight and to pull it back if we think it needs adjustment. 

I yield back, Mr. Chairman. Thank you. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back. The Chair will make the observation that is the third 

time the word ‘‘nimble’’ has been used. I don’t recall that ever happening in a committee hearing before. 

Mr. GREEN. It is tough for Members of Congress to be nimble. 

Mr. BURGESS. The Chair recognizes the gentlelady from California, Ms. Matsui, for 5 minutes, please. 

Ms. MATSUI. Thank you, Mr. Chairman, and I will try to be nimble. So thank you very much for holding this hearing and thank 

the witnesses for being here today. You know, as you know we 

came together in a bipartisan way on this committee to fix the broken SGR and replace it with a MACRA, and I am pleased that you 

are making progress with the goals set forth by MACRA to truly 

transition our Medicare payment system from value to volume. 

As you state in your testimony, Medicare has considerable influence on payment and that can drive innovation. That is what I 

would like to focus on today. Every witness here is testifying to the 

hard work providers are putting in to update their systems of care 

and develop payment models that adequately reflect that. We are 

28 

hearing about care coordination, patient-centered care, and better 

management of chronic diseases. 

I believe that technology whether in the form of data systems, 

measuring quality, interoperable electronic health records, care delivered remotely, or conditions monitored remotely will be integral 

to our success in achieving our goals of higher quality and reduced 

costs. Thank you, Dr. Bailet and Ms. Mitchell, for your leadership 

on PTAC and I appreciate the dedication you bring to your work. 

I would like to focus on this issue of telehealth and health IT. 

The 10th criterion for judging APMs is to encourage a use of health 

information technology. Either one of you or both of you, can you 

expand upon that? How does the PTAC ensure that models are encouraging the use of health IT? 

Dr. BAILET. I will start. It absolutely is essential, especially when 

you realize the diversity of the care that is delivered across the 

country and the shortages in particular areas where certain specialty services, for example, are not available. So leveraging technology is absolutely essential. 

You mentioned telehealth, making sure that patients, members 

have access to high-quality specialists through telehealth. There is 

a lot now with technology with your smart phone and a lot of diagnoses can be made using your smart phone, for example. So we 

need to leverage that technology and we embrace the submitters 

who put technology in front, embed that in the model. 

There are some challenges with that and the Secretary has commented about proprietary technology, because that obviously limits 

the deployment and the implementation of these models, but the 

notion of leveraging technology to drive care into the communities 

is absolutely essential. 

Ms. MATSUI. OK. 

Dr. BAILET. Getting everyone on a health information platform 

and, as you know, being from California, my organization with also 

Blue Cross—— 

Ms. MATSUI. Sure. 

Dr. BAILET [continuing]. We have built an HIT platform with 

over 25 million records. So we—— 

Ms. MATSUI. Can I ask you this, then? So I assume health IT, 

electronic health records, devices that remotely monitor, clinical decision support software, software that helps clinicians on a team 

communicate securely and to allow providers to deliver care remotely, it includes all of this. So are there experts on the PTAC 

that specialize in health IT or have extensive experience with it? 

Does PTAC consult with such experts? Because I know you have 

a balance of people on there, physicians and non-physicians. 

Ms. MITCHELL. I think to your point, there is a range of expertise, users of EHRs and other health IT and some of us who have 

been working around data sharing. I would like to emphasize our 

deliberations on this criteria. Technology is important but it is also 

insufficient. This is really about sharing the data freely and effectively across sites and many of the barriers to doing that are not 

technology barriers, they are business or otherwise. 

So I think it will be very important particularly as we move to 

measures of population health and also to reduce the burden on 

29 

providers that this data be shared effectively regardless of the technology. 

Ms. MATSUI. So you have, of the 20 or so models you have under 

review can you provide some examples of those that are leveraging 

technologies, and have the providers come up with creative solutions? 

Dr. BAILET. So there are several that have been highlighted that 

we have reviewed already. There is one specifically around looking 

at five different cancers and accuracy of diagnoses—lung, 

colorectal, breast. It is a bundled payment model. It comes from the 

Hackensack Meridian Health. They have a special technology that 

looks at the biopsies themselves and is able to do genetic analyses 

and helps tailor the treatments to the specific characteristics of 

that particular tumor type. We talked about the proprietary nature 

of that technology and they have assured us that other systems can 

adopt either that technology or a sister technology like that. But 

that is just one example. 

Ms. MATSUI. Sure. 

Dr. BAILET. There are several others. 

Ms. MATSUI. No. 

Mr. BURGESS. The gentlelady’s time has expired. 

Ms. MATSUI. Thank you. I yield back. 

Mr. BARTON [presiding]. The gentlelady yields back. The Chair 

recognizes himself for 5 minutes. I want to say at the beginning of 

my question period that I am not an expert on this, and I didn’t 

hear the opening statements, so if this were an energy hearing I 

would be in good shape. But talking about MACRAs is, as I told 

Gene Green, a little out of my depth. 

My first question is just a basic question. We wanted to change 

the payment system because the old one was so complicated. Are 

any of these new systems actually being used right now, or are you 

just thinking about it? Either one of you. 

Ms. MITCHELL. The models that we have received, several of 

them we have recommended for further testing, but then it is up 

to CMS and the Secretary when and if to implement those. So—— 

Mr. BARTON. As we speak, all the payments are still being made 

under the old system; is that correct? 

Ms. MITCHELL. Well, there are demonstration projects that CMS 

has implemented over the last several years that do change payment, but the Physician-Focused Payment Models that we have 

evaluated have not yet been implemented at least through CMS. 

Mr. BARTON. All right. And Dr. Burgess told me that you have 

actually voted on five alternative systems; is that correct? 

Dr. BAILET. Yes, five. We have deliberated on six, voted on five, 

with recommendations to the Secretary. 

Mr. BARTON. OK. Now these five all passed, so to speak, so they 

have been forwarded to the Secretary, or did you vote down any of 

them? 

Dr. BAILET. We voted two down. And then the reason we deliberated on six, the sixth submitter retracted their proposal after 

hearing the point of view of the committee. They are—resubmitted 

it for after they have modified it, but the others were either recommended for small-scale limited testing or implementation. 

Mr. BARTON. So you forwarded five to the Secretary—— 

30 

Dr. BAILET. Yes. 

Mr. BARTON [continuing]. Which we don’t have right now. 

Dr. BAILET. That is correct. 

Mr. BARTON. But there is somebody active, I guess. The Secretary or his or her designee decides if these systems that you 

voted on are acceptable for the marketplace; is that correct? And 

then if he passes it then it comes back and doctors pick which one 

they want to use. Is that how it works? 

Dr. BAILET. Well, that is part of our challenge is we see this, we 

want to be a value-add to the system. We are upstream of CMS 

and CMMI. We want to make sure that the process and evaluation 

and the analysis that we are providing sharpens these models so 

that when they get downstream to CMS and CMMI it helps them 

do the work they need to do relative to analysis and figuring out 

how to actually stand up these models within the current Medicare 

system. 

Mr. BARTON. Well, to me that seems overly complicated. Now it 

may not be, but I want to try again. Somebody is going to—your 

doctor groups have voted on systems that they want to use, right? 

Dr. BAILET. Right. 

Mr. BARTON. You have forwarded those to the Secretary of 

Health and Human Services. The Secretary of Health and Human 

Services and the bureaucracy decides which of those are acceptable; 

isn’t that right? 

Dr. BAILET. That is right. 

Mr. BARTON. If they say, ‘‘We have the HHS stamp of approval,’’ 

it comes back, and who decides which of those to use once they are 

approved? 

Ms. MITCHELL. The only requirement is that the Secretary post 

a public response to our recommendations. It is then up to the Secretary and CMS if and when to implement. 

Dr. BAILET. Our charge is to advise the Secretary, work with the 

stakeholders, make a recommendation, provide that advice. 

Mr. BARTON. I got that and you have done it. 

Dr. BAILET. Yes, sir. 

Mr. BARTON. You are waiting on the Mt. Olympus approval, 

right? Sooner or later some of these are going to be approved. My 

question is once they are approved—I guess I will rephrase it. How 

are they implemented once approved? 

Dr. BAILET. And again, that is, we need more clarity on how that 

is going to happen. That is not under our purview. We are ready, 

willing, and able to partner with CMS and CMMI. 

Mr. BARTON. Well, who is the decision maker? 

Dr. BAILET. The Secretary and HHS. 

Mr. BARTON. OK, I am saying they have approved it. I mean at 

some point in time somebody in the system, a doctor who is seeing 

patients—— 

Dr. BAILET. I get it. OK. 

Mr. BARTON [continuing]. Says OK, we are going to switch from 

this old system to this new system A. 

Dr. BAILET. Right. 

Mr. BARTON. And I am assuming since we are trying to be inclusive that is a hospital, a region, a State, somebody says yes, we are 

going to use alternative system A. 

31 

Dr. BAILET. Right. So that is where just like in CPC+ or some 

of the other models, the Alternative Payment Models that have already been deployed, the Oncology Care Model, for example, that 

is what CMS will do. They will take our recommendations. They 

will look at these proposals. They will refine the model and figure 

out how do we build this model with these concepts and be able to 

implement it within the Medicare payment system. They will put 

it out there, I believe. 

I don’t want to speak for them, but my guess would be that they 

will take these models, put them out there for the physician—— 

Mr. BARTON. They. They being—— 

Dr. BAILET. CMS and Medicare, put in Alternative Payment 

Models saying—— 

Mr. BARTON. So CMS is the one who chooses which model to use? 

Ms. MITCHELL. We don’t have the authority to direct CMS to do 

that. We can make recommendations. 

Mr. BARTON. So they are going to tell you which model to use. 

Dr. BAILET. Or not. 

Mr. BARTON. See, I had it all wrong. I assumed the doctor 

groups, the providers would choose which one they want, but you 

are saying CMS is going to say, ‘‘We like this one.’’ 

Dr. BAILET. Well, CMS will make the models available for the 

stakeholders to then sign up to deploy. So they will, just like the 

Oncology Care Model, it is out there and practices will sign up to 

participate. 

Mr. BARTON. And they can make more than one model available? 

Ms. MITCHELL. Yes. 

Dr. BAILET. Yes. 

Mr. BARTON. OK, because I thought the whole point of this was 

to give doctors or—I keep saying doctors—to give providers—— 

Mr. BUCSHON. Will the gentleman yield? 

Mr. BARTON. I would be happy to yield. 

Mr. BUCSHON. I think what you are trying to get at, if you 

don’t—if there is an Alternative Payment Model that has been approved and you don’t participate in that, then you are in MIPS. 

Dr. BAILET. Right. 

Mr. BUCSHON. So you can at that point it seems to me you are 

not necessarily forced to accept the Alternative Payment Model, but 

if you don’t you have to participate in MIPS. Is that—— 

Mr. BARTON. What is MIPS? 

Mr. BUCSHON. That is the overall reporting system that assesses 

quality, value. 

Mr. BARTON. The current system? 

Mr. BUCSHON. Well, no. It was put in place under MACRA. 

Mr. BARTON. So it is a new one too. 

Mr. BUCSHON. It is a consolidation of three separate evaluation 

systems that were previous MACRA. 

Mr. BARTON. I am glad I have clarified this situation. 

Mr. BUCSHON. So the point is I think, Chairman, is that a physician if they don’t participate in the Alternative Payment Model 

they will have to be in the MIPS. And you might comment on that. 

I yield back. 

Mr. BARTON. This is the last because our time has expired. So 

answer Dr. Bucshon’s question and then we will go to Ms. Castor. 

32 

Mr. GREEN. I just want to say, Mr. Chairman, you and I could 

talk energy all the time. 

Mr. BARTON. Yes. Energy policy is simple compared to this. 

Would you like to comment on—— 

Ms. MITCHELL. Yes. That is correct. PTAC is actually, I think our 

role is to expand the options for participation so that CMS has a 

broader portfolio that is representative of what physicians think 

would be better models. So we can recommend those for inclusion 

in the Medicare portfolio, but again it is not up to us who participates or if they are implemented. 

Mr. BARTON. We thank and we yield to the gentlelady from Florida for 5 minutes. 

Ms. CASTOR. Well, thank you. And I want to thank you, Mr. 

Chairman, for calling this much needed hearing. And thank Dr. 

Bailet and Ms. Mitchell for your work on the Physician-Focused 

Payment Model Technical Advisory panel and to all of the doctors 

and medical professionals that have also been engaged in this and 

taking this on. 

I am very gratified to see the progress on transitioning to value 

rather than volume, at the same time while we improve patient 

care, allow doctors to practice medicine, and do everything we can 

to help lower the cost. I hear you talking about the difficulty now 

with submissions and approvals and you need answers from CMS 

and CMMI. Would you say that the progress has stalled on your 

work? 

Dr. BAILET. I am not sure I would use the word stalled. I think 

we are new. We are new at the game. And then I don’t mean game 

in a negative way, but I mean this is a new process. We have only 

sent two sort of series of recommendations to the Secretary and, as 

you know, we have an interim Secretary, so I think that people are 

finding their way. 

We are in dialogue with CMS and CMMI. It is a constant, you 

know, it is a constant partnership. We are trying to work with 

them. They are providing insight—— 

Ms. CASTOR. So they, really, it would be helpful if the committee 

held a follow-on hearing with CMS and the folks that are working 

on this to get some of the answers that Mr. Barton asked and Mr. 

Green and others. 

In order to most effectively review the proposals submitted to 

PTAC, MACRA required the Secretary to establish a set of Physician-Focused Payment Model criteria for evaluating the proposals. 

MACRA also required PTAC to then review proposals submitted 

based upon these criteria when making recommendations to the 

Secretary. 

So there are 10 criteria, including the extent to which proposals 

provide value over volume, increase care coordination, improve 

quality, all factors that PTAC considers when evaluating a proposal. Ms. Mitchell, can you describe the 10 criteria established by 

the Secretary, particularly the criteria designated by PTAC as 

high-priority criteria? 

Ms. MITCHELL. Certainly. And if I might just respond very briefly 

to your last question, I think it is very important. We are not seeing any sort of slowdown in number of submissions to the committee. In fact, it is the opposite. We have more proposals than we 

33 

even had anticipated. I think the question about what happens 

next is really the open one. 

Ms. CASTOR. Thank you for clarifying that. 

Ms. MITCHELL. Yes. And in terms of the high-priority criteria, we 

are evaluating each proposal against every criteria, but there were 

certain criteria that the committee thought carried, you know, particular weight. So as an example, scope is a high-priority criteria. 

We don’t think that it is optimal to identify a model that only one 

or two or just a handful of practices can participate in, we are really looking for more transformative models. So scope, as an example, 

meant that we would have greater participation if it was a highvalue payment model. 

The high-priority criteria, quality and cost, obviously the point of 

payment reform is not to change payment, it is to get better care 

at lower cost. So how are we determining if these changes are actually giving better patient care at a more affordable rate? So that 

seemed extremely important in the entire undertaking. 

And then, finally, payment methodology, if Dr. Berenson was 

here he would tell you we are not just looking for an addition of 

a new code. We are talking about meaningful changes in the methodology of payment, and that is what we are seeing. We have had 

some proposals that do not meet that criteria. They could be fixed 

differently, the barriers. We are really looking at models of payment that are currently not supported and require a new payment 

methodology. 

Ms. CASTOR. So, Dr. Bailet, you talked about you have seen some 

innovative proposals. Give us some hope here. What is innovative 

that you have seen? What has been difficult? What has been a little 

less challenging? 

Dr. BAILET. So there was a lot of energy in our last public meeting when we looked at hospital at home. So typically patients today 

show up in the emergency room, they need admission. They have 

criteria to meet admission. And this model has the sophistication 

for select patients to actually treat them as if they were hospitalized but to provide that care in the home. That is tremendously innovative. It is also allowing patients to—— 

Ms. CASTOR. Is that because the medical professionals go there? 

I mean—— 

Dr. BAILET. There is a team that is deployed, there is training. 

But the point is that hospitals are not places—you don’t, you know, 

I am a surgeon and I would tell my patients you want to be in the 

hospital no more than 1 second longer than you need to be. Bad 

things happen to you in the hospital. 

And so this allows patients with the patient and the family to 

make a decision to get that care, but get it at home, safely. We 

think that model shows tremendous promise. There is some economics obviously, but it also is very beneficial when you match it 

against the criteria. It helps the patients specifically and their family to be able to get that care at home. That is just one example 

of several of the models that we have looked at. 

Ms. CASTOR. So out of these models what has been particularly 

difficult? 

Dr. BAILET. Physicians and stakeholders are very, they are much 

clearer on the clinical side of the model. Where we are challenged 

34 

is on the payment side, getting the data to be able to model for the 

committee to say, ‘‘Here is what the data is showing us, here is 

where the dollars are, and here is how the model will impact the 

dollars.’’ That is an area of technical assistance that could help. 

I think Elizabeth wanted to make a comment. 

Ms. MITCHELL. I would just add, several of the models we have 

seen are communitywide. As an example, how do we bring in hospice care, transportation, other services that patients actually 

need? And there is a major barrier of sharing data and information 

effectively in a timely way. 

So that—and a provider has said that that is their primary barrier to implementing the models that they are bringing—so that 

continues to be just a priority area that we have got to solve. 

Ms. CASTOR. Great. Thank you again for your work. 

Dr. BAILET. Thank you. 

Mr. BURGESS [presiding]. The Chair thanks the gentlelady. The 

gentlelady yields back. The Chair recognizes the gentleman from Illinois, Mr. Shimkus, 5 minutes for questions, please. 

Mr. SHIMKUS. Thank you, Mr. Chairman. And I appreciate my 

colleague from Florida, because that was one of the questions I was 

going to ask and she picked it up, was highlighting a specific example. And I think you outlined a pretty good example of where you 

can be helpful. I am interested in this is because, you know, I was 

here in ’97 when we passed the SGR to spend my career postponing 

it to the point where then we got to MACRA and MIPS and all this 

other position where we are today. 

Being a competitive market Republican and understanding competition and how that improves, you always get a little—I am concerned. The Government is such a big payer in the healthcare 

arena, whether it is Medicare or Medicaid, that we really do drive 

that reimbursement. And we drive the reimbursement because I 

mean, actuarially, those two are mandatory spending programs 

that are actuarially challenged. 

So then we, how do we look at trying to save the money, but we 

know docs want to get paid, right? We know docs want to get paid 

well if they can, so I think this is an interesting debate because 

doctors still want to be compensated for their training, their loans, 

and the like while we are trying to drive efficiency and lower costs. 

And that is your challenge that and you are an advisory committee or commission and you are advising the Federal Government on how we might be able to do that. And you gave us an example of one just in the last testimony, but I am concerned about 

the—you talk about telemedicine, sharing data, part of that is proprietary information. Part of it is going to be patient records. Part 

of it is going to be specific care models that practitioners may want 

to say, ‘‘This is how I can financially do it. This will drive patients 

to me, but it gives me a competitive advantage,’’ right? 

So how are you doing this? I mean how are you, or just let’s do 

it in a big data framework, big data, and thank you for helping me 

remember the word, an algorithm. I mean how do—and we are 

going to have these big discussions on the algorithms and transparent, how do you do transparency on algorithms when someone 

feels that that is a proprietary nature that they have come up 

with? 

35 

So those are the questions that I am interested in hearing as you 

are trying to provide advice and counsel, because some of this stuff 

might require either proposals from HHS or maybe legislative 

changes. Can you guys—Ms. Mitchell, do you want to say anything 

based upon my little diatribe? 

Ms. MITCHELL. I will try. We have actually had proposals that 

do include proprietary elements, and I think we have been clear 

with submitters that anything that is included in a proposal for 

Medicare they won’t have proprietary elements that couldn’t be 

shared more broadly. Again this is an entirely voluntary process. 

They could do this without Medicare as well. I think it would be 

helpful probably to ask the next panel about some of their experience with that. 

And I think it is going to be a balance of interests. I think given 

the massive investment that we put into our healthcare system and 

the value for patients we are trying to achieve, I think there is just 

going to have to be a balance of obviously preserving the interests 

of all. I also think that there are success stories around the country—Oklahoma, Oregon, others—where there are sharing data 

across the community in a way that protects privacy. They are 

clearly effective stewards of that data. But it also allows physicians 

and others to have a full picture of population health and patient 

care and, frankly, it helps with patient safety. If a patient is admitted from one hospital to another and those records can be quickly 

transferred, that actually helps patient safety as well. 

So there are ways that this is being done around the country now 

that could be emulated and scaled. 

Mr. SHIMKUS. And I appreciate it. And I think also just in the— 

and I am going to close with this brief statement is I mean there 

is a national debate about how we pay for health care and will it 

be a one-payer system or will it be a competitive market model that 

helps bring clarity and efficiencies? 

So good luck, I am not sure how it is all going to turn out. I yield 

back the balance of my time. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair appreciates the gentleman’s request for good 

luck. The Chair recognizes the gentlelady from California, Ms. 

Eshoo, 5 minutes for questions, please. 

Ms. ESHOO. Thank you, Mr. Chairman. 

Dr. Bailet, it is wonderful to see you. And thank you, Ms. Mitchell. I have really enjoyed the questions of Members and your responses because you keep deepening and broadening what you are 

doing. 

Several of my questions have already been posed, but I want to 

pick up on what Congresswoman Castor said and recommend to 

the chairman that we have another hearing both with the stakeholders and with HHS, because I think it is important to bring 

that—to strengthen the linkage. 

Since you are dependent upon what, I mean you are doing so 

much work and then it goes someplace else and it seems to me that 

there is a question mark around it. So I am not suggesting, I am 

not impuning the agency, it just seems to me that I don’t have a 

sense of how welcoming they are, especially if the model that you 

36 

are recommending to them is going to cost more, because there is 

a constant push on the agencies not to spend as much. 

So which takes me to a question. You know the area that I represent. It is known as the innovation capital of our country. Most 

people think of it as just in terms of technology, but we have many, 

many of biotechnology companies that are creating really innovative technologies. Stanford Medical Center, I think, is doing important and exciting work around telehealth and telemedicine for the 

treatment of other health conditions such as stroke. 

Specifically, how are new and innovative technologies being integrated into the APMs? 

Dr. BAILET. We have had several proposals that have proprietary 

technology that are embedded, and I gave one example relative to 

the genetic ability to screen the tumor types for personalized medicine, and I believe Stanford is trying to do that work as well. There 

are other information systems, population health systems, that are 

able to look at the entire cohort. If you are in, for example, renal 

disease, look at your patient population and find elements to help 

sharpen the care and offer patients treatments before they start dialysis to improve the outcomes and decrease the chances for complications. 

I am trying to remember, I have all of the 20 in front of me. 

Ms. ESHOO. Well, no. That gives me a flavor. Do you know what 

the cost of a particular application is after you have reviewed it? 

Dr. BAILET. No, we don’t. And that—no, we don’t. 

Ms. ESHOO. So that is up to the agency to cost it out. 

Dr. BAILET. Right, yes. 

Ms. ESHOO. And are providers—I mean money drives everything 

in the world I am sorry to say, but it does. I don’t know what the 

incentive on the part of physicians would be—well, maybe some 

that are highly idealistic, but people have to live, to move away 

from fee-for-service. I think doctors would say, and what do I get 

out of this? And I don’t think that that is a selfish question. 

So do you see in the models that have been submitted to your 

commission that—I don’t know how to put it. Are they based, if you 

put your fingers on the scales is it with anticipation that there will 

be a better system with better money? Maybe that is the best way 

to put it. 

Dr. BAILET. Physicians they want to do the right things for their 

patients. They want to get recognized appropriately for the work 

they are doing. There are certain limitations in the fee-for-service 

system that doesn’t recognize those efforts, and despite those challenges physicians continue to do it anyways. 

These models reframe the way care is delivered. It recognizes 

their efforts. It pays for nurse coordinators. It pays for home care. 

It pays for things that the traditional system doesn’t recognize that 

are incredibly valuable to drive outcomes and lower cost. So that 

is why—that is certainly why I am energized to be in this work, 

and I think my colleagues on the committee would echo that, and 

you will hear that from the stakeholders who are behind me. 

Physicians, again, and clinicians, they want to do the right thing 

for their patients. And yes, their economics have to work, but there 

also has to be, you have to do the right thing for your patients and 

37 

it can’t be completely driven by the economics. But we also have 

to be realistic about that. 

Ms. ESHOO. Thank you very much for important work. 

Ms. MITCHELL. May I just—— 

Ms. ESHOO. It is up to the chairman. You can answer. I can’t 

talk. 

Mr. BURGESS. Please answer. 

Ms. MITCHELL. I would just add that I think all the research including recently from the National Academy of Medicine show that 

about 30 percent of health spending do nothing to improve patient 

outcomes, so there is waste in the system that could be addressed 

through better, more effective utilization that does not in any way 

create barriers for physicians. 

Physicians are trying to navigate those barriers right now. I 

think there is huge opportunity. I think there was a recent GAO 

report that showed we are spending about $40,000 per physician 

per year on performance measurement. There are opportunities for 

savings that actually enable physicians to have more flexibility to 

give the right care at the right time. 

Ms. ESHOO. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back. The Chair recognizes the gentleman from Missouri, 

Mr. Billy Long, 5 minutes for questions, please. 

Mr. LONG. Thank you, Mr. Chairman. 

And my questions are for both of you. And, Ms. Mitchell, I will 

start with you. And this first one might sound like an oxymoron, 

but can you each elaborate on why it is important that physicians 

not overassume risk in models they may be approaching for the 

first time while at the same time keep pushing forward in their 

drive for physicians to assume risk? 

Ms. MITCHELL. Well, certainly, I think if Mr. Miller were here 

again representing the committee—I don’t think risk is magic in 

any way. I don’t think the assumption of risk will suddenly change 

care delivery, but I think it is a move towards greater accountability and ownership for outcomes. I think what we are trying to 

do is find models that appropriately enable risk and accountability 

certainly without putting a burden that is not manageable or sustainable on physicians, so I think it is a very important balance. 

I don’t know if that answers your question, but we think it moves 

them towards value. 

Mr. LONG. OK, Dr. Bailet? 

Dr. BAILET. So to follow on with Elizabeth’s comments, there are 

unintended consequences. These models have elements that are 

new. Many of them have not been field-tested, if you will, so the 

intent is good, but until you actually deploy the model in the field, 

you are not exactly sure what are the outcomes. Are you going to 

get the outcomes that the model is established to accomplish, which 

is why the committee felt strongly and continues to feel that some 

limited testing is necessary for some models where the elements 

are uncertain or unclear. 

So we need to strike a balance between encouraging physicians 

and clinicians to take risk and to be held accountable and to be recognized for outcomes and paid accordingly, but we also know that 

38 

in the world of in the past with managed care if you push too fast 

too far and you outstrip the sophistication of the clinicians and 

their ability to perform, those are also unintended consequences 

that we need to be careful about making sure that we don’t do anything that is so disruptive that it impugns these organizations. 

And I used the word ‘‘vibrancy’’ earlier, and I used that specifically. I hear a lot of things about well, we want to keep our practice 

viable. I used to run a practice of nearly 2,000 physicians in Wisconsin. I don’t think viable is what is top of mind for patients who 

are seeking care. We want physicians and clinicians to have vibrant practices, to be able to provide the highest quality care with 

the best outcomes. 

And that is where if you outstrip your ability to do well in risk 

you can have an economic consequence that could impugn your 

practice. And when these small hospitals and rural practices go out 

of business, your ability to repair them or replace them are incredibly hindered. And so that is where I want to make sure that as 

we go forward we are very thoughtful about implementing at the 

right pace in the right way. And there needs to be flexibility. Elizabeth said it is not a one-size-fits-all solution that we are talking 

about here. 

Mr. LONG. OK. And since your microphone is still on I will start 

with you on my next question and then we will move to Ms. Mitchell. I would like for both of you to answer this one. But do you believe CMS’s approach in the short term should be more focused on 

ensuring providers are ready to transition to qualified Alternative 

Payment Models or in simply getting more providers into valuebased payment arrangements? 

Dr. BAILET. You told me earlier that you were going to give me 

a tough question. 

Mr. LONG. No, I didn’t. You said I was, I just agreed with you. 

Dr. BAILET. Well, I think, and I am not being evasive, I think it 

is both. I think physicians, as I said physicians are in different— 

and clinicians—are in different states of readiness, and so they 

need to get in. They need to move away from fee-for-service. 

Whether they get in on the Merit-based Incentive Program, which 

has value elements, or they are sophisticated enough or willing to 

get into an Alternative Payment Model, I think physicians have to 

get on the playing field, clinicians have to get on the playing field 

and get in the game. And the fee-for-service model is not sustainable and so this, I think this legislation these efforts compel physicians and clinicians to get on the field. 

Elizabeth? 

Ms. MITCHELL. I would just add that what we are seeing in 

PTAC is the early adopters, the leaders and the innovators who are 

ready to go. And I think by creating that opportunity by allowing 

them to go first with appropriate technical assistance, flexibility, 

and small-scale testing, we will learn a lot and that will enable 

some of the practices who are less ready to actually, I think, succeed as they move forward. 

Mr. LONG. So do you agree with the doctor that both are important? 

Ms. MITCHELL. Both are important, yes. 

39 

Mr. LONG. OK, thank you. I have got a really, really tough question for my next one, but you all are lucky I am out of time so I 

am going to yield back. 

Mr. BURGESS. The gentleman’s time has expired. The Chair recognizes the gentleman from Maryland, Mr. Sarbanes. 

Mr. SARBANES. Thanks, Mr. Chairman. Thank you to the panel 

for being here. A lot of the motivation for the Affordable Care Act 

was to begin to kind of turn our healthcare system towards prevention, primary care, shift the kind of caregiver world to the prevention side of the spectrum, et cetera. 

MACRA was passed separately from the Affordable Care Act, but 

I am curious if you perceive that there is alignment there between 

the goals of the Affordable Care Act and the goals of the new kinds 

of payment methodologies that MACRA is pursuing. 

Ms. MITCHELL. Well, I guess I would say that to the extent that 

the goals of both legislation were affordable care, I think there is 

alignment in the intent. Obviously the Affordable Care Act focuses 

more on insurance and I think MACRA focuses more, and appropriately so, on the fundamentals of care and payment. I don’t think 

you will have affordable insurance until you have affordable care 

and it is going to be these payment and care delivery reforms that 

actually enable that. 

Mr. SARBANES. Thank you. The other question I had is, it gets 

to sort of how—and a number of Members have spoken to this— 

but how the physician community in particular is receiving these 

new models. And I don’t know if you are the right witnesses to describe this, but I am interested in whether kind of the next generation of physicians coming along whether you are seeing that there 

is, first of all, more facility with the concepts, maybe more eagerness to try them. Are medical schools beginning to assimilate some 

of these models into the conversations they are having with the 

next generation of providers? Is there a symmetry with how certain 

cohorts within the physician community are responding to these 

things? 

Dr. BAILET. I think it is highly variable. I mean, I am hoping 

that my colleagues, when they come up and testify, that you will 

hear some specific answers to those questions relative to training 

and the receptivity for the next generation of physicians and clinicians to embrace these models in care delivery. 

I think—and I don’t want to speak for the committee, but from 

my own personal experience—I think there is an appetite for new 

medical trainees who are coming and entering into the clinical 

practice, I think there is an appetite for them to provide the value 

which is the high quality and affordable care. I think they understand the economics that these folks are coming out of school, for 

example, with hundreds of thousands of dollars of loans. 

So I think that they understand that there is an economic consequence if their current employer or their practice is not successful. So I believe that the economic piece is there. I think the clinical 

piece is there as well relative to innovation and training and I 

think there is a willingness to try. I think one of our biggest challenges is there is still the unknown. We don’t know how some of 

these models are going to impact outcomes. And so I guess I would 

leave it at that. 

40 

Mr. SARBANES. Do you feel as though the provider community 

gets that they are living in a new world, if you think they are living in a new world or not yet? 

Dr. BAILET. I think there is probably some vestiges of remnants 

of folks in the provider community that still harken back for the 

fee-for-service environment. And I am not saying that fee-for-service there is not a place for that model in the new world, but I think 

that also there is a high degree of recognition that the value, paying for outcomes, being able to track it, and being able to actually 

deliver on the commitment to provide outcomes is one of the things 

that is in front of us that actually can bend the cost curve. 

So I do think that that is where the collective thinking around 

the provider community is today. As I go around the country I don’t 

hear a lot of debates about, well, we need to go back to just pure 

fee-for-service. I am not hearing that. I think people are now focused on what does it look like, how do we get there, and at what 

pace do we move from fee-for-service to value and how do we do 

it while we are basically practicing in both worlds. How do we navigate risk in one and fee-for-service in the other, for example. 

Mr. SARBANES. OK, thank you. I yield back. 

Mr. BURGESS. The gentleman’s time has expired. The gentleman 

yields back. And speaking for the vestige, the Chair recognizes the 

gentleman from Indiana, Dr. Bucshon. 

Mr. BUCSHON. Thank you, Mr. Chairman. 

I would first like to, I would like to comment on what Ms. Mitchell said about the cost of care coming down as the key to affordable 

insurance. I completely agree on that. That is a big issue. And to 

do that more transparency in the healthcare marketplace as well 

as more active consumer participation in their healthcare decisions, 

including the cost of what they are being provided, is really key. 

As a former cardiothoracic surgeon I know my organization that 

I participate in, the Society of Thoracic Surgeons, they have been 

really pioneers in quality measurement for the last 25 years with 

the STS database. And, Mr. Chairman, I would like to ask unanimous consent to submit their comments on this hearing to the 

record. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BUCSHON. I would like to highlight the STS has designed a 

quality-based payment program specifically related to 

cardiothoracic disease including coronary bypass, grafting, valve repair, replacement procedures, and as well as treatments for lung 

cancer, relying on this database and I would encourage CMS and 

Congress to take a look at that, as they already have. And they are 

actively pursuing partnerships, looking forward to bringing, you 

know, fruition of payment model that could help provide quality incentives and efficiencies to really one of the largest cost centers 

that we have in the Medicare program. 

Ms. Mitchell, according to CMS, only, currently, 5 percent of physicians are in Alternative Payment Models. And I have heard from 

a number of physician specialty organizations that there are some 

Stark Law barriers potentially to participating and succeeding in 

an APM because it prohibits practices from financially 

41 

incentivizing their physicians to follow treatment pathways that 

are related to value that might improve the system. 

Do you think there is any problems there legally in that that are 

preventing some people from participating in APMs? 

Ms. MITCHELL. I am not an attorney and would not want to pretend to be, so I would not be able to answer that question with any 

authority. Perhaps Dr. Bailet has insights. 

Dr. BAILET. No. 

Mr. BUCSHON. Maybe I will ask that for—— 

Dr. BAILET. Played one on TV, right? 

Mr. BUCSHON [continuing]. The next panel. Just there are some 

barriers out there. I am not a lawyer either. I don’t, but we are 

going to be working on trying to decrease the barriers for physician 

participation in APMs. 

Maybe any one of you can discuss the importance of engaging in 

the specialty community in developing APMs. That can be some of 

the more difficult APMs to work to get together. And can you 

elaborate on where you see growth potential in the future for specialists playing a bigger role in these new care delivery models? Dr. 

Bailet? 

Dr. BAILET. Well, we have garnered a lot of interest from the specialists, single specialty societies. You are going to hear from my 

colleague Dr. Opelka about his ACS model. So there is tremendous 

interest and we have a number of specialty-specific models that we 

are evaluating right now. So I think that our interaction with the 

specialty community actually is pretty robust, but again I think 

you will hear that as you get to the next panel. 

Mr. BUCSHON. I suspect that is true. Do you think it is more difficult to put together APMs as it relates to the specialists versus 

primary care or no? 

Dr. BAILET. I haven’t seen that. 

Ms. MITCHELL. I haven’t seen that, either. 

Mr. BUCSHON. Not really? 

Dr. BAILET. No. 

Mr. BUCSHON. OK, good. The other area, and I have a minute 

and 30 seconds to address MACRA, is it will require significance 

guidance by CMS’s physician participation in multiple APMs. Obviously we want physicians to be able to experiment with different 

approaches to improving their practices while also recognizing that 

many APMs being developed by stakeholders are somewhat narrow, centered around a specific disease or condition. 

Can each of you speak to why it is important to allow physicians 

to experiment with different quality-based payments and have you 

thought about this facet of the program as you review the proposals? 

Ms. MITCHELL. So I will try to answer that. I actually think it 

could be very important to participate in more than one model. I 

think at the community level you are trying to align models and 

incentives and not carve out certain groups over here and others 

over there. 

So I think the ability to, as an example, have episodes within a 

capitated payment or an ACO, I think, is an important innovation 

to test. I think there are regulatory barriers right now to doing 

42 

that and I think that is something that warrants further exploration. 

Dr. BAILET. I agree. 

Mr. BUCSHON. Do you have any comments? 

Dr. BAILET. No, no. 

Mr. BUCSHON. I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentleman from Massachusetts, Mr. Kennedy, 5 minutes for questions, please. 

Mr. KENNEDY. Thank you to the chairman. Thank you to the witnesses. Thank you for answering the questions and educating the 

discussion. 

I wanted to get your opinion on a couple of things and build off 

a little bit of the conversation from our colleagues. There are different, I guess, excuse me, a variety of Alternative Payment Models 

that have now been put forth and authorized by CMMI. In your assessment if you had any ideas or suggestions for us, how does 

CMMI evaluate those different models? 

Are there factors there that should be taken into account differently or aspects there that perhaps Congress should be looking 

at that should be accentuated that aren’t fully contemplated there? 

Do you have any suggestions as to how those models or other models might be put together to address the themes that you have 

talked about so far today? 

Ms. MITCHELL. I hope this answers your question. I think that 

there are a lot of lessons from the demonstrations to date. I will 

point to sort of CPC and CPC+, initially, because we have seen, I 

think, real success in some communities because you have aligned 

payers so you have alignment of incentives and measures. So it is 

not just noise, it is everyone is going in the same direction. It is 

a primary care-based model and it requires data sharing across the 

community. 

I think those examples point to successes that could be replicated. I think there are some elements of the CMS evaluation approach that I don’t know that we get information soon enough so 

that we can apply it and sort of rapidly learn and improve and I 

think there are ways to really take lessons earlier and share them 

more effectively to benefit all of the new models and implementers. 

Jeff, would you add anything? 

Dr. BAILET. No, I think that is well said. 

Mr. KENNEDY. Building on that for a second, and one of the areas 

that I have focused on here is the—well, mental behavioral health 

and the integration thereof in primary care. So particularly for that 

model then we have seen issues around the absorption of electronic 

medical records for the mental health practitioners, the sharing of 

that information between primary care and mental health practitioners and obviously concerns about some of the dissemination 

around mental health records. 

What if there is some things that CMS might be able to do there, 

there is some issues there that might actually require a legal 

change. I don’t know if you have any suggestions for us to look at 

given at least in my concerns about the lack of adequacy on a comprehensive care system set up to address those patients that are 

suffering from medical illness across the country particularly with 

43 

regards to Medicaid. And so I don’t know if you have any comments 

on that but would welcome them. 

Ms. MITCHELL. I would personally just state for the record I 

think that is one of the highest priority areas in the country. I 

think that if we don’t address mental behavioral health we are 

missing just a huge need, and integrating that into primary care 

is a very important strategy. 

I think there are very real limits and barriers, some regulatory 

and legal, that keep us from sharing information adequately and 

I think there are also examples around the country where we have 

done that effectively, responsibly, and protecting patient privacy 

but actually getting the information to people who need it for better care. 

I am happy to follow up with you on some of those models—— 

Mr. KENNEDY. I appreciate that. 

Ms. MITCHELL [continuing]. Because you are exactly right. We 

have to address that. 

Mr. KENNEDY. Doctor, anything else? 

Dr. BAILET. No. I agree. 

Mr. KENNEDY. So one of the great things about representing 

Massachusetts is, I am kind of preaching to the converted here, but 

being able to visit particularly those community health centers that 

are on the front lines of some of these issues from, you know, 

partnering with farmer’s markets in doctors writing scrips to farmer’s markets to make sure that their patients are getting access to 

fresh fruits and vegetables to the absorption of medical and adoption of medical-legal partnerships, so that when a patient potentially comes in with an asthma issue that if there is mold in an 

apartment, yes, you can give them an inhaler, but you are not 

going to address the concern because there is mold and an inhaler 

doesn’t cure mold. 

Are there other systemic, you are talking about alignment incentives, what should we be focused on when we start to look at 

issues? You mentioned transportation before which is obviously 

critical. Are there other kind of one-offs here that you think we 

should keep in mind as we try to think of the opportunities and 

challenges of actually trying to reach out to patients and then wrap 

them in this continuum of care so you can get to them and reduce 

the cost of delivery? 

Dr. BAILET. I think there are lots of opportunities, palliative care, 

for example. I mean I think that the data where, you know, you 

follow the economics. So we consume a tremendous amount of resource relative to folks who are at their end of life. We have been 

able to, I have seen models out there where we have been able to 

get the uptick, the average length of stay, for example, in hospice 

which is, I think, nationally, somewhere between 16 and 18 days. 

There needs to be a more concerted effort that should be measured 

in months, not days, if we are doing the good work and want the 

outcomes we would want for that cohort of patients. 

So I think there is tremendous opportunity and, again, I used 

palliative care as an example, but there are others that you also 

raised. 

Ms. MITCHELL. And you are exactly right. That is where the opportunity is to really improve health and reduce costs. We have exVerDate Mar 15 2010 09:55 Oct 11, 2018 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\115X75MACRAOPTIONSPDFMADE WAYNE
44 

amples by members around the country. There are partnerships 

with the criminal justice system and hospitals to actually identify 

much more effective interventions than, you know, another ER 

visit. 

And by doing that coordination, finding out what people’s real 

needs are, typically—housing, transportation, the real upstream social determinants—that is where you are going to really impact 

health. And connecting those services, the providers and that information, I think, is a very big opportunity. 

Mr. KENNEDY. Thank you. I appreciate it. 

Mr. GUTHRIE [presiding]. Thank you. The gentleman yields back, 

and I will now recognize myself for 5 minutes for questions. 

Dr. Bailet, in your testimony you mentioned how Medicare is 

driving market change through the development of APMs. What 

are these trends and what are you seeing the impact is on other 

players, or payers? I am sorry. 

Dr. BAILET. Well, I can speak for my organization that I currently work with, the Blue Shield. We are moving the commercial 

side of the business to value-based pay-for-value. It is one of our 

top priorities in the organization and MACRA actually allows—in 

2019—allows the commercial payers to partner with Medicare and 

put these models in the field. 

So, again, the economics going from fee-for-service to value, paying for outcomes, it not only is the right thing to do clinically, but 

it is also the right thing economically. And as one of the largest 

payers in the State of California contracted with over 50,000 physicians and over 400 hospitals, we are very activated to get these 

practices of the future, if you will, out in the field and we want to 

do it with the stakeholder community, not to them. 

And that is one of the things that that is a tenet of the PTAC, 

which is why we are so transparent. We want to make sure that 

we are right there, lock arms with our stakeholders, and I hope you 

hear that from the folks who are going to come behind us. But it 

is driving market change. 

Mr. GUTHRIE. Do you believe our patients are being affected in 

a positive way with this? 

Dr. BAILET. I do. Again, yes. I do. 

Mr. GUTHRIE. Thanks. I have another question. So it appears 

that many are already responding to practice transformation efforts in commercial markets. Can you speak to the ideal way Medicare can both learn from these private sector efforts and harmonize 

with them to smooth practice modernization? 

Ms. MITCHELL. So I guess I would just say I don’t think providers 

think about their patients based on who pays their care, so to the 

extent that private and public payers can align that will enable 

providers to actually give optimal care across their patient population. To the extent that there are innovations in the commercial 

sector, I would hope that they would share those. 

Often it is very hard to get information on the outcomes of those 

changes. I think they could inform Medicare, and I think Medicare 

coming to the table and joining multi-payer efforts is really an optimal way to accelerate change. 

Mr. GUTHRIE. OK, thank you. And can you comment to the interests of PTAC in the diversity of models, but also those who have 

45 

reached out to you? Do they include large and small rural and 

urban as well as primary and specialty interests? 

Dr. BAILET. Yes. 

Mr. GUTHRIE. Specialty interests, not special interests. 

Dr. BAILET. Yes. And so I think you will hear we have a small 

rheumatology practice that has submitted a model before us that 

we have not evaluated it, it is under evaluation. So we have a 

broad array of medical stakeholders again from the range of small 

and rural practice to sophisticated systems and specialty societies 

like American College of Surgeons, for example. 

Mr. GUTHRIE. OK, thank you. 

I will yield back and recognize Dr. Ruiz for 5 minutes for questions. 

Mr. RUIZ. Thank you very much, Mr. Chairman. And thank you 

for allowing me to waive on to this subcommittee. 

When we passed MACRA in 2015, one of the goals was to increase quality of care and stabilize payments, moving towards payment models that reward high-quality care. One of the options 

under MACRA is for providers to participate in an Advanced Alternative Payment Model under which the physicians accept some of 

the financial risk. However, in just over a year since its creation, 

the Physician-Focused Payment Model Technical Advisory Panel 

which reviews the proposed APMs has received only 19 proposals 

that we have discussed earlier for consideration and deliberated on 

just five of those. So I am concerned we are not seeing enough to 

really make a smart decision on what is going to be the best model. 

And speaking to different physician specialty organizations, I 

have learned that one of the greatest barriers to developing APMs 

are laws that prohibit many of these physician practices from coordinating, collaborating with other specialties while they are trying to develop an APM, much like what Dr. Bucshon mentioned, 

so this means that the groups are not able to test out their model 

to see if it will work in practice. And while these laws are important and serve an important purpose, in this instance they are restricting the development of these payment models, stunting movement towards fully achieving the goals of MACRA. 

What are some of these barriers in general that have inhibited 

different practices and organizations from developing APMs? If you 

can name me the top two barriers and then I want you to name 

the—if you were to recommend us, how would we resolve those top 

two barriers? 

I will start with Mr. Bailet and then I will go to Ms. Mitchell. 

Dr. BAILET. I guess what I would say, I would turn to the second 

row of testimony behind us, the folks who are actually out there 

trying to create these models for our consideration, to answer your 

question relative to those two barriers. 

Mr. RUIZ. OK. 

Ms. Mitchell, do you have an answer or an idea? Because I will 

ask them and I have been speaking with them. 

Dr. BAILET. Yes. 

Mr. RUIZ. But, you know, I wanted to get your perspective in 

being involved as well. 

Ms. MITCHELL. Absolutely. In my testimony I shared that the 

barriers that we have heard most frequently in our first year are 

46 

access to data and technical assistance to design the models and 

opportunity for small-scale testing. So I think those are three 

issues and we have actually asked for congressional consideration 

on each of those. 

So I do think that there are barriers, but I do also think that the 

panel, the next panel will be able to share how they have overcome 

them. 

Mr. RUIZ. So the MACRA required the Secretary to establish a 

set of Physician-Focused Payment Model criteria for evaluating 

proposals. MACRA also required PTAC to then review the proposals submitted based on these criteria when making recommendations to the Secretary. These 10 criterion including the 

extent to which proposals provide value over volume, increase care 

coordination, improve quality, et cetera, can you describe the 10 

criteria established by the Secretary, particularly the criteria designed by the PTAC as, quote, high-priority criteria? 

Dr. BAILET. Yes, we reviewed that earlier but we can go back 

again. 

Mr. RUIZ. Give me the top two, please. 

Dr. BAILET. There is three. 

Mr. RUIZ. Give me the top two. 

Dr. BAILET. Scope, cost, and quality. 

Mr. RUIZ. Scope, cost, and quality. And in the proposals that you 

have reviewed in scope, cost, and quality, what are the easiest criteria for most proposals to attain? 

Ms. MITCHELL. Well, I think all of the proposals that we have 

seen have recognized that we are looking for models that improve 

quality without increasing cost and they have all brought forward 

models that will—— 

Mr. RUIZ. So everybody has been able to meet all 10 criteria easily? 

Dr. BAILET. No. 

Ms. MITCHELL. No. 

Mr. RUIZ. All right, so which are the difficult criteria for the organizations to meet? 

Ms. MITCHELL. Well, I think one of the challenges is sometimes 

that it is not a payment methodology that is actually different 

enough to require an Alternative Payment Model. As an example 

they may just need a tweak in codes or something, a much more 

minor intervention, so it might not qualify as an Alternative Payment Model. That is one example. 

Dr. BAILET. I would say another example that we have found as 

a committee is the care coordination, the ability for physicians and 

clinicians to work with each other across communities, across disciplines, sharing data that we talked about. Those are all contributors to make—— 

Mr. RUIZ. Is it more of a technical difficulty with the electronic 

medical records issues or is it a cultural, a difficulty within different institutions? 

Ms. MITCHELL. I don’t believe it is a technical barrier. I think it 

is more often a business or a cultural barrier. I think that it is certainly possible to share data across platforms and—— 

47 

Mr. RUIZ. What would you recommend we do to improve collaboration across the different institutions and specialties so that we 

can get better models? 

Ms. MITCHELL. I think that we are seeing that. I think that the 

proposals that are coming forward are actually laying out ways to 

collaborate more effectively. I think that there can be incentives for 

data sharing. You can have data standards so that it is possible to 

share data across platforms, and you could actually ask the vendors to ensure that there is no data blocking so that data can effectively be shared. 

Mr. RUIZ. OK. If the barrier is a business model then I think we 

have to look at what are the business incentives for them to work 

together during these APMs, because they also have business 

needs in the short term as well. 

Ms. MITCHELL. Absolutely. And I think that by changing some of 

the incentives that we are actually helping them to find viable 

business models for the right care. 

Mr. BURGESS [presiding]. The gentleman’s time has expired. The 

Chair recognizes the gentleman from Oklahoma, Mr. Mullin, 5 

minutes for questions, please. 

Mr. MULLIN. Thank you, Mr. Chairman. Thank you for both of 

you all being here. As you guys have, you know, been sharing the 

same questions, my question line will be the same too. And I really 

appreciate you all’s patience. As you can tell, the committee is really looking into this. This isn’t something that we are looking to 

stand in the way, we are looking to help to improve and so we appreciate you all being here. 

I represent a very rural district, very, very rural district, and our 

constituents obviously receive care, many of them, from critical access hospitals. Do you think it is time that we explore, target 

value-based payment models for critical access hospitals that recognize the unique needs of rural areas? 

Dr. BAILET. I think, yes, I would agree with that. 

Mr. MULLIN. Ma’am? 

Ms. MITCHELL. Yes, I think so. I think there can be some very 

innovative practices in rural areas, and in many cases some of 

these models may actually allow small rural practices to succeed by 

creating more flexibility and really evaluate—— 

Mr. MULLIN. Which models specifically would you think? 

Ms. MITCHELL. In terms of the models that we have received? 

Mr. MULLIN. Well, and if you are talking about ways to look at 

the value-based payment structure how would that look like? What 

would we be needed to push from this point of view to make it? 

Dr. BAILET. Well, my experience with critical access hospitals in 

small rural communities, my former practice was in Wisconsin, getting specialty care to these small hospitals, allowing patients to get 

the care they need at home or in their local community rather than 

have to travel great distances. So using technology, telehealth, 

telepsych, for example, psychiatry, behavioral health at the bedside, neurology, it is often difficult to get those services, the actual 

practitioner, on the campus of these smaller hospitals. 

Mr. MULLIN. Right. 

Dr. BAILET. But if you can leverage technology like teleneurology 

where they can actually be at the bedside with cameras and do the 

48 

analysis that they need for patients who are having a stroke 

whether they are going to administer treatment there or transfer 

the patient, those are the kinds of things that these models will 

support, will stand up and recognize and pay for. 

Mr. MULLIN. Have you looked at what Alaska is doing within the 

IHS? You know, they are extremely, obviously, rural and IHS has 

their own issues, their own problems, which, you know, we are 

working through that on a task force. Being Cherokee myself, I understand, you know, very well. But Alaska has seemed to be ahead 

of telemedicine, where, I mean, they just don’t have that access to 

the care, that it is not reasonably for them to be able to get into 

and a lot of dynamics play into, factors play into this when you 

start talking about having to fly people in and out. 

And so they don’t have a choice. They have been forced to do it, 

but they have been successful at it. Are you familiar with it? Have 

you looked at it at all? 

Ms. MITCHELL. Not in any detail. 

Dr. BAILET. No. No. 

Mr. MULLIN. Maybe we—I suggest you maybe taking a look at 

that. Another question, what is PTAC doing to encourage applications in rural and underserved areas? 

Dr. BAILET. So we are again reliant on the proposals that are 

submitted, but I will say, in the first year before the Secretary’s 

criteria were finalized, we had several public meetings with stakeholders across the country and we were very clear and we continue 

to be very clear that we are encouraging small and rural practices 

to submit proposals, that we are receptive to receiving proposals. 

We see that as a significant area of need and we are trying to 

foster everything that we can do relative to our process to make 

sure that we are open and willing and we make it as seamless as 

possible for these smaller practices to compete and build these 

models for our evaluation. 

Mr. MULLIN. So what are some of the barriers? And once again 

we are looking to work with you. 

Dr. BAILET. Right. 

Mr. MULLIN. So what are some barriers that is standing in your 

way from this side? I mean because I am assuming if there were 

barriers that you could already take care of you would have already 

done that so there must be something that we are keeping that 

from happening. 

Ms. MITCHELL. Well, again one of the barriers that again keeps 

coming up is the need for technical assistance particularly among 

small and rural practices who might not have the resources. I 

think we do need to find a way to offer that. I think some of the 

measurement systems in some of these models could actually be 

beneficial for small and rural practices or critical access hospitals 

which often have higher patient experience scores. 

They are actually, they might be recognized for the things that 

they are already doing well. So I think looking at measures and 

technical assistance and again the data needs for these practices. 

They can’t necessarily build analytic teams nor should they need 

to. So how can we make it easier, reduce provider burden to actually just have the information they need to give the care that they 

are giving. 

49 

Mr. MULLIN. And just to make a point on when you said a patient’s experience which we put, you know, high value on that 

which I agree is about customer service, but it is also about care 

too. A lot of times the reason why you see that, in my opinion, is 

these rural providers they are personally connected to the individual. 

Ms. MITCHELL. Absolutely. 

Mr. MULLIN. When my father had a major heart attack and actually coded he was right at the hospital. And the guy that was working there who is a good friend of ours knew my dad well and when 

he couldn’t speak, he couldn’t say anything, knowing the personality that my dad typically had, immediately recognized it and it 

saved his life. But I think that we take it more personal, but we 

are getting farther and farther behind. 

And we as a committee really want to help with that and as personally as a Member I want to work with you. If you have ideas, 

if there is something that we can do, if you recognize areas that 

we can push on this committee, please use our office. Use me as 

a resource because I am going to be using you as a resource. Thank 

you. And I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentleman from North Carolina, Mr. Butterfield, 5 minutes for questions, please. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. Thank 

you for convening this hearing today. 

Dr. Bailet, let me just direct one or two questions to you and 

then we will see how much time we have left after that. 

Dr. BAILET. All right. 

Mr. BUTTERFIELD. But first of all, thank you so very much for 

your testimony. Like the gentleman from Oklahoma, I represent a 

small rural community in eastern North Carolina and so I am very 

interested in your comments to him and to others about the challenges facing small rural providers in taking advantage of the 

APMs. And so, I guess, question one would be what proportion, 

what proportion of the 32 letters of intent and the 20 full proposals 

are from small and rural practices? 

Dr. BAILET. I don’t have the number available. It is more than 

one. 

Mr. BUTTERFIELD. You just don’t have it with you? 

Dr. BAILET. I don’t have it with me. 

Mr. BUTTERFIELD. But you do collect the data? 

Dr. BAILET. Yes, we do. Absolutely. 

Mr. BUTTERFIELD. All right. Number two, has PTAC observed 

differences in applications from large practices and small and rural 

practices? Do you discern any differences between the applications? 

Dr. BAILET. Well, the applications are highly variable from application to application. And I think—— 

Mr. BUTTERFIELD. In terms of quality? 

Dr. BAILET. Right. 

Mr. BUTTERFIELD. Quality? 

Dr. BAILET. In terms of sophistication and how they are built. So 

there is clinical sophistication and then there is the policy, payment policy sophistication, and both components need to be present 

for our recommendation to carry weight and to garner our support. 

50 

The area of technical assistance, I don’t want to—I think I would 

be—I don’t want to say that the smaller practices are the ones that 

are needing more technical assistance compared to the larger, more 

sophisticated practices. I am not saying that. 

But we have found in both arenas, in both practice cohorts that 

there have been challenges with their model. More so on the payment side and the data side, not so much on the clinical side. 

Mr. BUTTERFIELD. But you do acknowledge that there is room for 

improvement in many of the applications? 

Dr. BAILET. Absolutely, yes. 

Mr. BUTTERFIELD. From the large practices to the small practices? 

Dr. BAILET. That is correct. 

Mr. BUTTERFIELD. But wouldn’t you acknowledge at least that 

the weight of those, the majority of those are more toward the 

rural practices because of the lack of expertise? I mean we hear 

that every day up here where disadvantaged groups just don’t have 

the expertise to present the quality of proposals that you would 

want. 

Do you communicate directly with the small and rural practices 

about the benefits of technical assistance? Do you let them know 

that it is there for the asking? 

Ms. MITCHELL. Actually one of our key challenges is that we are 

not at this point allowed to offer technical assistance. We have 

made available the resources that we do have, so to the extent that 

the committee can organize data for applicants we are doing that. 

But so far we are limited from what—— 

Mr. BUTTERFIELD. You can’t proactively go out and advertise that 

it is available? 

Ms. MITCHELL. Currently not. 

Mr. BUTTERFIELD. I didn’t know that. 

Dr. BAILET. We are charged to evaluate the models as they 

stand. We cannot provide guidance. We cannot make recommendations on how the models should be reconstructed. That is not in the 

purview of the PTAC and we are careful not to go into the area 

at this point. 

Mr. BUTTERFIELD. All right. Let me try it this way then. Have 

you worked with Health and Human Services to share your experiences with applications and make recommendations about how to 

deploy resources and technical assistance, at least has HHS been 

made aware of this? 

Ms. MITCHELL. Yes. And the committee sent a letter to Secretary 

Price naming technical assistance as a key need for applicants. So 

we certainly weighed in on that need. 

Mr. BUTTERFIELD. Right. I am about to run out of time, let me 

move to a different subject. 

Dr. Bailet, I am acutely aware of many of the health disparities 

that affect African American citizens today. Several of the approved 

APMs deal with chronic disease management like ESRD that disproportionately affects minorities. Can you discuss with me some 

of the APMs that are being considered that would disproportionately affect African American and other minorities? 

Dr. BAILET. We are currently evaluating a model for hepatitis C, 

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51 

cally in front of me, the demographics, but I believe that that is 

another health challenge that just like end-stage renal disease with 

the African American community. So those are two that come to 

mind. 

Mr. BUTTERFIELD. We are out of time. 

Mr. BURGESS. The gentleman’s time has expired. The Chair 

would inform the gentleman that I am getting a copy of the letter 

that the Physician Technical Advisory Committee sent to the Secretary in August and I will make that available to you so that you 

will know the communication that occurred from this group back 

to the agency. 

The Chair now recognizes the gentleman from Florida, Mr. Bilirakis, 5 minutes for questions, please. 

Mr. BILIRAKIS. Thank you, Mr. Chairman, I appreciate it so very 

much and I thank the panel as well. 

I have a few questions for both of you. Can both of you discuss 

your experiences in transitioning to value-based care outside of 

your work on the Physician-Focused Technical Advisory Committee 

and how that has influenced your view on what Advanced Alternative Payments Models can deliver? Now I know that some of 

these things have been covered, but if you could respond I would 

appreciate it. 

Ms. MITCHELL. Sure. Well, I will speak to my experience which 

is quite different from Jeff’s, but I actually used to work in a very 

large health system so I had some experience there as they were 

trying to transition their practices. But more recently I have 

worked in multi-stakeholder groups in various communities from 

Hawaii to Maine where they are bringing together employers, 

health plans, providers, patients, State governments, others, to try 

to come up with payment changes that actually meet all the stakeholders’ needs. 

So is it getting value for the money, is it improving patient outcomes, and are clinicians actually happier providing this care and 

is it better suited, are the barriers being removed, it is actually 

that multi-stakeholder alignment that enables the transition. So 

that is, and we have tried various models, ACOs, bundles, PatientCentered Medical Homes, and implemented those in different communities. 

Mr. BILIRAKIS. Thank you. 

Dr. BAILET. In my experience supporting large physician practices, multispecialty group practices, there is a tremendous amount 

of inertia to work with the physicians and the clinicians to get 

them to change their practice styles and move away from fee-forservice, volume-driven practices to focus more on outcomes. The 

models I have deployed in my former leadership roles relative to 

supporting physicians and clinicians, paying them for quality outcomes, paying them for collaboration with their colleagues, paying 

for their utilization of electronic health record. There has been and 

I think there continues to be some challenges with galvanizing the 

level of interest. 

There is challenges with the data that typically we hear from the 

physicians that as they move away from volume, you know, does 

the data that you are sharing with me that you are now going to 

pay me for accurately reflect the work that I am doing? So there 

52 

is—I think it is washing out—but there was obviously on the front 

end of moving from volume to value a healthy dose of skepticism 

from the physicians. Well, you are going to pay me differently, but 

am I actually going to get paid for the work I am doing? 

So it is very challenging, but I think right now what I am seeing 

is that the mindset of the physician and the clinician is they know 

they need to do it. They know they need to move away from the 

fee-for-service environment and pure fee-for-service, and the question is how do we do it, and at what pace do we do it, and what 

tools are you going to provide me so that you are not overburdening 

my practice? Elizabeth talked about the $40,000 per physician just to monitor 

and track quality, but I would also argue there is another 750 

hours I believe that was in that same study that each physician 

has to devote to monitoring and managing and measuring and reporting quality. I am here to say that as a health plan we had 188 

quality metrics that we were holding our physician community accountable for. I don’t want to get into the weeds, but I am sure you 

think that that is not optimal. 

Yesterday, the board of Blue Shield approved moving to an integrated healthcare association set of metrics, 34, and we are going 

to lead the way in the State and try and get a standardized set of 

metrics, 34 metrics—it is not boiling the ocean—to actually have 

and change outcomes and drive this value and try and take the 

burden away from the practitioners. 

Ms. MITCHELL. And could I just add, I think that that is absolutely essential to not only reducing burden and cost, but allowing 

physicians to accelerate improvement. And the other element of 

that report is that there was only 5 percent overlap in commercial 

plans for using the same measures. If they could do what Blue 

Shield of California did and agree to use a common set, that makes 

life easier for physicians and it can lead to better care at lower 

cost. I think it is just an exemplary move and one that could easily 

be replicated around the country if folks were willing to do that. 

Mr. BILIRAKIS. Very good. We will take a hard look at that and 

I will submit my questions for the record because I don’t have time. 

Thank you, Mr. Chairman, appreciate it. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes Mr. Green of Texas for any concluding thoughts that he might have. 

Mr. GREEN. Mr. Chairman, my concluding thoughts, I want to 

thank you for the work you are doing and I think we just see we 

have a long way to go and we will do what we can to get you some 

resources so we can move it. Again my biggest fear is we are going 

to end up 17 years from now doing what we did with the SGR and 

medical practice is more important than that. So we will hopefully 

get some stability there. And thank you for your work and keep in 

touch with us and let us know what we may be able to do. 

Dr. BAILET. Thank you for your support. Thank you. 

Ms. MITCHELL. Thank you. 

Mr. BURGESS. And I will just recognize myself briefly. 

Dr. Bailet, I do want to, I think it is important to note that you 

all were chartered January of 2016. It took some time to organize 

and staff up, so it has really just been a little over a year that you 

53 

have been at work on this and as someone else pointed out you do 

have day jobs as well. 

So it is, I mean I picked up perhaps on some criticism that you 

weren’t active enough or doing enough. I am actually pleased with 

the work product that is coming through the PTAC right now and 

I believe that we—and then I think I heard your testimony that 

there is more, it appears there is more activity in submissions and 

I think that is good and I think that is important. I think we all 

recognize that there is a tremendous amount of work ahead of us 

on this. 

One of the things that I do feel obligated to mention, when this 

concept for the Physician’s Technical Advisory Committee came up, 

when the legislation to repeal the Sustainable Growth Rate formula was being contemplated, some of us are less enthusiastic 

about all aspects of the Affordable Care Act and there are portions 

of the Affordable Care Act that to me are disagreeable because of 

the coercive nature of the Affordable Care Act. So the individual 

mandate would be one of those things and I am well on the record 

about that in this committee. 

But the Center for Medicare and Medicare Innovation, CMMI, 

which had the ability late on a Thursday or Friday afternoon to 

simply roll out a demonstration product that was going to be 

pushed out to the entire country with no cost-benefit analysis, with 

no randomized clinical trial, I mean this was a problem that I saw 

that we were careening towards. And the Physician’s Technical Advisory Committee in part was created to help us offset what I saw 

was an impending disaster with CMMI. 

Now I think it is very helpful that Ms. Mitchell has pointed out 

the small-scale testing. It might be reasonable to find out if something works before we require every practice in the country to behave that way. CMMI was set up differently. Your model is, I 

think, the correct one because, yes, I was integral in setting it up, 

but still I think your model is the correct one. 

And we acknowledge there are elements of the unknown. This is 

new territory. There are going to be things that we encounter that 

we did not expect. And unlike the Affordable Care Act that it was 

perfect when it was passed and has required no adjustments, this 

I recognize may require adjustments going forward and this committee is going to be nimble about accepting those and providing 

you with the legislative backdrop that you need to do your jobs and 

we thank you for doing your jobs. 

Thank you for being here today. It has been a very informative 

panel, and you are now excused and we will transition to our second panel. 

Again we will thank our second panel of witnesses in advance for 

being here today and taking the time to testify before the subcommittee. Each will have an opportunity to give an opening statement followed by questions from Members. And let me give you a 

moment to get seated, and we will proceed with the introductions. 

Mr. GREEN. Mr. Chairman, before our witnesses leave, I would 

offer again if you want to sit down and work on how we can agree 

to, 7 years later, on the Affordable Care Act, we would be glad to 

do that. 

Mr. BURGESS. I have always been available to you. 

54 

Very good. Again we are going to have each of you after your introductions an opportunity to give an opening statements followed 

by questions from Members. 

So today we are going to hear from Dr. Louis Friedman, the 

American College of Physicians; Dr. Daniel Varga, chief clinical officer, Texas Health Resources; Dr. Bill Wulf, CEO of Central Ohio 

Primary Care Physicians; Colin Edgerton, American College of 

Rheumatology; Dr. Brian Kavanagh, chair for the American Society 

of Radiation Oncology; and, Dr. Frank Opelka, medical director of 

Quality Health Policy for the American College of Surgeons. We appreciate each of you being here today. 

And Dr. Friedman, you are now recognized for 5 minutes for an 

opening statement, please. 

STATEMENTS OF LOUIS A. FRIEDMAN, D.O., FELLOW, AMERICAN COLLEGE OF PHYSICIANS; DANIEL VARGA, M.D., CHIEF 

CLINICAL OFFICER, TEXAS HEALTH RESOURCES; J. WILLIAM 

WULF, M.D., CHIEF EXECUTIVE OFFICER, CENTRAL OHIO 

PRIMARY CARE PHYSICIANS, ON BEHALF OF CAPG; COLIN C. 

EDGERTON, M.D., ALTERNATE DELEGATE, AMERICAN COLLEGE OF RHEUMATOLOGY; BRIAN KAVANAGH, M.D., CHAIRMAN, AMERICAN SOCIETY FOR RADIATION ONCOLOGY; AND 

FRANK OPELKA, M.D., MEDICAL DIRECTOR, QUALITY AND 

HEALTH POLICY, AMERICAN COLLEGE OF SURGEONS 

STATEMENT OF LOUIS A. FRIEDMAN 

Dr. FRIEDMAN. My name is Louis Friedman. I am pleased to 

share with this committee my perspective and that of my national 

organization, the American College of Physicians, on Alternative 

Payment Models under MACRA, specifically a Comprehensive Primary Care Plus program. On behalf of the college, I wish to express our appreciation to Chairman Burgess and Ranking Member 

Green for convening this hearing, for allowing us on the front lines 

of patient care to share our experiences in the transition to valuebased care. 

ACP is the Nation’s largest medical specialty organization, representing 152,000 internal medicine physicians who specialize in 

primary care and comprehensive care of adolescents and adults, internal medicine subspecialists, and medical students who are considering a career in internal medicine. I am board certified in internal medicine and am a fellow of the American College of Physicians. Since 2001, I have been in private practice at Woodbridge 

Medical Associates in New Jersey which has been NCQA-certified 

as a Patient-Centered Medical Home Level 3 since 2008. 

Our practice is small with just four physicians and one physician 

assistant. In the 3 years since our practice started participating in 

the CPCI program and now 1 year into the CPC+ program Track 

2, we have gained significant knowledge with the benefits and challenges of the program. I would like to share my experiences with 

all of you today. Under CPC+ we have expanded our ability to analyze and deliver care and our patients have benefited in many 

ways. 

With the added financial support that the CPC+ program provides, we have been able to offer self-management programs such 

55 

as nutrition classes and dietician visits. These are available free of 

charge to patients and have been well received by many who need 

them. For example, I have had one patient who was six-feet three 

inches tall, weighed 442 pounds, he had a high blood pressure and 

terrible venous insufficiency of the legs, which causes massive 

chronic swelling. He enrolled in our 8-week class and by the end 

had lost 31 pounds. He dropped another 10 pounds in the next 2 

months and his swelling has improved. 

Now this is an extreme example but shows that we can induce 

positive lifestyle changes which in turn can help prevent disease. 

Feedback data from CMS is another tool that we did not have access to previously, but now do as a result of our participation in 

CPC+. Often, patients simply are not aware that many medical 

issues such as upper respiratory infections, rashes, minor cuts and 

bruises, can be easily treated in less expensive urgent care settings 

or office setting often for a shorter wait time for the patient. 

Now we can review the number of patients, our patients per 

quarter who are admitted to the hospital, seen in the emergency 

room, or seen in urgent care centers. Once identified, we hope to 

better educate these patients as to when and when not to seek 

emergency room care. Prior to CPC+ we didn’t have this ability and 

thus had no idea how many unnecessary emergency room visits 

there were. 

Pre-visit planning by ancillary staff and effective monitoring 

within the EHR have helped us to improve our rates of vaccination, 

screening procedures for mammograms, and diabetic eye exams. 

Screening tools for early detection of dementia have helped us and 

at-risk families better prepare to care for their loved ones, and the 

CPC+ reimbursement for managing these patients with this diagnosis has been helpful for targeting this effort. 

On a practice management level, regulations issued by CMS requiring EHR vendors to obtain health information technology certification made it possible to track patient parameters more effectively. Prior to enacting these regulations, EHR vendors had no incentive to create effective dashboards with which we can track patient measures such as blood pressure, blood sugar measurements, 

et cetera. Without this ability there would be no way that a practice could hope to report the necessary measures to the program. 

If this committee and Federal agencies look to improve upon this 

program in the future, I would like to offer some suggestions. First, 

there is a need to simplify the reporting requirements under CPC+. 

As more private payers enter the APM market, one option would 

be to streamline specific metrics across the proposed CMS and private payer models. This would be in line with ACP’s Patients Before Paperwork initiative and the ideas that the college has laid out 

for how to address excessive administrative tasks as well as with 

the administration’s new Patients over Paperwork and Meaningful 

Measures initiatives. 

Another suggestion would be efforts should be made to encourage 

interoperability among EHR software vendors which would lead to 

better electronic communication between medical offices and hospitals. And I would be remiss if I did not acknowledge that there 

is a financial incentive as well to participation. This is needed for 

the practice to maintain the appropriate staff and computer sysVerDate Mar 15 2010 09:55 Oct 11, 2018 Jkt 037690 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\115X75MACRAOPTIONSPDFMADE WAYNE
56 

tems. However, I believe we must continue to move forward with 

value-based coordinated care such as been found in programs like 

CPC+, the Medical Home, and other APMs away from fee-for-service system. 

Given the time and effort our practice has invested over the past 

few years to this end as well as the significant and incremental improvements we have experienced, we plan to continue with this 

model and not return to a purely fee-for-service structure. 

In closing, I would like to note that since 2016, practice participation among ACP members and advanced payment delivery models is increasing, and many more have noted that they are making 

changes to prepare for successful participation in the QPP overall. 

This is the case for both the ACP primary care and subspecialist 

members. Therefore, we in the physician community appreciate the 

opportunity to offer our input on how these models are impacting 

our practices and both in patient care, both now and throughout 

transition. We very much want to be part of this process and provide feedback whenever needed. 

[The prepared statement of Dr. Friedman follows:] 

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American College of Physicians 

Leading Internal Medicine, Improving Uves 

Statement for the Record 

American College of Physicians 

Hearing before the Energy and Commerce Health Subcommittee 

On 

MACRA and Alternative Payment Models: Developing Options for Value-based Care 

November 8, 2017 

My name is louis Friedman. I represent the American College of Physicians (ACP), the nation's largest 

medical specialty organization, representing 152,000 internal medicine physicians who specialize in 

primary and comprehensive care of adolescents and adults, internal medicine subspecialists, and 

medical students who are considering a career in internal medicine. I am board certified in internal 

medicine and am a Fellow in the American College of Physicians. Since 2001, I have been in private 

practice at Woodbridge Medical Associates, Woodbridge, New Jersey, which has been NCQA-certified 

as a patient centered medical home, level 3, since 2008. My practice participated in the 

Comprehensive Primary Care Initiative (CPCi) for three years and is now enrolled in the Comprehensive 

Primary Care Plus (CPC+) program, track two. 

On behalf of the College, I would like to express our appreciation to Chairman Burgess and Ranking 

Member Green for convening this hearing and for allowing those of us on the front lines of patient care 

to share our experiences in the transition to value-based care, not only through existing Alternative 

Payment Models (APMs) but through new ones as well. Thank you for your shared efforts in wanting 

to ensure that these models improve health outcomes while reducing costs, as intended under the 

Medicare Access and CHIP Reauthorization Act (MACRA). 

Today, I am pleased to have this opportunity to share ACP's perspective on MACRA and its ongoing 

implementation, specifically with respect to Alternative Payment Models (APMs), including their 

25 Massachusetts Avenue, NW, Suite 700, Washington, DC 20001~7401 202*261-4500, 800~338-2746 www.acponline.org 

190 N Independence Mall West, Philadelphia, PA 19106-1572 215-351-2400, 800-523-1546 · www.acponline.org 
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impact on ACP member physicians, but also my own practice experiences in having worked within the 

Comprehensive Primary Care Plus (CPC+) program. 

OVERVIEW OF ACP's VIEWS ON MACRA 

ACP has been a strong supporter of MACRA and embraces its shift from a volume-based payment and 

delivery system, as was the case under the preceding fee-for-service system with yearly adjustments 

based on Medicare's Sustainable Growth Rate (SGR) formula, to one of value, accountability, and 

patient-centered care. ACP has been active in providing feedback on the implementation of the Quality 

Payment Program (QPP) as established by MACRA via its letters on both the 2017 and 2018 proposed 

rules, as well as on the Measure Development Plan and other requests for information and feedback 

from the Agency. 

Repeal of the SGR was a priority of ACP's, and nearly all of medicine, for more than a decade. Thanks to 

the passage of MACRA, physicians and their patients no longer have to be concerned with impending 

yearly payment cuts as a result of the flawed SGR formula. However, as noted earlier, MACRA not only 

repealed the SGR, it also has led to a true shift in the Medicare program from a volume-based payment 

and delivery system to one of value, accountability, and patient-centered care-an approach the 

College strongly embraces. In a recent~ outlining its forward-looking priorities, ACP recognizes 

the importance of MACRA in helping to ignite movement by Medicare toward these aims, and then 

calls for even further acceleration of the transition from fee-for-service (FFS) payment systems to 

bundled and risk-adjusted capitation payments, hybrid FFS + bundled/capitated payments, and other 

payment systems that incentivize value rather than volume. 

Alternative Payment Models (APMs) and Advanced APMs 

To achieve this acceleration, ACP believes that all public and private payers should transition their 

payment systems to support innovative payment and delivery models linked to the value of the care 

provided. This should be accomplished by testing a variety of APMs, such as accountable care 

organizations (ACOs), Patient-Centered Medical Home (PCMH) and Patient-Centered Specialty Practice 

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models, bundled payments, capitated payments, and others. These models should include risk 

adjustments, including adjustments for socioeconomic status, to the extent possible. The College also 

has recommended that the Centers for Medicare and Medicaid Services {CMS) work to ensure 

patients, families, and the relationship of patients and families with their physicians are at the 

forefront of the Agency's thinking in the implementation of APMs and the advanced APM pathway 

within the QPP, including as part of the development and implementation of the performance 

measures to be used within these models. 

In recognition that all clinicians are not willing or able to move directly into models with significant 

payment at risk, there should be pathways to help clinicians transition to models with increasing levels 

of risk at stake. ACP particularly believes that the PCMH model has been shown to improve quality and 

patient and physician satisfaction, reduce health care disparities, and reduce costs-and therefore has 

repeatedly recommended that CMS provide multiple pathways for medical homes to be included in 

the advanced APM pathway within the QPP, even in some cases without bearing more than nominal 

financial risk {particularly if it is a medical home that meets criteria comparable to medical homes 

expanded under section 1115A{c)). 

The College further believes that APM development and implementation for clinicians who currently 

lack opportunities-such as specialists/subspecialists; clinicians who are unable to participate in 

current models, such as those in regions where models are not being tested; and those who are unable 

to participate due to limitations in the model design-should be prioritized. In particular, this should 

include testing of the patient-centered specialty practice model as a potential Advanced APM. 

Importance of the CMMI and PTAC 

The College strongly supports the Center for Medicare and Medicaid Innovation {CMMI) and its 

essential role in developing, financing, implementing, evaluating, and expanding innovative physicianled Advanced APMs, as authorized by MACRA, as well as in the broader context of value-based 

payment and delivery system reform. Along these lines, ACP has encouraged CMS to fully use its 

authority under the CMMI and the Physician-Focused Payment Model Technical Advisory Committee 

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(PTAC) process to expand the availability of Advanced APMs and other models, as noted earlier. In 

order to accelerate the movement toward value-based payments, ACP believes there should be an 

expedited process for CMMI to develop, test, and expand APMs. This should include a clear pathway 

for testing models recommended by PTAC, as well as models from other payers including Medicaid and 

private payers. The creation of additional APMs would provide more opportunities for practices to 

transition from traditional FFS to more valued-oriented payment approaches. It is also imperative that 

the CMMI continues to have adequate funding to support its critical role in MACRA/QPP and the 

movement toward value-based payment. Further, the College looks forward to providing robust 

feedback to the CMMI per its recent "New Direction" Request for Information (RFI). 

ACP also believes that CMS should make technical assistance available to stakeholders who are 

developing APMs for PTAC review. Organizations that seek to propose models through the PTAC often 

lack sufficient expertise in at least a few areas that are needed to fully develop proposals for review, 

causing changes to be made throughout the PTAC process. The CMMI could provide this technical 

assistance to organizations as needed throughout the development process based on expertise gained 

in the design and testing of other models. This would not only enable the stakeholders to submit a 

proposal to the PTAC that is more comprehensive, but also allow the PTAC to conduct a more thorough 

review and recommendation to CMS. It also could make it easier for the CMMI to take steps to test 

models recommended by the PTAC if the CMMI aided in development of components that are required 

for implementation. 

ACP Views on the Comprehensive Primary Care Initiative (CPCi) and the Comprehensive Primary Care 

Plus (CPC+) Programs 

The College was a strong supporter of the CPCi program and remains supportive of and encouraged by 

the ongoing CPC+ program, the only medical home model that is specifically identified as an advanced 

APM in the QPP (for those in practices with 50 or fewer clinicians}. ACP believes that CPC+ offers the 

potential of greatly strengthening the ability of internists and other primary care clinicians, in 

thousands_of practices nationwide, to deliver high value, high performing, effective, and accessible 

primary care to millions of their patients. The success of this program will depend on Medicare and 

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other payers providing physicians and their practices with the sustained financial support needed for 

them to meet the goal of providing comprehensive, high value, accessible, and patient-centered care, 

with realistic and achievable ways to assess each practices' impact on patient care. The College is 

com~itted to working with CMS on the ongoing implementation of this program to ensure that it is 

truly able to meet such requirements of success. 

It is with this in mind, that I share my perspective as an internal medicine physician practicing in a 

participating CPC+-and former CPCi-practice. 

PERSPECTIVES OFA PARTICIPATING CPC+/ADVANCED APM PRACTICE 

In the three years since our practice started participating in the CPC initiative and now, one year into 

the CPC+ program, track 2, we have gained significant knowledge of the benefits and challenges of the 

program. 

Benefits of the CPC+ Program 

The addition of care coordination staff has enabled us to better track our patients who have been 

discharged from the hospital, reach out to them within 48 hours of discharge, and review medications 

and determine whether further ancillary services are needed. Follow up visits are also arranged at that 

time, which has helped to limit confusion on the patient's part and we anticipate this will lead to a 

decrease in readmissions. 

We have expanded our ability to analyze and deliver care and our patients have benefitted in many 

ways. With the added financial support that the CPC+ program provides, we have been able to offer 

self-management programs such as nutrition classes and dietitian visits. These are available free of 

charge to patients, and have been well received by many who need them. Gaining a patient's 

commitment to attend these classes on a regular basis, however, can be inconsistent. That being said, 

I had one patient who was six foot three inches tall and weighed 442 pounds. He had high blood 

pressure and terrible venous insufficiency of the legs which causes massive chronic swelling. He 

enrolled in our eight week class and by the end of it had lost 31 pounds. He dropped another 10 

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pounds in the next two months and his swelling improved. This is an extreme example, but shows that 

we can induce positive lifestyle changes which in turn can help prevent disease. 

Feedback data from CMS is another tool that we did not have access to previously, but now do as a 

result of our participation in CPC+. Often patients simply are not aware that many medical issues such 

as upper respiratory infections, rashes and minor cuts and bruises can be easily treated in a less 

expensive urgent care or office setting (often with a shorter wait for the patient). Now we can review 

the number of our patients per quarter who were admitted to the hospital, seen in the emergency 

room or seen in urgent care centers. Once identified, we hope to better educate these patients as to 

when and when not to seek emergency room care. Prior to CPC+, we did not have this ability and thus 

had no idea how many unnecessary emergency room visits there were. 

Pre-visit planning by ancillary staff and effective monitoring within the EHR have helped us to improve 

our rates of vaccination, screening procedures for mammograms, and diabetic eye exams. Screening 

tools for early detection of dementia have helped at-risk families better prepare to care for their loved 

ones. The CPC+ reimbursement for managing patients with this diagnosis has been helpful with 

targeting this effort. 

On a practice management level, regulations issued by CMS and the Office of the National Coordinator 

(ONC) requiring EHR vendors to obtain health information technology certification, as part of the EHR 

Incentive Programs, has made it possible to track patient parameters more effectively. Bear in mind 

that there are many EHR vendors out there, large and small, and many of them simply had not been 

powerful or sophisticated enough for a practice to track and report the measures required by the 

program. Prior to enactment of these regulations, EHR vendors had no incentive to create effective 

dashboards with which we can track patient measures (blood pressure, blood sugar measurements, 

screenings such as mammograms and eye exams). Without this ability, there would be no way that a 

practice could hope to report the necessary measures for the program. 

Challenges of the CPC+ Program 

While my experience overall with CPC+ has largely been positive, we have noted challenges with the 

program as well. There is an administrative component to CPC+ that cannot be overlooked, which 

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necessitates having a strong administrative team in place to truly allow the physicians to concentrate 

on clinical practice. Physicians are trained and motivated to take care of patients, and are not naturally 

inclined to deal with software problems and other administrative tasks. Our practice structure is 

organized so that doctors' hours are focused on addressing clinical issues, although we routinely 

review performance measures at practice meetings. While the physicians are seeing patients, a 

multitude of other activities occur related to the CPC+ and other quality improvement programs. These 

include team meetings with our medical assistants, front desk and care coordination staff, as well as 

communication with our EHR vendor to determine how best to help the practice track and meet the 

milestones. This all requires careful choreography so that high risk and recently discharged patients 

are contacted in a timely fashion, appointments are arranged and assessments are made the day 

before a visit so that nothing is missed during the visit. All this happens in the background of a medical 

office where the more typical activities such as patient check-in, insurance issues are resolved, medical 

assistants and physicians are evaluating patients and in-office procedures are done as needed. We are 

fortunate to have effective administrative talent in our office to handle these tasks, however many 

practices of our size or smaller lack the resources and the ability to attract the needed staff. Employing 

a full-time trained accountant and/or project manager who can design a budget and analyze the 

constant flow of data is not feasible for most small practices, but there is a need for that in a CPC+ 

practice. Many physicians have needed to outsource these tasks, thus adding to overhead. 

In addition, computer software, hardware and information technology support are fundamental for 

any practice hoping to excel in CPC+. Once again, keeping our EHR and related hardware up to date 

and running smoothly requires appropriate staff and constant communication with a software vendor, 

who is also a CPC+ stakeholder. 

Office staff requirements have changed overall as a result of our participation in CPC+. As previously 

mentioned, administrative staff needs to have experience in accounting, project management and 

computer hardware, unless these are outsourced, in order to meet the demands of a CPC+ practice. 

We also have found a need for specialized staff who have knowledge and understanding of a given 

health care demographic or population. For example, population care coordinators are now needed in 

our practice, which is a new position that we, as well as other practices, have had difficulty finding and 

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retaining. Furthermore, meeting the demands of this type of practice also requires someone with a 

clinical background, extensive telephone communication skills, and the ability to analyze spreadsheets 

of patient information. These care coordinators can help follow through on the physician's treatment 

plan to make sure it happens. Coordinators can make sure patients get the procedure they need 

scheduled, the medications they need covered and filled and filter out those that are no longer 

needed. They can help direct patients to behavioral health centers, home health agencies and 

rehabilitation programs and work to ensure the implementation of their care plan. The ideal candidate 

would be a nurse, yet most nurses prefer face-to-face clinical contact. I believe this job description is 

evolving and, for our practice, currently requires the work of multiple employees. 

Future Options for Improvement under the CPC+ Program 

1 would be remiss if I did not acknowledge that there is a financial incentive to participation. However, 

this is needed for the practice to maintain the appropriate staff and computer systems. An increased 

financial incentive would make the program more attractive to prospective practices as well as provide 

the financial resource to improve their infrastructure. 

Overall, I believe that our patient care has improved since participating in this program. With that, I 

would like to offer to this committee and to Congress ideas for improvement to the program. looking 

to the future, there is a need to simplify the reporting requirements under CPC+. As more private 

payers enter the APM market, one option would be to streamline specific metrics across both CMS and 

the private payer models. Reporting measures should be realistically achievable with the 

understanding that the physician can guide patients but ultimately, parameters such as BMI, blood 

pressure and blood sugar control are as much about patient engagement as they are about the 

expertise of the clinician. In addition, efforts should be made to enco!Jrage interoperability among EHR 

software vendors. This would lead to better electronic communication between medical offices and 

hospitals. 

The Need to Stay the Course and Move Away from a Fee-for-Service System 

As I reflect on the changes that have occurred in the practice of medicine, payment for medical care 

has changed a great deal since my father started his general practice in the early 1960s. At that time, 

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care was reactive in practice rather than the proactive approach that has become the current 

standard. Among the vast differences, chronic diseases such as diabetes and high blood pressure were 

not as prevalent, and preventive care was not recognized as a priority. A simple fee-for-service model 

worked well then, but simply is not as effective in addressing chronic disease management. We must 

continue to move forward with value-based, coordinated care, such as can be found in programs like 

CPC+, the medical home, and other APMs, and away from the fee-for-service system. Given the time 

and effort our practice has invested over the past few years toward this end, as well the significant and 

incremental improvements we have experienced, we plan to continue with this model and not return 

to a purely fee-for-service structure. 

VIEWS FROM THE BROADER ACP MEMBERSHIP ON MACRA, APMs, and CPC+ 

As noted earlier, ACP's membership is made up of 152,000 internal medicine physicians, related 

subspecialists, and medical students-just over half of its post-training members identify themselves as 

primary care physicians. ACP members who provide care directly to patients are in a variety of 

different practice sizes and settings, ranging from small independent practices to being employed 

within large health systems. A recent survey of a random sample of ACP members indicates that, since 

2016, practice participation in advanced payment and delivery models is increasing-and a large 

percentage of the respondents noted that they are making changes to prepare for successful 

participation in the QPP overall. Beyond these survey data, however, the feedback coming from ACP 

members through their chapters and up to ACP National is that they want to participate in APMs and 

are eager to have more opportunities available in their area and/or that are relevant for their specialty. 

ACP members who are primary care internists are hearing from their colleagues like me about the 

improved bottom line from having been in CPCi and now CPC+ participating practices, and more 

importantly, about the changes we have been able to make in terms of infrastructure, staffing, and 

technology to truly improve patient care. And they want in! At a recent meeting of one of ACP's policy 

committees, a member stated that she simply cannot figure out how to sustain her rural, primary care 

practice on fee-for-service alone-"lt's killing me," she said. And the impact of fee-for-service alone on 

an internist's practice goes beyond ensuring they keep their doors open in order to maintain an 

accessible source of care, to impacting their ability to provide the high quality and patient-centered 

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care they would like to provide to their patients. This is why the drumbeat of interest is growing, 

particularly since the passage of MACRA. 

Another factor driving the interest of ACP members in pursuing alternative payment models is the 

excessive administrative burden they face, particularly within a strictly fee-for-service environment. 

This is why ACP launched its "Patients Before Paperwork" initiative in 2015 in order to develop and 

maintain related policy, participate in various efforts to work to alleviate specific regulatory and 

insurance requirements, and identify opportunities to eliminate other unessential tasks that detract 

from patient care and contribute to physician "burn-out." Ideas for how to address excessive 

administrative tasks are outlined in detail within its policy paper "Putting Patients First by Reducing 

Administrative Tasks in Health Care.'' which was published in the Annals of Internal Medicine in March 

2017 and was recently supported by the American College of Obstetricians and Gynecologists. 

Therefore, ACP is pleased with the new initiatives recently announced by CMS to put "Patients Over 

Paperwork" and to ensure that the agency is using "Meaningful Measures" in all of its programs, 

including the Quality Payment Program-and have offered to actively engage with the Administration 

to address these issues. 

Interest in APMs is not limited to primary care internists and to current models like CPC+, but is also 

shared by ACP's internal medicine subspecialist members. This is why the College is such a strong 

advocate for testing and implementing models built around the patient-centered specialty practice 

approach, as initially outlined in its "Patient-Centered Medical Home Neighbor" paper in 2010. ACP 

members regularly reach out for any information or assistance the College can provide to help them to 

help prepare for participation in APMs or even to develop new ideas for subspecialty-relevant APMs, 

noting the importance that these models be able to interact successfully with the PCMH/CPC+ model, 

as well as other models being implemented now, in order to ensure true population health 

management and care coordination. 

CONCLUSION 

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The College would again like to sincerely thank Chairman Burgess and Ranking Member Green for 

convening this hearing and for your continued desire to see that the value-based system, as 

established under MACRA, is successfully implemented. We in the physician community appreciate 

this opportunity to offer our input on how these models are impacting our practices and patient care, 

both now and throughout the transition. We very much want to be part of this process and to provide 

feedback whenever needed. 

11 
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Mr. BURGESS. The Chair thanks the gentleman. 

Dr. Varga, you are recognized for 5 minutes, please, for an opening statement. 

STATEMENT OF DANIEL VARGA 

Dr. VARGA. Thank you, Mr. Chairman. Thank you to the members of the committee. My name is Dan Varga. I am the chief clinical officer and senior executive vice president for Texas Health Resources and the senior executive officer of the Southwestern Health 

Resources ACO, also speaking as a participant in Premier’s Population Health Collaborative. 

I would like to make three points to the committee. First, our decision to move to a two-sided risk, Next Generation ACO was a direct result of the incentives included in MACRA and the fact that 

these Alternative Payment Models, in our opinion, are working. We 

believe in a value-based healthcare system where incentives for all 

providers can be aligned and where healthcare providers are able 

to collaborate using an integrated infrastructure and transparent 

data on quality and utilization to deliver better outcomes for our 

patients. 

This is even more critical in North Texas. Because of North 

Texas’ strong economic and population growth, more than 40 percent of practicing physicians do not participate in the Medicare feefor-service program or severely limit their availability to fee-forservice beneficiaries. Thus, by participating in the Next Gen ACO, 

Southwestern Health Resources ACO has been able to keep almost 

3,000 physicians in the fee-for-service model. And this includes faculty, employed, independent PCPs, specialists, urban and rural 

physicians. 

Moreover, because of our participation in a Next Gen ACO we 

have waivers that allow us to partner with doctors to reduce the 

CMS reporting burden for our clinicians by reporting those measures for them as a group, earn bonuses by participating in the ACO 

which creates important incentives to physicians to move to this 

new care model, have access to comprehensive data on utilization 

for our 67,000 beneficiaries, allowing us to better direct our care 

management activity to areas where it can create the most value. 

I can’t point out enough that this data transparency for integrated providers is priceless and also allows us to clinically integrate within a set of safe harbors. In our experience, these models 

are working. In our experience with our 67,000 beneficiaries, we 

are among the top 10 Medicare ACOs in 2015 and 2016, saving 30 

million in ’15 and 37 million in 2016. 

We have been able to garner and retain top talent including 600 

primary care physicians—40 percent employed, 60 percent independent—as well as another 2,300 participating providers; budget 

in 2017 and ’18 to distribute over $22 million in incentives and 

gain sharing to independent PCPs alone, make investments in infrastructure to support coordinated patient-centered care with a 

budget of 70 million in 2018 to go along with over $100 million in 

investments since the institution of our ACO program; to tighten 

our network of providers to create better outcomes for our patients 

based on objective clinical and efficiency metrics; and to better 

manage our ED and acute care utilization. 

69 

We additionally have the benefit of participating in Premier’s 

Population Health Collaborative. Since 2012, about 50 percent of 

the Premier ACOs have achieved shared savings, better than the 

approximately 31 percent experienced by the rest, while also outperforming on quality metrics. In 2016, a hundred percent of the 

Collaborative’s Pioneer and Next Gen ACOs achieved savings 

versus 50 percent otherwise. 

And we also have the advantage, again referencing data, of sharing data, not just on our beneficiaries but on hundreds of thousands of Medicare beneficiaries and the ability to learn from our 

peers on how their markets are performing and how tactics in 

those markets can be deployed in ours. Share these results to demonstrate that while there has been concerns that APMs are not delivering real savings, it is clear that with a balanced and planned 

approach and effective execution, these models can work. 

The second point is that these value-based care and payment 

models are a significant departure from the past, changing 50 

years of culture and habit. There is a number of implications to 

that. First, the changes are obviously long overdue as we move 

from a fragmented fee-for-service system where providers are 

incented to do more services to one where competition will be driven by high-value networks that deliver differentiated outcomes. 

This work to better organize the healthcare market into highvalue networks is necessary and desirable and we would urge that 

folks make a differentiation between consolidation to create excessive market power and integration of providers in the market to 

create a high-value network. Policymakers should also be careful 

not to tilt the playing field to the advantage of one provider group 

over another and maintain a level playing field. 

And finally, while significant progress has been made to move to 

a value-based payment and delivery model, this Congress and administration should continue to build on these positive steps as 

have already been mentioned with needed change as we believe 

more organizations will move to and succeed in APMs, and I encourage you to review the listed areas’ reform in my written testimony and those in Premier’s Delivery System Transformation 

Roadmap. 

Thank you again for the opportunity to testify before this committee. You have made a vital and lasting impact on our Nation’s 

healthcare system with the design and enactment of MACRA and 

I urge you to continue to build on this successful work. Thank you. 

[The prepared statement of Dr. Varga follows:] 

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tf'~ Texas Health \':tl:1 Resources 

HeaUng Hands. Caring Hearts:" 

HOUSE ENERGY AND COMMERCE COMMITTEE 

SUBCOMMITTEE ON HEALTH 

"MACRA AND ALTERNATIVE PAYMENT MODELS: DEVELOPING 

OPTIONS FOR VALUE-BASED CARE" 

NOVEMBER 8, 2017 

Good morning, Chairman Burgess, Vice Chair Guthrie, Ranking Member Green and members 

of the Committee. My name is Dr. Daniel Varga. I am the Chief Clinical Officer and Senior 

Executive Vice President for Texas Health Resources, one of the nation's largest faith-based, 

nonprofit healthcare systems with more than 350 points of access throughout North Texas. I am 

board certified in internal medicine and have more than 27 years of combined experience in 

patient practice, medical education and health care administration. I am speaking today as the 

clinical leader of the Texas Health Resources accountable care organization (ACO) as well as a 

participant in Premier Inc., an organization of which we are both an owner and member. We 

participate in many Premier performance improvement collaboratives, including its Population 

Health Management Collaborative. I will be sharing the results of both our organization and the 

Premier collaborative. 

I have three points I would like to make to the Committee. 

First, our decision to move to a two-sided risk, Next Generation ACO model was a direct result 

of the incentives included in the Medicare Access and CHIP Reauthorization Act (MACRA) and 

the fact that these alternative payment models are working. Each of the lawmakers on this 

Committee should be proud of your work and leadership in passing this important legislation. 

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f.B)1 Texas Health 

\ll7 Resources 

Healing Hands. Caring Hearts:" 

I cannot stress enough how pivotal MACRA has been and the long-term, positive impact it will 

have for our nation. Health care providers have been trapped in a micro-managing, fragmented 

Medicare fee-for-service system. This system has stifled innovation, left providers to manage 

the challenges of perverse incentives, caused a focus on sickness rather than wellness, 

incented a duplication of services, undermined coordinated care, driven providers to focus on 

throughput and speed rather than patient-centered care, and ultimately led to increased health 

care spending. What's more, because Medicare is the dominant and most stable health care 

payer, it has become the template on which our health care system is built and private insurers 

follow. 

In North Texas, we have an additional dilemma. While the Medicare fee-for-service program 

represents the dominant payer in many markets, because of North Texas's strong economic 

and population growth, more than 40% of practicing physicians do not participate in the 

Medicare fee-for-service program or severely limit their availability to fee-for-service 

beneficiaries. Thus, by creating for 2017 the only qualifying Advanced Alternative Payment 

Model within the area through our participation in the Next Generation ACO model, Texas 

Health Resources has been able to keep almost 3,000 physicians in the fee-for-service model. 

Therefore, the incentives that were created by MACRA are essential in order for us to maintain 

access to high quality physicians and the care they provide in our community. 

Moreover, because of our participation in a Next Generation ACO, we have waivers from some 

of the constraining Medicare requirements. This enables us to work with our clinicians to 

innovate the care delivery process. We are also able to reduce the Centers for Medicare & 

Medicaid Service (CMS) reporting burden for our clinicians by reporting those measures for 

them as a group. Finally, the ability to earn bonuses by participating in the ACO has created an 

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~Texas Health \i:.tl:1 Resources 

Healing Hands. Caring Hearts~" 

additional incentive to move to this new care modeL These are important reasons why MACRA 

is an essential building block in building a better health care system. 

We have unquestionably seen this innovation and improvement in our Next Generation ACO. 

Our experience has allowed Texas Health Resources to: 

Be among the top ten Medicare ACOs in achieving shared savings. Specifically, we 

achieved savings of $29,958,600 in 2015 and $37,268,130 in 2016; 

Care for 67,000 beneficiaries through a value-based delivery model; 

Garner and retain top talent, including 600 primary care physicians (40% employed, 60% 

independent), and 2,300 participating physicians - with our employed physicians 

covering two-thirds of our beneficiaries; 

• Facilitate a model of care where independent physicians and employed physicians both 

perform well and are held to the same standards of performance; 

Provide an integrated information technology platform for both independent and 

employed physicians; 

• Make big investments in advancing compliance, clinical integration, patient experience, 

quality, and coordination of care standards with an ACO budget of more than $70 million 

for 2018; 

Build the necessary infrastructure to allow both independent and employed physicians to 

assume financial risk for the patients they manage and to succeed in that environment 

knowing that most independent physicians could not afford the investment or the risk on 

their own; 

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@Texas HeaHh tt!:1 Resources 

Healing Hands. Caring Hearts:" 

Tighten our network of providers to create better outcomes for patients, including 

preferred relationships with Skilled Nursing Facilities, Inpatient Rehabilitation Facilities, 

and Home Health Agencies based on objective clinical and efficiency metrics; 

• Create an effective primary care management model with ongoing success in post-acute 

care and specialist utilization efficiency, which is essential to managing costs overall; 

and 

• Increase our cost reduction efforts in Medicare Part A by focusing on appropriate 

hospitalizations. 

While we are pleased with the progress we are making, we know we are not unique. Because 

we participate in Premier's Population Health Management Collaborative, we both learn from 

and see the remarkable successes of many other organizations. As part of Premier's Population 

Health Management Collaborative, we are able to analyze and benchmark clinical and claims 

data with peers; receive clinical and strategic support from national experts; as well as learn 

from and share insights and best practices with many other organizations participating in 

alternative payment models to improve performance. This collaborative, as well as other 

Premier collaboratives, have an impressive record of consistently outperforming other health 

care providers in delivering improved outcomes in both public and private payment models. 

The Medicare ACOs in Premier's collaborative have comprised approximately 6% of the total 

number of Medicare ACOs since the inception of the Pioneer ACO Model and Medicare Share 

Savings Program (MSSP) in 2012, and now the Next Generation A COs. Yet, year over year, 

these A COs have consistently performed better than other ACOs in the Medicare program, 

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®Texas Health li:.t'!:1 Resources 

Healing Hands. Ca1·ing Hearts~M 

despite the fact that the average benchmark for these ACOs is lower than the national average. 

Specifically: 

Since 2012, each year about 50% of the Premier ACOs have achieved shared savings, 

better than the approximately 31% experienced by the rest. They have also 

outperformed on quality metrics compared to non-Premier ACO participants. 

Since 2012, Premier Medicare ACOs have delivered at least twice the amount of shared 

savings than the other ACOs, and thus increased savings to Medicare. In other words, 

had all ACOs performed at the same level as those in Premier's collaborative, Medicare 

could have potentially saved twice what it has so far with these programs. 

• Since 2012, the 6% of Medicare ACOs in Premier's collaborative have generated 20% 

of the nation's savings. 

In 2016, the Pioneer and Next Generation ACOs comprised 19% of the total number of 

ACOs, yet delivered 33% ofthe nation's savings to Medicare. Moreover, 100% of these 

two-sided model participants in the Premier collaborative achieved shared savings 

compared to a little over 50% for the rest of the participants. 

Further, Premier collaborative members outperform in other alternative payment 

arrangements, such as bundled payment. In the Comprehensive Care for Joint 

Replacement (CJR) model, participants in Premier's Bundled Payment Collaborative 

performed 35% better than the national average in the first two quarters of performance 

year 1. 

I share these results to demonstrate that, while there has been concern that alternative payment 

models are not delivering real savings for the nation, it is clear that with a planned approach and 

effective execution, these models can and are working. 

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t:P.:\ Texas Health 

\';.tl:1 Resources 

Healing Hands. Caring Hearts:·· 

My second point is that these value-based care and payment changes are a significant 

departure from the past, changing 50 years of culture and habit. This has a number of 

implications. 

For one, you may hear anxiety and complaints from some providers. As we all know, change is 

hard, but the fee-for-service system has also been generous to many providers and suppliers. 

However, these changes are long overdue. They began in the early 2000s and should continue, 

as they are leading an important revolution in health care that will benefit our population and our 

economy. 

It is essential that lawmakers and policymakers understand the consequences of this change 

and view the developments in our health care system from the vantage point of where we are 

headed and not from where we have been. There is a lot of talk in Washington about health 

care consolidation with the concern that it will drive up health care spending. 

What is occurring, however, is that we are moving from a fragmented, fee-for-service system 

where providers are engaged in "coopertition" to deliver more services (both competing with and 

referring more business to other providers) to one where competition will be driven by high 

value networks that deliver differentiated outcomes. 

As illustrated earlier, Texas Health Resources both works with independent clinicians and 

employed physicians, and we believe that this pluralistic model is vital to the success of our 

ACO. We do not want to simply employ physicians. We do, however, want to create a highvalue network in which providers are aligned and have a shared objective to deliver high-quality, 

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~Texas Health ~Resources 

Healing Hands. Caring Hearts:"' 

cost-effective healthcare across ambulatory, behavioral, acute and post-acute providers, as well 

as with community partners. To achieve this Texas Health Resources has created a clinically 

integrated network of both employed and independent physicians, and other providers working 

to engage and satisfy patients, deliver better outcomes and manage spending. Our goal is to 

deliver care in the right setting, avoid duplicating services and achieve high-quality outcomes. 

Our Dallas market is gradually being defined by providers organizing themselves into competing 

high value networks. Insurers have attempted to build these networks in the past, but we believe 

they will never truly succeed because they are simply not at the front line of care, engaging 

regularly with the patients they serve and embedded in the community. In fact, in many areas of 

care delivery, insurers simply create a conflicting and duplicative layer of excess in the 

healthcare system. Moreover, they are not in a position to identify breakthrough innovations that 

can delight consumers with service and convenience, as well as deliver better health outcomes. 

Therefore, much of this work to better organize the health care market into high value networks 

is both necessary and desirable. Policymakers need to differentiate between consolidations to 

create excessive market power from organization of the market into a high value network. 

Moreover, policymakers must be careful not to tilt the playing field to the advantage of one 

provider group over another. If, for instance, payment models create an unequal advantage for 

physician- verses hospital-led models, it will only lead to hospitals acting to protect themselves 

by hiring more physicians. 

My final point is that while significant progress has been made to move the micro-managing 

Medicare fee-for-service system to a value-based payment and delivery system, this Congress 

and administration must continue to build on the positive steps that have been made. There 

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~Texas Health 

®Resources 

Healing Hands. Caring Hearts!" 

remain significant problems with the structure of and rules that govern these programs. With 

needed changes, we believe more organizations will move to and succeed in these alternative 

payment models, benefitting both Americans and our nation. Some of the areas of greatest 

need include: 

Removing regulatory barriers that impede integration of health care providers and 

undermine efforts to reduce costs and improve quality; 

Modernizing the legal framework that was created in the Medicare fee-for-service 

program to allow ACOs to tailor care practices which ensure they are providing the 

right care to the right patient at the right time; 

• Increasing flexibilities for ACOs to design their own programs, such as establishing 

networks and altering benefit designs; 

• Exempting Medicare ACOs' shared savings from the sequestration cuts to avoid the 

double hit that ACOs now incur; 

• Specifically for the Medicare Shared Savings Program, we recommend: 

o Allowing providers to choose prospective assignment in all ACO models; 

o Better risk adjustment for the acuity of ACOs' patient population; 

o Creating a quality bonus system that rewards rather than penalizes high 

performers; 

o Allow an ACO to assume greater risk by moving to a higher risk track 

annually; 

Creating new voluntary alternative payment models, including bundled payment models 

where the health system en be conveners; and 

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~Texas Health 

\';tt::i' Resources 

Healing Hands. Caring Hearts; 

Modernizing a 40-year old confidentiality law that blocks providers' access to substance 

use information on their patients, impeding their ability to provide proper care 

coordination and presenting a serious threat to patient safety. 

Many of these needed changes are laid out in "Premier's Delivery System Transformation 

Roadmap," which offers a number of thoughtful recommendations to move our nation's 

health care system to one that rewards value over volume. I strongly suggest the Committee 

review this Roadmap, of which the recommendations were derived both from organizations 

like Texas Health Resources and the collective experience of Premier's collaboratives. 

Thank you for the opportunity to testify before this important Committee. You have made a 

vital and lasting positive impact on our nation's health care system with the design and 

enactment of MACRA. This has been pivotal progress that is working to benefit our patients, 

communities and our nation. I commend you for this accomplishment and urge you to build 

on this successful work. 

9 
79 

Mr. BURGESS. The Chair thanks you for your testimony. The 

Chair would make an observation that it has been long a goal of 

mine to have a panel with five or six physicians before this subcommittee. This may be one of the first times this has happened 

in my experience. I wasn’t really planning on talking about this aspect. I wanted to get five or six doctors in here to tell us how much 

economists should be paid. 

Dr. Wulf, you are recognized for 5 minutes. 

STATEMENT OF J. WILLIAM WULF 

Dr. WULF. Thank you, Chairman Burgess, Ranking Member 

Green, and members of the Health Subcommittee for inviting me 

to testify today. I am pleased to be here to share with you how the 

move to Alternative Payment Models is working to transform the 

delivery of health care. 

I am testifying today on behalf of CAPG. CAPG is the largest association in the country representing capitated physician organizations participating in coordinated care. CAPG members include 

over 300 medical groups and independent practices in 44 States, 

Washington, DC, and Puerto Rico. CAPG members have proven 

that APM-type models of payment and care delivery can lead to 

lower cost and higher quality. 

I also address you today as a physician and the CEO of Central 

Ohio Primary Care Physicians. Our group consists of 370 physicians, 200 adult primary care physicians, 60 pediatricians, 75 

hospitalists, and 25 specialists. COPC is the largest physicianowned primary care group in the country. 

Let me begin by emphasizing a single point: The value movement 

is working. To underscore that point I will share with you our organization’s journey into value-based payments and why being in an 

APM matters to primary care. We were formed in 1996 when 33 

of us got together from 11 practices. Beginning in 2006 through 

2014, we reported for PQRS when it was still PQRI, we deployed 

an EHR and we are now on our second generation EHR. All of our 

eligible providers met meaningful use. We too became Level 3 Patient-Centered Medical Homes. 

All of these initiatives, every one of them, made being a PCP less 

satisfying in a fee-for-service world. In 2014, we entered into 

shared savings contracts with both commercial and Medicare Advantage payers. We sought contracting structures that reward 

PCPs for things that do not happen. If you are a primary care physician taking care of 1,500 patients and no one has colon cancer because they have all had their colonoscopies, you have created value. 

Value heretofore unrecognized by the primary care physician, but 

recognized by the employer or the payer. 

We developed programs to improve care. This meant expanding 

our hospitalists program, developing transition of care nursing, hiring care coordinators, having visiting physicians who see only two 

patients in crisis a day, and having an ER intervention program 

where our nurses intercept our patients in the emergency room. In 

2016, we earned $12 million in shared savings for our primary care 

physicians that was returned to them. Our Medicare readmission 

rate on 4,000 Medicare admissions in 2016 was 7 percent. The national average is over 18 percent. 

80 

The ability to reward primary care physicians for high quality 

and lower cost is crucial to the preservation of primary care. In 

2017, we desire to be in a Medicare APM. We qualified for CPC+ 

Track 2. CPC+ payment model allowed us with prepayment to expand our existing care coordination, move towards capitated payment because of the hybrid model, and receive quality payments. 

In 2018, we will move to prepaid contracts with downside risk on 

25,000 Medicare Advantage lives. 

Clearly, MACRA’s incentives for advanced APM participation is 

the latest program driving us into new models of payment. Past 

programs have discouraged fee-for-service volume and APMs are 

now rewarding value and creating value. We are thrilled to see 

that last week CMS announced its intention to create an advanced 

APM demonstration in Medicare Advantage. With one-third of all 

Medicare lives in Medicare Advantage, it is crucial that it be rewarded like fee-for-service Medicare. In the MACRA final rule the 

agency states that participants in such demo will qualify as an 

APM. This is a crucial step forward and we thank the Members of 

Congress including those present at today’s hearing and we encourage CMS to move forward. 

Thank you for the opportunity to testify. I hope it has been helpful and I am pleased to answer questions. 

[The prepared statement of Dr. Wulf follows:] 

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The Voice of Accountable Physician Groups 

Statement of Dr. J. William Wulf 

CAPG -the Voice of Accountable Physician Groups 

Before the House of Representatives Energy and Commerce Subcommittee on Health 

November 8, 2017 

Thank you Chairman Burgess, Ranking Member Green, and Members of the Health 

Subcommittee for inviting me to testify today. I am pleased to be here today to share with you 

how the move to alternative payment models is working to transform the delivery of healthcare 

in our country to a model that is betterfor patients and physicians. 

I am testifying today on behalf of CAPG. CAPG is the largest association in the country 

representing capitated physician organizations practicing coordinated care. CAPG members 

include nearly 300 medical groups and independent practice associations (!PAs) in 44 states, 

Washington, DC and Puerto Rico. CAPG believes that APMs are essential to building a delivery 

system that can meet the demographic and financial challenges facing the nation. CAPG 

members have decades of experience with APMs, including those that are risk based or 

capitated, and have proven that these models of payment and care delivery can lead to lower 

cost, higher quality care. 

I also address you today as a physician and the Chief Executive Officer of Central Ohio 

Primary Care (COPC). Our group consists of 370 physicians, including 200 adult primary care 

providers, 60 pediatricians, 75 hospitalists and 25 specialists. COPC is the largest physicianowned primary care practice in the country. Our physicians provide care to over 350,000 

patients in 65 offices across central Ohio. 

915 Wilshire Boulevard, Suite 1620 

Los Angeles, CA 90017 

Telephone: 213-624-2274 

FAX: 213-683-0032 

www.capg.org 
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Let me begin by emphasizing a single point: the value movement is working. To 

underscore that point, I will share COPe's own journey into APMs with traditional Medicare and 

Medicare Advantage (MA) plans. 

COPC's Value Journey 

Like many primary care practices across the country, we started our movement toward 

value-based care delivery in the patient-centered medical home model (PCMH). At the time, we 

were looking for a way to organize our own physicians across different offices, in order to 

improve quality and access. We worked with the health plans in our local market to organize 

our doctors around a common set of clinical measures, bringing the clinical team together to 

focus on specific, aligned goals. Our local payers made a financial commitment to the model 

and as a result, we began to build the infrastructure that is necessary to move to risk-bearing 

payment models. We quickly saw that the PCMH model was both improving quality and 

bending the cost curve. We also recognized that PCMH was a stepping stone or building permit 

to move into shared savings and risk. 

Based on PCMH results, we negotiated a shared savings arrangement with the health 

plans that would allow us to share in some of the cost savings that we were achieving for 

employers, patients as well as payers. We also entered a shared savings arrangement with our 

contracted Medicare Advantage (MA) plans for our 25,000 MA beneficiaries. To date, these 

arrangements have been upside only (we share in the savings but are not at risk for financial 

losses). In 2018, we will transition into downside risk and delegation for our Medicare 

Advantage lives. 

As you know, in 2015, Congress passed the Medicare Access and CHIP Reauthorization 

Act (MACRA). The law provided additional incentives to move into advanced APMs for our 

traditional Medicare population. Because of the incentives in the law and our successful 

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experience with APMs with other payers, we decided to move into Comprehensive Primary Care 

Plus (CPC+) in 2017. CPC+ is a multi-payer advanced medical home model that qualifies as an 

advanced APM under MACRA. 

We knew that we wanted to be in the advanced APM track under MACRA and we had 

evaluated the model options available for our group. We believe that CPC+ would give us an 

opportunity to bring successful care management tools developed for our MA population to our 

fee-for-service population. This year we have 26,000 traditional Medicare beneficiaries and 180 

physicians in CPC+. The model has several design elements that made it an attractive choice for 

our organization. 

First, CPC+ reforms payment for our practice. Rather than relying solely on a flawed, 

volume-driven fee-for-service payment methodology, CPC+ combines prepaid, per-beneficiaryper-month payments with modified fee-for-service payments. We receive a care management 

fee calculated on a per-member-per-month basis. In addition, in CPC+, our fee-for-service 

payments are reduced. The withheld amount is instead paid to the group in lump sums on a 

quarterly basis. The pre-payment of funds allows us to invest in the infrastructure that we need 

to coordinate and manage care for our population. It has enabled us to bring successful care 

management models, like Transitions of Care (described below) to our fee-for-service 

population, resulting in better care at a lower cost. 

Second, CPC+ uses robust performance based incentives that examine how well the 

practice performs on clinical quality, utilization, and patient experience. We know that 

performance measurement and accountability are essential in the movement from volume to 

value. CPC+ makes an upfront incentive payment for performance which is later reconciled 

against actual performance. If a participant falls below the performance standards, funds must 

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be repaid to the government. We believe that this is a critical element in a successful APM and 

will safeguard against concerns that may arise from the transition to advanced APMs. 

Finally, the CPC+ program requires that its participants continue to build on the core 

competencies of population health management and improvement. For example, in the model, 

we identify and stratify our patient population. This means using data to identify the sickest 

patients and then tailoring our care processes and resources toward those patients. These 

patients often represent the most significant opportunity to improve care, reduce costs, and 

enhance quality. CPC+ provides the data and infrastructure for our FFS population to allow us to 

identify patients most in need and tailor services to those patients, to get them healthy and keep 

them healthy. 

We are still relatively new to the CPC+ program, with this being the first year of 

implementation. What we already know is that this program provides the funding and payment 

model to allow us to bring our care management processes and tools to the FFS Medicare 

population. 

Examples of Success with APMs: COPC Transitions of Care Program 

Our Transitions of Care (TOC) nursing program is designed to create smooth transitions 

for patients who leave the hospital. When a COPC patient goes to the hospital, a TOC nurse will 

see the patient. From that point on the, TOC nurse will stay connected to that patient, through 

the time the patient leaves the hospital. The TOC nurse electronically schedules an 

appointment with the patient's primary care physician before the patient leaves the hospital. 

The nurse will also contact the patient 48 hours post discharge to check on the patient's health 

status, reconcile medications, and remind the patient about the follow up appointment. If the 

patient misses the appointment, the nurse will follow up with the patient and ensure the patient 

sees the primary care physician. 

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We know that this follow up appointment and the surrounding care coordination 

services work. The program has enabled us to keep our Medicare readmission rate to seven 

percent (as compared to a Medicare national average readmission rate of roughly 18 percent). 

The TOC program coupled with an expanded hospitalist program, care coordinators, visiting 

physicians and an expanded quality staff generated $12 million in shared savings in 2016. 

But, perhaps more importantly, this program has real life impact on our patients. In a 

fee-for-service system, a patient discharged from the hospital has little post-discharge planning. 

The patient may leave the hospital with instructions to call her physician, but there are few if 

any supports in place to ensure that visit happens. As a result, fee-for-service patients typically 

begin a vicious cycle of emergency room visits followed by post-discharge complications, landing 

the patient back in the hospital multiple times. Our TOC model, powered by the infrastructure 

of our APM participation, breaks this cycle. 

The Importance of Advanced Alternative Payment Models 

COPC physicians are committed to APMs because we see what they can achieve for 

patients and for the healthcare system as a whole. We are working, across payer types, to move 

away from fee-for-service payment and ultimately, toward pre-paid, capitated models. We 

know that these models offer better quality for patients at a lower cost. Importantly for groups 

like COPC, we also know that these models will save the practice of primary care, by getting our 

primary care physicians off the treadmill of fee-for-service and enabling them to spend the time 

with patients that need the most attention and to be paid for keeping their patients healthy. 

First, APMs are demonstrated to improve quality and reduce cost. A recent study by the 

Integrated Healthcare Association (IHA) examined the health care quality and cost across the 

state of California. Looking at results for 24 million patients, IHA found that: 

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• Capitated commercial contracts outperform fee-for-service commercial products on 

cost and quality. The capitated model outperformed the fee-for-service model on five 

of six quality measures and cost, on average, $200 less per patient annually; 

• Statewide emergency department visits, all cause readmissions, and inpatient bed days 

were all between 50 percent and 75 percent higher in fee-for-service than in capitated, 

coordinated Medicare Advantage; 

• A coordinated care delivery system is a key factor in the success of capitated payment 

models.1 

A recent study in the American Journal of Managed Care compared two physician 

organizations in Medicare Advantage, one where the MA plan paid its downstream physicians 

with fee-for-service, the second where the MA plan paid its downstream physician organization 

a capitated payment. The capitated group had higher quality and generated cost savings. 

Specifically, the patients in the capitated (advanced APM) group had a six percent better 

survival rate and a 32.8 percent lower risk of dying as compared to the FFS group. The capitated 

group reduced emergency department visits and inpatient hospital admissions by 11.2 percent 

and 11.9 percent respectively. The reduction in ED visits resulted in an estimated savings of 

$100,915. The reduction in inpatient admissions resulted in a savings of $1,756,869. 

In our view, these improvements to quality and patient experience flow from a payment 

and delivery model that encourages physicians and other care team members to focus on 

providing the right care for their population. In APMs, incentives are re-aligned toward teambased care, a focus on preventing illness and disease progression, and providing care in the right 

' Integrated Healthcare Association. Benchmarking California Health Care Quality and Cost Performance (2016), 

available at http:llwww.iha.org/sites/defau1Ufileslresourceslissue-brief-cost-atlas-2016.pdf. 

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place at the right time. Participating in models like CPC+ brings us one step closer to this 

ultimate end-goal. 

It is no secret that the healthcare system faces serious challenges in the years to come. 

Baby boomers are aging into Medicare at a rate of about 10,000 per day, seniors are living 

longer, and often with multiple chronic conditions. These demographic shifts necessitate a 

more robust primary care work force. I believe that our country is already facing a crisis in 

primary care and that these challenges could exacerbate the problem. 

Along with other policy changes, the shift to advanced APMs can help save primary care. 

In a fee-for-service payment model, physicians are on a treadmill of sorts. Over the last 6-8 years 

programs such as PCMH, PQRS and Meaningful use have slowed the delivery of care due to 

increased documentation requirements. The electronic health record you have incentivized is a 

better record but it is much more difficult to complete a visit. Current delivery models have 

already curtailed volume so it is imperative we continue to move forward and pay for value. 

Without pay for value the only way a primary care physician can maintain their compensation is 

to see more patients. This can lead to burnout, frustration, and a feeling that the physician does 

not have time to have meaningful interactions with patients. 

APMs can get our doctors off that treadmill. We pay our doctors to keep their patients 

healthy, we reward our physicians for their performance on quality and efficiency metrics, not 

the volume of services provided. The result is two-fold, they are less focused on volume, to be 

sure. But our physicians also see that their patients are getting the care they need and are 

healthier as a result. In all, we believe that APMs are key to a more satisfying, sustainable way 

to practice medicine. We think that APMs are one piece of the puzzle for saving primary care in 

this country. 

Medicare Advantage APMs 

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Clearly, MACRA's incentives for advanced APM participation have played a role in 

driving us into new models in advanced APMs. This is true for other CAPG members as well. We 

believe it is equally important to have these incentives for risk contracting (advanced APM 

participation) in Medicare Advantage as well. As you know, a third of all seniors are enrolled in 

Medicare Advantage. In some parts of the country, more than half of the senior population is 

enrolled in an MA plan. MA has reached a size and strength where its role in delivery system 

and payment reform simply cannot be ignored. 

We were thrilled to see that CMS announced its intent to create an advanced APM 

demonstration in MA. In the MACRA final rule for 2018, the agency says that participants in 

such a demo can qualify as advanced APM participants for 2018 through 2024. This is a crucial 

step forward that will allow additional doctors to participate in advanced APMs and will also 

align incentives across Medicare. We thank all the Members of Congress, including those 

present at today's hearing who encourage CMS to move forward with this important policy 

change. 

Conclusion 

Thank you for the opportunity to testify today. I hope this testimony has been helpful 

as you consider the status of the value movement and the role MACRA has played to accelerate 

delivery system transformation. I am pleased to answer any questions. 

8 
89 

Mr. BURGESS. The Chair thanks the gentleman. 

The Chair recognizes Dr. Edgerton 5 minutes for your opening 

statement, please. 

STATEMENT OF COLIN C. EDGERTON 

Dr. EDGERTON. Chairman Burgess, Ranking Member Green, 

Chairman Walden, Ranking Member Pallone, and distinguished 

members of the Health Subcommittee, thank you for the opportunity to speak before you today. 

My name is Dr. Colin Edgerton and I am rheumatologist in a 

small private practice at Low Country Rheumatology in Charleston, South Carolina. I am one of seven rheumatologists in a single 

specialty group. Our practice is a typical rheumatology practice 

with around 50 percent of our patients being in Medicare along 

with a significant number of TRICARE patients and a smaller 

group of Medicaid patients. The remaining group of patients are in 

the commercial segment. 

Because South Carolina, like most areas of the country, suffers 

from a shortage of rheumatologists, our patients may travel long 

distances, commonly 11⁄2 to 2 hours, to see us and receive treatment. As a result, we see a mix of urban, suburban, and rural populations. In addition to my work as a rheumatologist, I am also 

privileged to be involved with the American College of 

Rheumatology, where I currently chair the committee on 

rheumatologic care. The ACR represents approximately 9,500 

rheumatologists and rheumatology health professionals. 

Community physicians including rheumatologists are keenly 

aware of the opportunities created by MACRA for developing models to promote value-based care. Before MACRA there really was 

no meaningful way for small specialties and small practices to participate in Alternative Payment Models. As rheumatologists, we did 

not have the opportunity to engage in APMs. Our specialty simply 

did not fit into the previously existing value-based products. 

Coming from a community practice setting, even just a few years 

ago I would not have considered myself someone who could get involved in an APM. But with the repeal of the SGR formula, an institution of MACRA, rheumatologists saw for the first time a structured opportunity to participate in value-based medicine. 

There are several reasons that I and also the ACR have been excited to get involved in creating APMs under MACRA. Most notably, we immediately saw the benefits of APMs, recognizing that 

certain aspects of care provided by rheumatologists as cognitive 

specialists are undervalued in the current system. In many instances, the value of training and expertise provided by 

rheumatologists is not recognized in payment outside of innovative 

models. Additionally, non-face-to-face care and chronic disease care 

coordination with other providers are critically important but not 

reimbursed services provided by rheumatologists every day. And 

like other specialists that are developing APMs, rheumatologists 

know that these valuable services prevent costly or unnecessary 

procedures and lower overall costs. 

My early foray into value-based medicine involved reaching out 

to leaders in the AMA initially who had experience with valuebased projects through CMS. This finally led me to the PhysicianVerDate Mar 15 2010 09:55 Oct 11, 2018 Jkt 037690 PO 00000 Frm 00093 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\115X75MACRAOPTIONSPDFMADE WAYNE
90 

Focused Payment Model Technical Advisory Committee, PTAC, 

whose members have been generous with their time, listening to 

my ideas, and guiding my progress. The ACR simultaneously has 

begun developing an APM and I have been fortunate to participate 

as a representative of the community of rheumatologists. 

The ACR’s APM is approaching its testing phase and my partners and I are eager to be a pilot site. The ACR’s APM addresses 

the treatment of rheumatoid arthritis, a lifelong condition whose 

care depends on the stage of the disease. The APM reflects the varied involvement of the rheumatologist during these distinct stages 

of care, splitting payment into an initial stage for diagnosis, including, for example, communication with primary care physicians followed by ongoing care stratified by the disease severity and other 

illnesses that complicate disease treatment. This model aligns payment with physician work and reimburses services that have traditionally been undervalued. 

Quality measures are built into the APM to ensure treatment adheres to best practices. Rheumatologists as a specialty are energized by the opportunity to provide our patients value-based care 

through this framework. We look forward to participating with 

more physician participation in APMs. Specifically, smaller practices are eager to participate in APMs as well, and allowing some 

of the downside risk to be covered could help those practices get involved. 

Regarding timelines, as soon as MACRA was codified many specialties began to look at APMs, and I am hearing that a reduction 

in the qualification thresholds could allow these eager physicians 

to utilize the APM framework. 

We appreciate the committee’s work to get us to this point and 

we look forward to continuing to develop and implement innovative 

new payment models that offer the opportunity to provide better 

patient care aligning payment with highly valued services. Thank 

you again for inviting me and I am happy to address any questions 

the committee may have. 

[The prepared statement of Dr. Edgerton follows:] 

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Colin C. Edgerton, MD, FACP, FACR, RhMSUS 

Testimony- Committee on Energy and Commerce 

Snbcommittee on Health 

Wednesday, November 8, 2017 

Chairman Burgess, Ranking Member Green, Chairman Walden, Ranking Member Pallone, and 

distinguished members of the Health Subcommittee, thank you for opportunity to speak before you 

today. My name is Dr. Colin Edgerton, and I am a rheumatologist in a small private practice at Low 

Country Rheumatology in Charleston, South Carolina, where I am one of seven rheumatologists in a 

single-specialty group. 

Our practice is a typical rheumatology practice, with around 50 percent of our patients being in 

Medicare, along with a significant number of Tri-care patients and a smaller group of Medicaid patients. 

The remaining group of commercial patients makes up approximately 40 percent of our patient 

population. As rheumatologists, many of the diseases we treat affect the Medicare population, although 

autoimmune diseases do also strike younger Americans as well. 

Because South Carolina, like most areas of the country, suffers from a shortage of 

rheumatologists, our patients may travel long distances (commonly 1.5 to 2 hours) to see us and receive 

treatment, As a result, we see a mix of urban, suburban, and rural populations in our practice. In 

addition to my work as a rheumatologist caring for patients with rheumatic disease in our small private 

practice, I am also privileged to be involved as a volunteer with the American College of Rheumatology 

(ACR), where I currently chair the Committee on Rheumatologic Care. The ACR represents 

approximately 9,500 rheumatologists and rheumatology health professionals. 

Community physicians including rheumatologists are keenly aware of the opportunities created 

by the Medicare Access and CHIP Reauthorization Act (MACRA) for developing models to promote 
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value-based care. Before MACRA there really was no meaningful way for small specialties or small 

practices to participate in alternative payment models (APMs). As rheumatologists we did not have the 

opportunity to engage in early APMs because our specialty did not fit into the previously existing valuebased projects. Looking back just a few years, I recognize that, coming from a community practice 

setting, I would not have considered myself someone who could get involved in an APM. But with the 

repeal of sustainable growth formula (SGR) and institution of MACRA, rheumatologists saw for the first 

time a structured opportunity to participate in value-based medicine. 

There are several reasons that I and also the ACR have been excited to get involved in creating 

APMs under MACRA. Most notably, we immediately saw the benefits of APMs, recognizing that certain 

aspects of care provided by rheumatologists as cognitive specialists are undervalued in the current 

system. We are trained to recognize and diagnose rheumatologic diseases and other illnesses that 

complicate treatment, and to communicate with patients, their family and their doctors to maximize the 

treatment plan. Yet in many instances, the value of the training and expertise provided by 

rheumatologists is not always recognized in payment outside of innovative models. Services such as 

non-face-to-face care and chronic disease care coordination with other providers are examples of 

critically important but non-reimbursed services provided by rheumatologists every day. And, like other 

specialists that are developing APMs, rheumatologists know that these valuable services prevent costly 

or unnecessary procedures and lower overall costs. 

My early foray into value-based medicine involved reaching out to leaders in the AMA who had 

experience with value-based projects at the Centers for Medicare and Medicaid Services (CMS). This led 

me to the Physician-Focused Payment Model Technical Advisory Committee, or PTAC, whose members 

have been generous with their time listening to my ideas and guiding my progress. The ACR 

simultaneously began developing an APM and I have been fortunate to participate in this process as a 
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representative of community rheumatologists. The ACR's APM is approaching its testing phase, and 

back home my partners and I are eager to be a pilot site and to help "work out the kinks." 

The ACR's APM addresses the treatment of rheumatoid arthritis (RA), a life-long condition 

whose care depends on the stage of the disease. The ACR's APM reflects the varied involvement of the 

rheumatologist during these distinct stages of care, splitting payment into an initial stage for diagnosis 

(including, for example, communication with primary care physicians), followed by ongoing care 

stratified by the disease severity and the other illnesses that complicate treatment. This model aligns 

payment with physician work and reimburses for services that have traditionally been undervalued. 

Quality measures are built into the APM to ensure treatment adheres to best practices. 

One of the most important components of MACRA is its emphasis on physician-generated valuebased initiatives. In support of that emphasis, the PTAC has been created and it is obvious that it is 

made up of people who are committed to "beating the bushes" around the country to engage physicians 

at the grass-roots level, and providing guidance even before an APM is formally submitted. The feedback 

that PTAC provides to organizations developing and submitting APMs has been enormously helpful. 

Rheumatologists as a specialty are energized by the opportunity to provide our patients valuebased care through this framework, and we look forward to more physician participation in APMs. 

Smaller practices are eager to participate in APMs, and allowing some of the downside risk to be 

covered could help those practices get involved. Regarding timelines, as soon as MACRA was codified 

many specialties developed APMs, and I am hearing that a reduction of the qualification thresholds 

could allow these eager physicians to utilize the APM framework. 

We appreciate the Committee's work to get us to this point and we look forward to continuing 

to develop and implement innovative new payment models that offer the opportunity to provide better 

patient care-- aligning payment with highly value services. Thank you again for accepting this testimony 

and I am happy to address any questions the Committee may have. 
94 

Mr. BURGESS. The Chair thanks the gentleman. 

Dr. Kavanagh, you are now recognized for 5 minutes, please, for 

an opening statement. 

STATEMENT OF BRIAN KAVANAGH 

Dr. KAVANAGH. Thank you, Chairman Burgess, Ranking Member 

Green, and members of the Health Subcommittee. I am a radiation 

oncologist at the University of Colorado. I treat cancer patients 

there. I serve as the chair of the board of directors for the American Society for Radiation Oncology, also known as ASTRO. 

ASTRO represents more than 10,000 individuals striving to give 

cancer patients the best possible care. ASTRO’s membership includes radiation oncologists, nurses, cancer biologists, medical 

physicists, and other healthcare professionals. Close to 60 percent 

of all cancer patients will receive radiation therapy and ASTRO’s 

members treat more than one million cancer patients each year. 

Radiation therapy is a safe and effective treatment for cancer. It 

works by damaging a cancer cell’s genetic material thus stopping 

its growth. When the injured cancer cells die the body’s natural 

healing processes remove them. Most treatments are given as outpatient procedures and so patients can maintain a high quality of 

life while receiving treatment. Of the million patients treated annually with radiation therapy, about 60 percent receive care in hospital outpatient departments and the other 40 percent receive care 

in freestanding community-based centers. 

Radiation oncology centers have extremely high fixed costs. The 

minimum capital to build one is approximately 51⁄2 million dollars. 

Radiation oncology reimbursement rates have had cumulative payment cuts totaling approximately 20 percent for freestanding community-based centers in recent years. These payment cuts created 

instability throughout the profession, jeopardizing the viability of 

these centers and patient access to care. 

ASTRO very much appreciates Congress’ longstanding support of 

radiation oncology, perhaps best exemplified by the bipartisan passage of the Patient Access and Medicare Protection Act of 2015 or 

PAMPA. However, PAMPA is not a permanent solution and it only 

stabilizes radiation oncology payments temporarily through the end 

of 2018. We believe it is critical that radiation oncologists have an 

Advanced Alternative Payment Model before PAMPA expires. 

The Medicare Access and CHIP Reauthorization Act, MACRA, 

has provided ASTRO with an opportunity to pursue an APM that 

promotes high-quality care and moves us beyond the prior era of 

uncertainty. Recently, the Center for Medicare and Medicaid Innovation, CMMI, released a report to Congress which outlined design 

considerations for implementing an advanced APM in radiation oncology. ASTRO has proposed a Radiation Oncology Alternative Payment Model, the ROAPM, and we are pleased to see that our proposal is concordant with the concepts for an advanced APM in the 

CMMI report. 

Currently, there is only one oncology-focused advanced APM, the 

Oncology Care Model, the OCM. However, ASTRO is concerned 

that this model does not adequately address the needs of patients 

who need radiation therapy and ROAPM is needed to fully realize 

the benefit of multidisciplinary care for patients. And we believe 

95 

that the ROAPM would complement and build upon the foundation 

set forth by the OCM. 

The ROAPM is designed to incentivize the appropriate use of 

cancer treatments that result in the highest quality of care and 

best patient outcomes. The model applies to a comprehensive list 

of cancer disease sites that account for more than 90 percent of 

Medicare spending on radiation therapy and include breast, lung, 

prostate, colorectal, and head and neck cancers. 

The ROAPM uses care episodes that are clearly defined by billing 

codes that punctuate the beginning and end of a treatment course 

and the 90-day period thereafter. An episodic payment rate will enable practitioners to focus on high-value patient care. The model 

features a two-sided risk corridor with an opportunity for shared 

savings but also accountability for excess resource utilization. 

Throughout the episode, physicians must adhere to strict clinical 

practice guidelines. 

These guidelines help to ensure that patient care is appropriate 

and of the highest quality without over or undertreating patients. 

In addition, the model rewards participation in a robust practice 

accreditation program and measures performance on accepted quality measures to promote safe, high-quality care. The ROAPM also 

rewards shared decision making with patients, efficient communication with other providers caring for the patient, and survivorship planning. 

In summary, ASTRO would like to thank Congress very much 

once more for repealing the SGR with the MACRA legislation. 

MACRA has ended the significant instability associated with the 

SGR and created a forward-looking framework for the advancement 

of value-based care. ASTRO fully embraces the spirit and goals of 

MACRA and is committed to ensuring that radiation oncology can 

fully participate in advanced APMs to drive higher quality, cost effective cancer care. 

The proposed ROAPM incentivizes the use of appropriate cancer 

treatments that produce the best possible outcomes for patients, 

helps rein in Medicare spending, can stand on its own or dovetail 

with other APMs, uses well-established guidelines, and contains 

key patient engagement components. After experiencing significant 

payment cuts under Medicare fee-for-service in recent years, the 

field of radiation oncology needs long-term payment stability and 

predictability to secure patient access to care. ASTRO is committed 

to moving full speed ahead to ensure that radiation oncology can 

participate in advanced APMs under MACRA that drive greater 

value in cancer care. The next step is implementation of the 

ROAPM before December 31st, 2018. 

Thank you for the chance to speak with the committee. 

[The prepared statement of Dr. Kavanagh follows:] 

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U.S. House of Representatives 

Committee on Energy and Commerce 

Subcommittee on Health 

Hearing titled, 11MACRA and Alternative Payment Models: 

Developing Options for Value-based Care" 

Testimony of: 

Brian Kavanagh, MD, MPH, FASTRO 

Chairman, American Society for Radiation Oncology (ASTRO) 

November 8, 2017 
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The American Society for Radiation Oncology (ASTRO) represents more than 10,000 people who 

strive to give cancer patients the best possible care and to advance the science of oncology. 

ASTRO's membership includes radiation oncologists, nurses, cancer biologists, medical 

physicists, and other health care professionals who specialize in treating patients with radiation 

therapy. ASTRO's members work in various clinical settings including hospitals, freestanding 

community-based radiation oncology centers, and academic research institutes. Together, they 

make up the radiation therapy treatment teams that are critical in the fight against cancer. Of 

the estimated 1.7 million people diagnosed with cancer each year, ASTRO's medical 

professionals will treat more than one million of them, as close to 60 percent of all cancer 

patients will receive some form of radiation therapy as part of their treatment program. As the 

leading organization in radiation oncology, ASTRO is dedicated to improving patient care 

through professional education and training, support for clinical practice and health policy 

standards, the advancement of research, and advocacy. 

Radiation Therapy 

Radiation therapy, or radiotherapy, is the use of ionizing radiation to treat cancer and 

certain other diseases. Radiation therapy is proven to be safe and effective across a broad 

spectrum of cancer types. Radiation therapy works by disrupting the genetic material that 

drives cancer cells to grow and spread. When these damaged cancer cells die, the body's 

natural healing processes remove them. Normal tissues are also affected by radiation, but they 

are able to repair themselves in ways that cancer cells cannot. Radiation therapy has many 

benefits, including allowing patients to maintain their quality of life during treatment. Almost 
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all radiation therapy treatments are delivered as out-patient procedures; thus, patients receive 

treatment without the need to be hospitalized. 

Modern cancer care requires the coordination of multiple cancer disciplines and 

specialists who contribute to the overall care and well-being of the patient. For each patient, 

radiation oncologists develop and operationalize a multi-step, customized plan to deliver the 

radiation therapy exclusively to the tumor-bearing area while protecting the surrounding 

normal tissue to the maximum extent possible. Radiation therapy can be delivered in numerous 

ways: externally, internally, and through surface application. During external beam radiation 

therapy, the radiation oncology team uses a machine to direct high-energy x-rays or particle 

beams toward the cancer. Internal or surface radiation therapy, also called "brachytherapy," 

involves placing radioactive material (i.e., radioactive seeds) inside the patient or on the surface 

of their body. Depending on patient-specific considerations, the total radiation dose prescribed 

for the patient may be given in one session or over the course of multiple sessions. Systemic 

therapies, such as chemotherapy or immunotherapy, are often strategically combined with 

radiation therapy to provide synergistic benefits for patients with certain types of cancer. 

Radiation therapy is used in some cases as the only modality directed locally to the tumor, and 

in other cases it is given pre- or post- surgery to maximize the chance of the complete 

eradication of a primary tumor. 

Access to Radiation Oncology Care 

ASTRO is committed to always putting patients first and believes that moving away from 

fee-for-service to value-based health care will help patients and drive greater value in cancer 

care. The Society applauded the repeal of the Sustainable Growth Rate (SGR), which created 
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years of instability and uncertainty in health care, and supported the development of a new 

value-based Medicare physician payment system in the Medicare Access and CHIP 

Reauthorization Act (MACRA). 

Radiation oncology centers differ from most other specialty centers in that they have 

extremely high fixed costs. The minimum total capital required to build a freestanding radiation 

oncology center is approximately $5.5 million. These facilities require an additional minimum 

$2 million in annual operating and personnel expenses. A linear accelerator is the primary 

machine used to provide radiation treatment, and it stands about nine feet tall and 15 feet long 

and weighs more than nine tons. The machine must be housed in a specially shielded room with 

thick concrete walls. As a result, it requires millions of dollars to install the basic machinery 

before the first patient exam room is even added. This substantial upfront capital investment, 

combined with required machine maintenance contracts and salaries for highly skilled technical 

staff, means that fixed costs in radiation oncology are significant. About 60percent of patients 

treated with radiation therapy receive care in hospital outpatient departments, and the other 

40 percent receive care in freestanding community-based centers. Radiation oncology 

reimbursement rates have sustained significant cuts in recent years, resulting in cumulative 

payment reductions totaling approximately 20 percent for freestanding community-based 

radiation oncology centers. The payment cuts created immense instability throughout the field, 

jeopardizing the continued viability of these centers and patient access to the high-level care 

the centers provide. 

The onslaught of recent reimbursement reductions and future uncertainty is putting the 

profession at risk. ASTRO urges Congress to prevent any additional Medicare payment cuts to 
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community-based radiation oncology centers and preserve access to these critical services for 

the more than 400,000 cancer patients who are treated annually in community-based centers. 

Patient Access and Medicare Protection Act (PAMPA) 

ASTRO and the radiation oncology community remain extremely grateful for the 

bipartisan, unanimous passage of the Patient Access and Medicare Protection Act of 2015 

(PAMPA), which temporarily halted cuts to Medicare payments for radiation oncology through 

the end of 2018. PAMPA created a more stable environment for ASTRO to work with the 

Centers for Medicare and Medicaid Services (CMS) on an alternative payment model (APM) and 

valuation issues involving key radiation treatment delivery and image guidance codes. 

However, it is not a permanent solution, and time is running out. Fortunately, MACRA has 

provided the radiation oncology specialty with an exciting opportunity to pursue an APM that 

could achieve the goal of incentivizing high-quality, high-value care while also offering a longterm solution to this instability. ASTRO has used the temporary stability provided by the 

payment freeze in PAMPA to enthusiastically pursue a Radiation Oncology Alternative Payment 

Model (RO-APM). It is critical that radiation oncologists have an opportunity to participate in an 

APM to realize the goals of MACRA. 

PAMPA also included a mandate for the Center for Medicare & Medicaid Innovation 

(CMMI) to research and develop a report on an alternative payment model for radiation 

oncology. On November 3, 2017, CMMI released their report to Congress, "Episodic Alternative 

Payment Model for Radiation Therapy Services." The CMMI report outlined important payment 

model design considerations for implementing an Advanced APM in radiation oncology. The 

report describes the delivery of radiation therapy services, why Medicare beneficiaries may 
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need radiation therapy services, and how Medicare pays for these services. The report also 

described several APM design considerations: the rationale for such a model, expectations of 

clinical practice transformation, the potential scale and alignment with other initiatives, and the 

measurement of improved clinical quality and patient experience. The report also noted that 

the model could address many of the challenges with the current payment systems and that it 

has the potential to provide stability in radiation therapy payments. 

ASTRO appreciates that the CMMI report identifies the key model design elements and 

provides a viable path forward to ensure the field of radiation oncology can be at the forefront 

of efforts to improve the patient experience, elevate treatment quality, and lower overall costs 

for cancer patients. ASTRO was pleased that the report aligned with the ASTRO-proposed 

RO-APM. We believe the RO-APM will incentivize the appropriate use of cancer treatments that 

result in the highest quality of care and best patient outcomes. In addition to the enhanced 

patient experience, ASTRO supports the sentiments expressed in the report aimed at providing 

stability in radiation therapy payments by creating the RO-APM to address the unique needs of 

the profession. 

Radiation Oncology Alternative Payment Model (RO-APM) 

Currently, there is only one oncology-focused model in the Advanced APM portfolio: the 

Oncology Care Model (OCM). While the OCM is a step in the right direction, there is a risk that 

it could inadvertently discourage optimal multidisciplinary care coordination. The OCM's 

potential unintended consequence is to incentivize an overly minimalist approach. As a result, 

practices may be rewarded for excluding certain therapies, including radiation therapy, within 

each six-month episode of care. ASTRO believes that the RO-APM will complement and build 
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upon the foundation set forth by the OCM and encourage the interdisciplinary coordination of 

care for cancer patients' overall well-being. 

ASTRO embraces the spirit and goals of MACRA and is committed to ensuring that 

radiation oncology can fully participate in an APM that drives greater value in cancer care. 

ASTRO has been working with stakeholders to develop the RO-APM in a form consistent with 

the goals of MACRA. The Society believes the recent report from CMMI validates the 

collaborative process and diligent efforts that were undertaken to construct the RO-APM. 

The RO-APM would provide the field of radiation oncology with a meaningful and viable 

opportunity to participate in the evolving world of health care payment reform as initiated by 

MACRA. The model has three primary goals: 

1. To reward radiation oncologists for participation and performance in quality initiatives 

that improve the value of health care for patients. 

2. To ensure fair, predictable payment for the radiation oncologist in both hospital and 

freestanding community-based cancer centers to protect cancer patients' access to care 

in all settings. 

3. To incentivize the appropriate use of cancer treatments that result in the highest quality 

of care and best patient outcomes. 

Stakeholders involved in the development of the RO-APM include leading members of 

the radiation oncology community who practice in hospital and/or freestanding communitybased radiation oncology centers. In addition to engaging key stakeholders, ASTRO has closely 

monitored the activities of the Physician-Focused Payment Model Technical Advisory 

Committee (PTAC). ASTRO also met with the CMS Innovation Center on multiple occasions to 
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solicit advice and guidance from agency experts regarding the development of Advanced APMs. 

It is ASTRO's goal to provide stability to the delivery of radiation therapy for patients, and the 

radiation oncologists who treat them, by attaining implementation of the RO-APM before 

January 1, 2019. 

The American Cancer Society estimates there were 1.7 million new cancer cases in 2016. 

Among these cancer patients, 250,000 were diagnosed with breast cancer; 225,000 were 

diagnosed with lung cancer; 181,000 were diagnosed with prostate cancer; 95,000 were 

diagnosed with colorectal cancer; and 72,100 were diagnosed with head and neck cancer. 

Medicare SEER data analysis indicates that, of the Medicare patients receiving radiation 

therapy, 83 percent had one of the five primary disease sites, accounting for 93 percent of the 

total Medicare spend on radiation therapy services between 2007 and 2012. 

The RO-APM applies to the five primary disease sites: breast, lung, prostate, colorectal, 

and head and neck. Individual disease sites are not divided further for the purposes of payment 

(e.g., all breast cancer cases have the same modeled payment). The model also applies to two 

secondary disease sites: bone metastases and brain metastases. The primary disease sites 

usually involve curative treatment, while the secondary disease sites typically involve symptomrelieving palliative intent. The RO-APM replaces fee-for-service payment with an episode-based 

payment that remains the same regardless of the course, modality, or length of treatment. 

Through this structure, the RO-APM meets the goal of replacing volume-based care with valuebased patient care. With many hurdles along the way, ASTRO believes that technical assistance 

from PTAC, and data sharing from CMS, would be beneficial for all organizations looking to 

create an APM, as access to CMS data was critical in creating the RO-APM. 
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According to the RO-APM, when a patient has an International Classification of Diseases 

(ICD-10) diagnosis code corresponding to one of the seven disease sites included in the model, 

eligibility is established. After the patient gives informed consent to be treated with radiation 

therapy, an episode is triggered by one of three distinct radiation therapy treatment planning 

codes: Current Procedural Terminology (CPT) codes 77261, 77262, or 77263. The episode of 

care begins at this time and concludes 90 days after the last radiation therapy treatment. 

Throughout the episode, participating physicians must adhere to well-vetted clinical practice 

guidelines, including ASTRO guidelines, where applicable, and the National Comprehensive 

Cancer Network (NCCN) guidelines. ASTRO believes that the requirement for guideline 

adherence is a major strength of the RO-APM. These guidelines help to ensure that patient care 

is appropriate and of the highest quality without over- or under-treating patients who need 

radiation therapy. 

Medicare claims data from a specific reference period will be used to determine 

payments per episode within a disease site. A participating provider's target rate will be based 

on a blended average of his or her own practice's historical reimbursement rate, along with 

regional and national benchmark rates for the same episode of care. The provider will be paid a 

portion of the target rate once an episode is triggered and a portion of the target rate at the 

completion of the episode. The model features a two-sided risk corridor, in which a provider 

may share in savings if spending is lower than the target. However, providers who exceed the 

target would be responsible for any overpayment up to a specific amount. These tenets are 

part of the built-in guardrails to ensure that appropriate care is being provided throughout the 

treatment delivery process. 
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The quality component of the RO-APM is comprehensive. It begins with a patient 

engagement component that involves shared decision making, nurse care management, care 

plan development, specialty care communication, and survivorship planning. ASTRO has 

established the Accreditation Program for Excellence (APEx), and to achieve APEx certification 

requires meeting or exceeding a series of standards relating to the quality performance of a 

radiation oncology practice. To be recognized for the highest level of quality in the RO-APM, 

APEx accreditation or accreditation through a similarly rigorous program is necessary. 

Additional quality measures based on guidelines that are disease-site-specific will be layered on 

top of accreditation. The purpose of these quality measures is to track how frequently 

participating practices are adhering to the specific guidelines identified as part of the model. 

Adherence to clinical guidelines can improve the quality, outcomes and cost effectiveness of 

health care. After a pay-for-reporting period to establish a benchmark for quality data, a payfor-performance mechanism will be implemented. This mechanism will modify payment in 

future years based on quality performance. Similar to the Bundled Payments for Care 

Improvement {BPCI) model, the base rate discount will be modified in future years based on 

quality measures' performance in a prior year. 

We believe the RO-APM is consistent with Advanced APM characteristics stated in the 

Quality Payment Program {QPP). We are further encouraged by the recent CMMI report to 

Congress endorsing that physicians should assume accountability for controlling the total cost 

of Medicare spending related to the treatment of cancer with radiation therapy, as well as the 

total cost of Medicare spending on all services the patient receives during the episode of care. 
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Conclusion 

ASTRO appreciates Congress' longstanding strong support of radiation oncology, which 

has contributed substantially to better cancer outcomes while protecting access to care. The 

Society has devoted significant resources to the development of the RO-APM and is committed 

to ensuring that radiation oncology can meaningfully and fully participate in Advanced APMs to 

drive greater value in cancer care. ASTRO believes that the RO-APM: 

• lncentivizes the use of appropriate cancer treatments that produce the highest 

quality and best outcomes. 

• Helps physicians assume accountability for controlling the total cost of Medicare 

spending related to cancer during the episode of care. 

• Can stand on its own or dovetail with other oncology alternative payment models. 

• Requires adherence to nationally recognized clinical guidelines. 

• Contains patient engagement components including shared decision-making, nurse 

care management, care plan development, specialty care communication, and 

survivorship planning. 

After experiencing significant payment cuts under Medicare fee-for-service in recent 

years, the field of radiation oncology needs long-term payment stability and predictability to 

secure patient access to care. It is critical that there is an Advanced APM option available to 

radiation oncologists before the PAMPA payment freeze expires December 31, 2018. ASTRO 

believes the RO-APM is a smarter way to pay for radiation oncology services and will lead to 

better value for Medicare and patients. ASTRO looks forward to continued opportunities to 

work with Congress and CMMI to refine and implement this model. 
107 

Mr. BURGESS. The Chair thanks the gentleman. 

And Dr. Opelka, you are recognized for 5 minutes for an opening 

statement, please. 

STATEMENT OF FRANK OPELKA 

Dr. OPELKA. Mr. Chairman, Ranking Member Green, distinguished members of the committee, we thank you for the opportunity, the privilege to come before you today on behalf of the 

84,000 members of the fellows who are members of the American 

College of Surgeons. 

MACRA, to us, created a unique opportunity for physicians to 

lead in the development of APMs. When you think about it, since 

the inception of fee-for-service over a half a century ago, clinical 

care has become increasingly more complex. We have many more 

medications and technologies upon which to treat patients. And the 

only way to succeed has been for us to form teams, teams of care 

around patients for which these patients suffer. 

So we have come together in thinking about Alternative Payment 

Models in team-based episodes of care to add to the library of Alternative Payment Models to be considered. We lacked the opportunity to build business models or payment models around teambased care until MACRA came along with the advanced APM opportunity. When you consider what has to go forth in building that 

APM model there are five general principles that I think that 

would be helpful to think about as you do this. 

First is the clinical care model, something we as clinicians are 

all expert at, and those are those complex models of team-based 

care that have changed today. Second are the quality measures 

that assure that those models are effective. Third, what are the 

payment models the insurer has? That is that technical component 

that makes it difficult to build the APM. We as clinicians are not 

those who have the technical skills of building the payment model 

aspects. 

Fourth is changing our business operations from fee-for-service 

into these alternative risk-based models. And fifth, the actual 

structure of risk, what is involved? There are all sorts of aspects 

to risk. There is insurance risk. There is clinical risk. There is 

operational risk of having the right team ready to meet those clinical risks. 

The PTAC has been a wonderful experience for us. We learned 

with them. They were hypercritical of our model and helped us in 

framing the model and making necessary adjustments and corrections to the model. There was an enormous back and forth between 

our team, the American College of Surgeons, and our partner Brandeis University in building the APM model. We partnered with 

Brandeis because of their knowledge in the Medicare cost measurement system and their role in developing the CMS Episode Grouper that is used by Medicare to frame the actual cost structure of 

different episodes. 

The Episode Grouper allowed us to provide risk-adjusted, patient-individualized, significant target prices. Not a bundle, but a 

patient episode price, extremely granular information that allowed 

us to create an operational model for national scaling of an implementation of an APM. When we come about the quality aspect of 

108 

this, the ACS has a centurylong experience in multiple registries 

that we use worldwide in defining, measuring, and improving quality of care. 

Our ACS optimal resource for surgical quality and care and safety division runs things like the National Surgery Quality Improvement Program. These gave us a framework upon which to build an 

episode-based measure framework. Stop measuring physicians and 

measure patients. How did the patient do? If the patient did well, 

reward the team. If the patient didn’t do well, it is time to penalize 

the team. 

So let’s measure patients and what they do and not the individual physicians and make us all have shared accountability because that is what patients expect us to do. We have added to this 

the ability to put in the phases of care across the episode. For example, in surgery there is a preop phase, an intraop phase, a 

postop phase, post-discharge phase. We have also put in patient-reported outcomes which we think create meaningful measures. So 

instead of measuring here and there across a surgeon’s experience, 

we are measuring the episode for the patient. We think that is 

critically important. The episode-based measure framework coupled 

with the EGM allows us to create quality cost measures with teams 

of providers to influence the patient experience and outcome. 

Assigning risk—this is the difficult part. Asymmetric risk, we 

don’t think symmetric risk, same upside-downside risk really draws 

in what we need. We think you need asymmetric risk, more upside 

to bring people out of fee-for-service into the model and significant 

enough downside to protect the patients and the payer as well. 

So that is the nuts and bolts of what we put forward. The PTAC 

process has given us considerable experience and input. And moving forward now, we have gone through PTAC in December all the 

way through March with approval in April. That went to the Secretary, and within a couple months we heard back from the Secretary giving us further direction, further clarification, testing and 

piloting with CMS and CMMI. We have been working with them 

almost on a weekly basis since then in walking forward in 

workgroups to deal with intellectual property, refinement of validity and reliability of the modeling, further questions about how the 

EGM grouper is used in the model, and the quality and the risk 

adjustment aspects of the overall model. 

Once again, Mr. Chairman, we thank you and your committee for 

all your efforts in this regard, and we look forward to your questions. 

[The prepared statement of Dr. Opelka follows:] 

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!OO+years 

AMERICAN COLLEGE 

OF SURGEONS 

Inspiring Quality: 

Highest Standards, 

Better Outcomes 

Statement of the 

American College of Surgeons 

Presented by 

Frank Opalka, MD, FACS 

Before the 

Subcommittee on Health of the 

Committee on Energy and Commerce 

United States House of Representatives 

RE: MACRA and Alternative Payment Models: 

Developing Options for Value-Based Care 

November 8, 2017 
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Chairman Burgess, Ranking Member Green, and Members of the Committee, on 

behalf of the more than 80,000 members of the American College of Surgeons 

(ACS), I wish to thank you for inviting the ACS to participate in this hearing. We 

have been very active in working to improve the value of care, both through our 

longstanding commitment to continuous quality improvement as well as our more 

recent endeavor to develop the ACS-Brandeis Advanced Alternative Payment Model 

(A-APM) proposal. 

MACRA and the Decision to Develop an APM 

In the weeks following the enactment of the Medicare Access and CHIP 

Reauthorization Act (MACRA), our advocacy and policy team began the work of 

reviewing our analysis of the bill with implementation in mind. As part of this, the 

ACS took stock of the existing alternative payment models that were available for 

surgeons, and decided that part of our MACRA implementation strategy would need 

to involve the development of new options for participation for surgeons consistent 

with modern surgical practice in team-based episodes of care. The payment 

structure and incentives in the law make it clear that over time the surest way to 

succeed will be to transition into new payment models designed to provide additional 

flexibility in care design to those willing to take on financial risk. 

While opportunities to meaningfully participate in such models were limited for 

surgeons (due to geography, specialty, practice style, etc.) the law also created a 

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new pathway for creation of APMs, the Physician-focused Payment Model Technical 

Advisory Committee, or PTAC. 

The ACS takes its responsibility in contributing to improved health care quality 

seriously. As some of you may remember, a little more than five years ago our 

Executive Director, Dr. David Hoyt testified before this panel on our efforts at that 

time to develop innovative payment strategies as part of a replacement for the 

sustainable growth rate (SGR). With the passage of MACRA and the creation of the 

PT AC we saw an opportunity to refocus our efforts toward creation of an APM that 

would meet the requirements under MACRA, meet the needs of surgeons, and 

provide new tools for participants to improve care for our patients. 

In developing a new payment model, there are at least five important elements 

which need to be considered. These include: 

Clinical care model: What changes can be made to the way we do things to 

improve the quality of care to the patient and clinical outcomes? 

Quality measurement: What processes, outcomes and patient reported 

experiences are worth keeping track of and how do you use that information to 

adjust payments? 

Payment model: How should we change the way we pay for health care to 

incentivize appropriate, high quality, efficient team-based care? For example, we 

intend to seek payment models tied to increased quality and reduced utilization 

through a novel shared savings framework. 

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Business model: How do you structure participation so that the necessary team of 

physicians would join together with APM entities, or form them, in order to create 

shared accountability for the patients for whom the team provides care? And how 

could the models attract private payers? What is the value proposition for the 

involved stakeholders? 

Risk structure: Transferring risks from insurers to providers requires careful 

consideration. There is a difference between clinical risks that providers can 

reasonably assume and insurance risks that providers should avoid. How are risks 

structured within the constraints of behavioral economics to offer enough upside risk 

to attract participants and adequate downside risks to protect patients and the goals 

for optimal care? What limitations do you place on downside risk for cost overruns or 

not maintaining quality so that you meet MACRA advanced APM requirements while 

limiting potentially catastrophic losses? 

For physicians and those deeply engaged in patient care, it is a natural tendency to 

begin from the clinical care model and subsequently add the other elements of 

quality, risk, and alternative payment models folded into new business operations. 

Starting by building multiple clinical models, each with its own underlying payment 

model would, however, be administratively difficult for participants and payers to 

implement and scale across the nation. 

In contrast, we chose to partner with a team at Brandeis University who had in-depth 

knowledge of Medicare cost measurement and analysis. Our partners at Brandeis 

had developed software known as the CMS Episode Grouper for Medicare or EGM. 

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This software represents years of work and provides an in-depth, objective view of 

how care is currently provided. A combination of painstakingly developed clinical 

episode definitions and complex algorithms allow the software to automatically 

assign relevant charges to a team-based episode and assign providers to clinical 

roles in the episode based on which services they provide to the patient. 

The EGM also looks at the patient's other current and historical episodes, both to 

provide risk adjustment and to ensure that each dollar spent is counted only once. 

This allows our model to produce risk adjusted, patient specific target prices for each 

episode. It also allows us to show extremely granular information on the causes of 

variation. And, this model allows for all physicians and all payers to share a 

common operational model in order to assist in a national scale for implementation. 

Quality 

The ACS has over a century of experience in defining, measuring and improving 

quality. The ACS has long believed that the current approach to quality 

measurement is narrow, complex, costly and slow to adapt to changing care 

patterns. We see MACRA, and particularly APMs, as an opportunity to propose and 

implement new measurement strategies. Currently available measures are 

frequently irrelevant to surgical care and in fact in some reporting options providers 

may be scored for quality based on care they played no role in providing. 

Our recently-published "Optimal Resources for Surgical Quality and Safety" is 

designed to be a valuable resource for surgeons as they work to improve the quality 

of care they provide and to improve patient safety. While our knowledge is primarily 

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in surgical care, the lessons learned have helped us to create an environment of 

continuous quality improvement and patient-centered care that can be easily 

adapted to a wide range of health care with the participation and clinical expertise of 

the wider physician community. 

Phases of Care 

Surgical care, and in fact all health care, occurs in phases. The ACS believes that 

registry-based quality measures that encompass the phases of care, along with care 

coordination and incorporation of patient reported outcome measures (PROs), will 

be meaningful and important to both surgeons and surgical patients. For example, 

measuring quality across the phases of surgical care (those being preoperative, 

perioperative, intraoperative, postoperative, and post-discharge) may include items 

such as documenting the surgical plan and patient's goals of care, screening the 

patient for things that could affect outcomes such as frailty and tobacco use and 

helping them to prepare for surgery, taking time out to review safety checklists, 

documenting a post-operative care plan and communicating that plan with the 

patient, his or her family and their primary care provider and measuring success in 

preventing infections, readmissions and reoperations. Adding in PROs provides a 

patient perspective and further validates the value and success of the process 

measures. The measures described are broadly applicable to many surgeries but 

can be customized for individual specialties or procedures to reflect the most 

pertinent processes and outcomes for a given episode. 

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Measuring quality in this way has the added benefit of lining up well with cost 

measurement to paint a much more detailed picture of the value of care provided. In 

the ACS-Brandeis model, performance in what we refer to as an episode-based 

measure framework is used to adjust payments, providing maximum incentives to 

those providing the highest value care. 

Team-based Nature of Patient-centered Care 

The model that we have developed is broadly applicable to the full range of health 

care providers. As noted in the ACS' recently updated joint statement on physicianled team-based surgical care, "optimal care is best provided by a coordinated 

multidisciplinary team recognizing each member's expertise. Coordinated surgical 

care provides best outcomes, lowers costs, and increases patient satisfaction." 1 Our 

episode-based measurement framework coupled with the EGM allows for quality 

and cost measurement designed around the patient and the full team of providers 

who have influence over the patient's experience and outcomes. 

Sometimes the highest value surgery for a patient is no surgery at all. The 

capabilities of the EGM allow the ACS-Brandeis model to incentivize the avoidance 

of unnecessary care through appropriate interventions. The model contains both 

treatment episodes and condition episodes. Related treatment episodes can be 

nested within condition episodes in a way that appropriately apportions costs and 

avoids double counting of Medicare dollars. 

1 http://bulletin.facs.org/20 16/08/ statement -on-physician-led-team-based-surgical-care/ 

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Ultimately with the further development of additional treatment and condition 

episodes and the analysis of participant data, this model could allow sophisticated 

health systems to take on global risk for a patient population or risk for the care of 

specific clinical chapters. 

Recruiting Clinical Expertise 

Once it became apparent that our model was suitable for (and in fact hinged on) 

participation of the entire team involved in providing care to the patient, we began 

building a community. We first reached out to other surgical societies to fill them in 

on the early details of the model, but we soon expanded to other groups involved in 

caring for surgical patients and have welcomed participation and input from any 

interested groups whether they care for surgical patients or not. We leveraged this 

community to help further validate the clinical content and have leaned on them for 

their expertise in quality measurement around the care they provide. 

Over the next several months, we held a series of in-person meetings and webinars 

to educate interested parties on the model and exchange ideas. The model has 

greatly benefited from this participation. Since our model does not mandate narrow 

clinical pathways, there are significant opportunities for innovation for the clinical 

experts. It is our intent that the ACS-Brandeis model will provide the tools, structure 

and incentives for these ideas to flourish. 

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The PT AC Experience 

Soon after the PTAC announced its process for accepting new models we submitted 

our letter of intent and began the work of organizing our materials into the mandated 

structure based on the ten required criteria. We were the first organization to submit 

a proposal in December of 2016. Given the newness of the PTAC and the broad 

scope of our proposal I think it is fair to say that it has been a learning experience on 

both sides, with many practical questions being addressed as they arose. 

Between December 2016 and March 2017, ACS and Brandeis staff were kept busy 

with a series of questions and requests for clarification and additional information 

from the three-member preliminary review team assigned to our model. While we 

had intentionally designed the model to be flexible, these questions challenged us 

and helped us to refine various aspects of the model. 

The ACS-Brandeis A-A PM was one of the first three models considered by the 

PT AC at its April meeting and was one of two that were voted on favorably at that 

meeting, after much deliberation and with strong support from the community of 

organizations that had participated in the model's development or followed its 

progress. 

This victory was followed by an eight-week period in which we recovered from the 

previous months' flurry of activity and waited patiently for the PTAC's formal report 

and recommendation which was transmitted to the Secretary in early June. We then 

experienced a slightly more nerve-wracking period of anticipation while we waited 

for the Secretary's response. Since our model was again among the first to reach 

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this milestone, we had no idea of what to expect next or when to expect it. In fact, 

we were told that "there is no required timeline for the Secretary's response to 

PTAC's comments and recommendations." In the interim, we spent a great deal of 

time working to educate interested organizations and potential partners and have 

been contacted by several other organizations interested both in our model, and in 

gleaning advice in navigating the PT AC process and developing physician focused 

models of their own. 

It was another three months until we received the Secretary's positive response and 

were contacted by representatives from CMS and CMMI to begin the next phase of 

refining and validating the model in preparation for testing. This is work that we are 

currently engaged in. 

Overall, our experience in navigating the pathway for physician-focused payment 

models created by MACRA has been a time consuming and complex yet rewarding 

experience. We have taken the long view in development of our model, shooting 

for a model that will ultimately serve the needs of our patients and provide 

meaningful APM participation options for the broadest range of our members and 

other providers. 

I, and the ACS appreciate the chance offered by the Chairman and the committee to 

share our story and experience in developing our APM proposal. While we are 

closely monitoring and regularly weighing in with CMS on all aspects of the 

implementation of MACRA, it is this opportunity for payment and care model design 

and development that we find most promising. This process is unprecedented in its 

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transparency, and leans heavily on the expertise of medical providers and it is for 

these reasons that we believe it will succeed. We look forward to keeping you 

informed of our continued progress as our model moves forward with refinement, 

testing, and hopefully implementation. 

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Mr. BURGESS. The Chair thanks the gentleman and thanks to all 

of our witnesses for participating today. We will move to the question and answer portion of the second panel and I will recognize 

Dr. Bucshon from Indiana for 5 minutes, please. 

Mr. BUCSHON. Thank you, Mr. Chairman. Thanks, everybody, for 

being here. I was a cardiothoracic surgeon before I was in Congress 

so I also reiterate what the chairman said about how great it is to 

have an entire panel of physicians here at the Health Subcommittee. 

A couple of quick things. The American College of Surgeons, Dr. 

Opelka and others, proper risk, and this is a little off the beaten 

path, but proper risk stratification of patients and assessing patient outcome and how important that is, I mentioned in the previous panel the STS database and other, you mentioned some databases. 

I mean one of the things I have always been concerned about as 

a physician when we are trying to design what is quality of care, 

how important is, I think, individual specialties assessing the risk 

stratification in the patient group that is in their area. How important do you think that is? 

Dr. OPELKA. So if we are rewarding based on outcomes, there is 

nothing more important than actually having accurate risk adjustment and that comes ideally from clinical data. So we have worked 

on this modeling with folks like STS. How do we use the STS database to validate the current risk adjustment and how do we use future versions of STS in this modeling to make enhancements? We 

think that is the kind of work that needs to be done so that you 

get proper risk-adjusted pricing as well as proper risk-adjusted 

quality measurement. 

Mr. BUCSHON. Anyone else? Dr. Wulf? 

Dr. WULF. Two comments. I think data is useful, not only for risk 

adjustment to identify your high-risk patients, but we as primary 

care need accurate data to identify value in our specialists. Historically, a primary care physician refers to a specialist based on either 

knowing them and their kids play soccer together, they trained together. We think of specialists as quality, but data is so important 

as we in primary care seek value for our patients and we can identify that through data. 

Mr. BUCSHON. Dr. Varga? 

Dr. VARGA. Yes, sir. And we would agree. Further, probably the 

biggest issue for us is having adequate data as mentioned to be 

able to do risk stratification. But it is not just simply to get the 

right pricing, it is actually to understand the level of care that the 

patient requires at any point in the continuum and then understand how to match resources to that level of risk stratification. It 

is critical whether you are talking about a primary care scenario 

or whether you are talking about a complex cardiovascular surgery 

case. 

Mr. BUCSHON. Anybody else have a—— 

Dr. EDGERTON. I would agree. From the rheumatology perspective we know that our patients with rheumatoid arthritis suffer 

from other comorbidities that have a massive impact on their outcomes, but that is also important when we are looking at the cost 

of their care. We have struggled to extract that data from our 

121 

EHRs despite the fact that we spend large amounts of time entering data into the EHRs. We have designed a clinical data registry 

called a RISE Registry as a college to help us do that, to extract 

some of that data, but it continues to be a struggle. 

Mr. BUCSHON. Yes. I agree with everything everybody said because I think Government agencies tend to maybe think if you give 

a couple of little, a couple data points in health care like overall 

morbidity or overall mortality without getting a bigger, deeper 

dive, especially specific deeper dive, you can, these things don’t 

work out that well because it is just not specific enough. 

Dr. Wulf, you probably know I read, I co-led the letter to CMS 

about certain payment arrangements between Medicare Advantage 

plans and physicians as advanced APMs under MACRA. And I understand, you mentioned CMS has come out and said that a new 

MACRA rule that they would be initiating a demonstration project 

to test the approach, and I know CAPG has been a leading voice 

in pushing this. 

So can you talk about the importance of APMs in a little more 

depth than you did in your testimony as it relates to Medicare Advantage and why CMS should move quickly along with this demo? 

Dr. WULF. Yes, and thank you for that effort, Dr. Bucshon. Just 

like as we entered into shared savings and now risk with Medicare 

Advantage, we were able to provide for that subgroup of our seniors certain benefits that we were able to pay for with a per-member, per-month payment. Through CPC+ we were able to expand 

those benefits to all of our seniors. 

So just as we are now with APMs recognizing and providing programs for Medicare, it would be unfair to exclude the one-third of 

patients in Medicare Advantage from those type of fundings that 

all medical groups use to create coordinated care. So I think it is 

important that all programs are for all seniors, fee-for-service 

Medicare and Medicare Advantage and I think this is a step in 

that direction. 

Mr. BUCSHON. OK, thank you. 

I yield back, Mr. Chairman. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentleman from Texas, Mr. 

Green, ranking member of the subcommittee, 5 minutes for questions, please. 

Mr. GREEN. Thank you, Mr. Chairman. I want to thank our 

whole panel for joining us today. 

Dr. Varga, I understand that transitioning from a healthcare organization to an Alternative Payment Model can be challenging 

and there are a lot of moving parts to consider. In your testimony 

you discuss how MACRA encouraged Texas Health Resources to 

participate in the Next Gen ACO model. Can you speak a little 

more about what it is like at Texas Health Resources before implementing the Next Gen ACO model and why this model was the 

best fit for your organization as opposed to an APM? 

Dr. VARGA. Yes, sir, happy to respond. As I pointed out in my 

oral testimony, first and foremost for Texas Health Resources and 

for the Southwestern Health Resources ACO, this was an issue of 

access to care. With a large percentage of the doctors in North 

Texas not participating in fee-for-service Medicare program there is 

122 

a very difficult scenario for folks who are aging out of commercial 

insurance and aging into Medicare actually finding a primary care 

doctor and in some situations a specialist who actually accepts patients in the fee-for-service model. 

A bit of workforce constraint as well in the Medicare Advantage 

program there as well, one of the things we really wanted to make 

sure we did with this is by offering the incentive programs that 

come through the Next Gen Alternative Payment Model, we are 

able to actually incent physicians to participate and continue to see 

Medicare fee-for-service patients. 

I think the other thing that we are experiencing in this is the 

ability to really coordinate care across the full continuum with our 

physicians, whether it is specialists or primary care. We have already shown that we can generate savings in the model. We already started to demonstrate that we can actually, in very targeted 

areas with adequate data, start to decrease, which in North Texas 

is a big issue which is overutilization of post-acute services whether 

it be rehab, skilled nursing facilities, or home health. 

So the program has made an incredible impact on us, and we, 

like Dr. Wulf’s group, believe that we can extend that into the 

Medicare Advantage program as well as move forward. 

Mr. GREEN. How did MACRA and the opportunities it created 

hasten this decision to engage in a delivery system reform and participate in the Next Gen ACO model? 

Dr. VARGA. I think probably the reason that MACRA accelerated 

this is in the MSSP Track 1 program that we have historically participated in, the cap on upsides really created a model that, in 

terms of looking at what sort of benefits we could return to physicians in that model, was relatively limited. The other piece of the 

Track 1 model that was very different from Next Gen is some of 

the waivers we get in Next Gen to be able to more aggressively coordinate care across the full continuum and actually take in different sorts or adopt different payment models like advanced care 

coordination fees, sub-capitation, actually full cap, really creates a 

model where we can actually get our group of folks to manage 

these patients across the full continuum. 

The ability to create value, both for the patients and for the physicians in the network, is far superior to the model we had in Track 

1. 

Mr. GREEN. What was the challenge to get your providers to get 

comfortable with the level of financial risk posed by the Next Gen’s 

ACO model? 

Dr. VARGA. Well, that is one of the reasons we believe in this integrated model is that as it was mentioned earlier, the concept of 

asymmetric risk is one that is tolerated in this. So given that the 

health system and the Part A expense of the model is usually the 

most expensive piece of this, the health system provider can absorb 

upfront the bulk of the risk, both the risk incurred by building infrastructure, but also the potential for downside risk and the ability to help physicians manage that piece as they went forward. 

So we really had very little resistance to the providers stepping 

in to a two-way risk model. 

123 

Mr. GREEN. And what type of infrastructure changes in provider 

education did Health Resources require to implement that Next 

Generation ACO? 

Dr. VARGA. The biggest change above the MSSP Track 1, which 

we had been in for the last 3 years, was really a far more aggressive care coordination model for mostly the post-acute world. That 

is really in our ACO where the data points us. We had already undertaken a fairly significant investment that allowed us to help our 

doctors get onto a common electronic health record platform with 

us, a common disease registry platform to point out gaps in care, 

and a common analytics platform for reporting. The biggest issue 

was actually in putting the technology and bodies in place to be 

able to do the post-acute care coordination model. 

Mr. GREEN. Mr. Chairman, normally as a lawyer I have plenty 

of lawyers in the room, today we have plenty of physicians. And I 

think that is what is important, to make sure you are comfortable 

with what we are doing and again not recreating an SGR that goes 

17 years and really hurts medical practice and your patients. So 

thank you for having the hearing. 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman. 

And Dr. Friedman, Ranking Member Green brings up an excellent point. And as I was talking to you before the hearing convened, I can remember a morning probably 2005 or 2006 when I 

had to face a roomful of your participants all sitting around little 

round tables down in a room in the basement of this building, and 

it was significantly stressful. I thought everyone was going to be 

eager to hear what my thoughts were on repealing the SGR, but 

nobody wanted to hear what they were. They just wanted it done, 

and they wanted it done last week. 

So I felt the anxiety. It only took us 13, 14 years to get to this 

point, but it was largely your group, that group of doctors that 

morning, that really provided the, you know, the lift and the thrust 

to get this thing done. Do your doctors ever talk about that now? 

Are they grateful the SGR is gone or have we just moved on and 

now we are at the next thing? 

Dr. FRIEDMAN. Sorry. So just repeat that last part of the question. 

Mr. BURGESS. Well, are your doctors, do they talk about things 

like that now? Are they grateful the SGR is gone or are they just 

worried about the next phase? 

Dr. FRIEDMAN. I think it is a mix. You know, I think, you know, 

I spent a fair amount of time polling my colleagues in the office before I came to do this and I get mixed remarks. From the standpoint of patient care we have seen some big benefits. Care coordination has improved and outreach to patient has improved. We 

don’t go to the hospital anymore. We are just strictly outpatient 

doctors, so we are in the office. And from that standpoint we have 

gotten very good at retrieving the information and getting the patients into the office so there is continuity of care. 

So things have been great. And I have to say that, you know, the 

fee-for-service model was not working for us. I mean we, had we 

not embraced this model, had we not embraced CPCI and PatientCentered Medical Home early on and now CPC+, we would have 

124 

sold our practice to a larger system. So I think they would all acknowledge that. 

That being said, I think the administrative burden that we see 

in the office, the physicians’ administrative burden, and also my 

administrator’s, the amount of work that she has to do has increased, and that is a bone of contention. 

Mr. BURGESS. Very good. 

Dr. Varga, you in your testimony talking about that Premier 

doesn’t simply want to employ physicians, you want to create those 

high-value networks so you have doctors who are basically private 

practice doctors who are working within your network; is that correct? 

Dr. VARGA. We do. 

Mr. BURGESS. And kind of a 60/40 split on that between employed physicians and independent physicians? 

Dr. VARGA. With the 60 being the independent PCPs. 

Mr. BURGESS. How do you allow them to maintain their own 

independent practices and at the same time conforming to the 

measures that you are requiring to improve outcomes? 

Dr. VARGA. It is a good question. I think the biggest issue for us 

as we started was actually getting everyone to commit to a pluralistic physician model where in large part we are largely agnostic 

to the physician economic relationship with the health system. 

So as we said we have faculty, we have employed, and we have 

independent PCPs. We also have independent specialists who participate with our ACO in a nonexclusive fashion through a series 

of structures that we have built inside the ACO. I think the common thread, Mr. Chairman, is simply that, independent of the economic relationship folks have with this, we all have aligned incentives, we all work off of a common infrastructure, and we are all 

held accountable to the same clinical performance metrics. 

And we really believe that it is highly valuable to have that pluralistic model in play because an employed-only model really tends 

to drive you to one sort of structure. It can work, but you don’t 

really learn from the independent practice proposition. You also 

don’t learn from folks who are nonexclusive to your network as 

well. 

Mr. BURGESS. So you also talk about the anxiety and complaints. 

How is that part of it going? 

Dr. VARGA. You know, it has actually gone fairly well. You know, 

we are fortunate in North Texas that the economics of the two-way 

risk ACOs are actually a little bit better than they are in some 

other areas of the country, so we have been able to produce shared 

savings at a fairly hefty rate for the last 2 or 3 years. We still have 

complaints, and I think one of the things that we will start to really encounter as we go forward is we have not yet had to really, 

really drive the narrowness of the network in terms of—— 

Mr. BURGESS. Have not. 

Dr. VARGA. We have not, in large part because the physicians 

have largely performed to the set of standards that we have set in 

predominantly a one-way risk model. As you get into a much more 

aggressive two-way risk model, as you get into Medicare Advantage, the importance of really, really high-performing physicians 

becomes absolutely critical. 

125 

Mr. BURGESS. And Dr. Edgerton, your practice would, you know, 

of all of the different types of practices that I worried about as we 

were doing this, your highly specialized, small office, I mean that 

was the one that I thought was going to have the most difficult 

time with any sort of adjustment along these lines, but you have 

done it. Is that right? 

Dr. EDGERTON. That is correct. And we are approaching now that 

pilot phase. One of the real benefits has been the interaction with 

PTAC. Interestingly enough, because they can’t reach out to us directly, it was largely looking at the PTAC Web site and the way 

that they are so transparent. In studying the feedback they had 

given to different models that were similar to what we were thinking about and being able to learn, it is sort of like a university of 

APMs if you spend enough time on their Web site and see the comments that come both from PTAC and from other stakeholders. 

So that has really been useful in moving us along, not only as 

a small office but also as a small specialty. 

Mr. BURGESS. Very good. And I do need to observe that we have 

a vote on and I do want to recognize Mr. Guthrie for his questions. 

Dr. Bucshon, we probably won’t have time to go to a second 

round if that is OK with you. 

Mr. GUTHRIE. Do you want me to yield to you? Do you have any 

more questions? 

Mr. BURGESS. No. I will yield to you and please go ahead with 

your questions. 

Mr. GUTHRIE. Hey, Larry, I will ask one quick one if you want 

to go into—OK. 

Dr. Varga, since joining an APM what have you been able to accomplish and what do you hope to accomplish in the future with 

regard to patient outcomes? 

Dr. VARGA. So I think the first thing we have been able to accomplish—and I can’t emphasize this enough to the committee—is, 

number one, we have for the first time I think in history had comprehensive data on the population of Medicare beneficiaries that 

we are managing, which opens up a world of opportunity. As folks 

who are physicians would tell you, if you give doctors useful, reliable, timely data, 99 times out of 100 they will make the right decisions off of that data. And so it starts with that. 

I think the second piece is we have been able to align incentives 

with our physicians, our hospital providers and our post-acute providers to really take a patient-centric, patient-oriented approach 

around quality and efficiency and be able to really drive that care 

model. I think we are excited about the savings we have generated. 

We are also very proud of the quality metrics we have generated 

within the program as well. 

And I think the last thing that I would say in that is it has really 

turned the culture. We think far more in an ACO-centric way than 

we do in a hospital-centric way now, because our lives live in the 

ACO and we coordinate care in the ACO. The hospital is one very 

small—— 

Mr. GUTHRIE. Thanks. I want to—now I have a couple of physician friends here that have practiced under this and they may have 

a different perspective. I want to make sure they have a chance to 

ask what they want to ask. 

126 

So Dr. Bucshon, I will yield. 

Mr. BUCSHON. Thank you, I appreciate that. 

I mean this is more on a personal level. I mean, I think for those 

of you who are in an APM, do you think participation in an APM 

has affected positively the quality of life of physicians in all of your 

practices and do you in the job satisfaction amongst physicians, because I think all of us know that there has been a decreasing job 

satisfaction amongst physicians in all specialties over maybe the 

last 20 or 30 years, and our ability to recruit quality people to go 

into all of our specialties maybe has become a little more difficult. 

So do you think participating in these APMs and the way we are 

redoing the system maybe will improve those circumstances? Anyone want to comment? 

Mr. GUTHRIE. I am noticing my time. We probably just have time 

for one answer and then we are going to have to go vote. 

So go ahead, Dr. Wulf. 

Dr. WULF. I would comment from a primary care standpoint, absolutely. That we are able to get to a payment model that rewards 

quality instead of volume, and this does that, makes all the difference. And I have been asked before what is the tipping point for 

this and it actually is not financial. The tipping point is physicians 

understanding that you can get them into a contract model that 

will pay for quality and pay for value. And so absolutely it is these 

type of payer contracting relationships have changed our physicians’ lives and made a very difficult clinical life much more palatable. 

Mr. GUTHRIE. Thanks. I wish I had more time for everyone else, 

but we are called to the floor. So I will yield back my time to the 

Chair. 

Mr. BURGESS. And the gentleman yields back. The Chair appreciates that. We have a series of votes on the floor that is going to 

consume some time, so I think we can conclude the hearing and 

dismiss you all and not have to reconvene after votes. But I do 

want to thank all of you for being here today. 

We have received outside feedback from a number of organizations and I would like to submit their statements for the record: 

The American Association of Nurse Anesthetists, the American Society of Anesthesiologists, the American Medical Association, the 

American Physical Therapy Association, Healthcare Leadership 

Council, American Society of Clinical Oncology, AHIP, the HSSR 

Coalition, American Hospital Association, American Association of 

Nurse Practitioners, the Society of Thoracic Surgeons, the American Academy of Orthopaedic Surgeons, and without objection, so 

ordered. Those will be made part of the record. 

Pursuant to committee rules, I remind Members they have 10 

business days to submit additional questions for the record. I ask 

witnesses to submit their response within 10 business days upon 

receipt of the questions. And without objection, thanks again. The 

subcommittee is adjourned. 

[Whereupon, at 1:09 p.m., the subcommittee is adjourned.] 

[Material submitted for inclusion in the record follows:] 

127 

PREPARED STATEMENT OF HON. GREG WALDEN

I thank Chairman Burgess for his continued leadership on MACRA, as well as 

Ranking Member Pallone, for the bipartisan slate of witnesses we have before us 

today. 

Today marks our third hearing since the passage of MACRA. Just as this committee led the effort to find a solution to SGR and other issues then, we continue 

our oversight over the bipartisan law and remain committed to its successful implementation. 

As my colleagues know well, we worked over many years to address the problems 

associated with the SGR and impending yearly payment cuts to doctors that inevitably were avoided thanks to short-term, temporary patches—17 in all. It seems like 

this was so long ago, but we must not lose perspective of what we have accomplished. Particularly now as we continue to move forward on the implementation of 

this important law. 

MACRA is up and running and today we will hear about the most forward looking 

aspect of the law—Alternative Payment Models (APMs). Today, they are already delivering better outcomes for Medicare beneficiaries and returning savings to the 

Medicare program. This is not a hypothetical—the transition to value is real, and 

very much underway and delivering results. 

MACRA has already proved to be a success. It has acted as an accelerant on doctors being able to enter into new team based arrangements, to think about their patient populations through payments that reward outcomes, and to take what they 

knew worked in the private sector and carry it over to the Medicare program. 

Most importantly, APMs finally reward providers for all the things they have always wanted to engage with patients on, but instead were forced to simply ‘‘do 

more’’ to be able to afford to stay in the Medicare program. MACRA delivered that 

change. 

Physicians in qualified APMs will receive a 5 percent bonus from 2019–2024. 

Technical support is provided for smaller practices to help them participate in 

APMs. We will hear from the Physician Technical Advisory Committee (PTAC), another successfully implemented element of MACRA, that is further helping physicians create models that are data driven with physicians in the driver’s seat. 

We are still in the early stages of moving away from traditional fee for service, 

but these efforts continue to be embraced by the physician community who are 

eager to assume the risk if it means being put back in the charge within an APM 

to best direct care for their patients and to be judged on outcomes. 

We expect to hear today from our witnesses who come from diverse backgrounds. 

They train and practice across the country, in rural and urban settings. Each are 

practicing physicians, in different arrangements and all have worked with their organizations to provide tools and best practices that other physicians can utilize and 

learn from to be better positioned to succeed under MACRA. 

This committee stands with the physician community in our united goal of a successfully implemented MACRA and we will continue to work with you in a bipartisan fashion to see that the law delivers on its promises. 

That said, I think we should all be very excited by the work already underway 

by our witnesses to make tangible differences to the care delivered to the country’s 

Medicare beneficiaries. I look forward to hearing more about their efforts and continuing to work toward a successful implementation of MACRA. 

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AMERICAN ACADEMY OF 

FAMILY PHYSICIANS 

STRONG MEDICINE FOR AMERICA 

AAFP Statement for the Record to the 

Energy and Commerce Committee, 

Health Subcommittee 

"MACRA and Alternative Payment Models: Developing Options for Value-based Care" 

November 9, 2017 

On behalf of the American Academy of Family Physicians (AAFP), representing 129,000 family 

physicians and medical students, thank you for the opportunity to submit this Statement for the Record 

for the U.S. House Energy and Commerce Committee Health Subcommittee regarding the 

implementation of the Medicare Access and Children's Health Insurance Program Reauthorization Act 

(MACRA) and the development of new alternative payment models (APMs) called for in MACRA. 

The AAFP supported MACRA's passage and the movement away from fee-for-service to value-based 

physician payment delivery and payment models. With implementation of MACRA, the development of 

new APMs, including physician-focused payment models, is accelerating. While some of these models 

may deliver comprehensive, longitudinal care, many run the risk of perpetuating (or even exacerbating) 

the fragmented care many patients receive under the current fee for service (FFS) system. It is our 

overall assessment that there needs to be a greater focus on the development of comprehensive, 

longitudinal APMs and the pace of development needs to increase significantly. 

Strengthening Primary Care 

Evaluating MACRA's effectiveness and the strength of APMs should first recognize the central role of 

primary care physician, and family medicine's role in the health care ecosystem. 

Family physicians are the largest primary care specialty and the most visited, especially for individuals 

in underserved areas. One of five US office visits are conducted with a family physician. This 

represents 123 million visits annually, 48 percent more than the next-highest medical specialty. 1 Family 

physicians also provide more care in rural and underserved areas than any other medical specialty? 

The complexity of care provided by family physicians is unparalleled in medicine. Family physicians 

address more diagnoses and offer more treatment plans per visit than any other medical specialty. 

Furthermore, the number and complexity of conditions, complaints, and diseases seen in visits with 

family physicians is far greater than those seen by any other physician specialty. 3 

There is an emerging consensus that strengthening primary care is imperative to improving individual 

and population health outcomes, as well as to restraining the growth of health care spending• 

Strengthening primary care is critical to driving better value for patients, payers, and communities. 

Health systems built with primary care as the foundation have positive impacts on quality, access, and 

costs. Transformation cannot be overly complex or burdensome to operationalize. In addition, it must 

be recognized that there is no one-size-frts-all solution, as patient panels, populations, and primary care 

practices vary. Finding the proper balance between flexibility and simplicity remains elusive. 

AAFP Headquarters 

11400 Tomahawk Creek Pkwy. 

Leawood, KS 66211·2680 

800.274.2237 • 913.906.6000 

fp@aafp.org 

AAFP Washington Office 

1133 Connecticut Avenue. NW. Ste. 1100 

Washington, DC 20036-1011 

202.232.9033 • Fax: 202.232.9044 

capitol@aafp org 
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CMS and private payers must make new investments in primary care to truly capture and realize the 

value proposition of family medicine and primary care. Though primary care oriented Advanced 

Alternative Payment Models (AAPMs) will continue to clinically coordinate with other payment models, 

primary care AAPMs must be kept distinct from bundled payment models to maximize support for the 

delivery of continuous, longitudinal, and comprehensive care across settings and providers. Including 

primary care in bundled payments will not provide the support our health system needs to increase 

value and strengthen primary care. 

The American Academy of Family Physicians (AAFP) is fully supportive of the Physician-Focused 

Payment Model Technical Advisory Committee's (PTAC) role in evaluating physician-focused 

payment models (PFPMs) and making subsequent recommendations about those models to the 

U.S. Department of Health and Human Services (HHS). The AAFP has developed an Advanced 

Primary Care Alternative Payment Model (APC-APM), which has been submitted to the PTAC to 

quicken the migration of family physicians away from the current inefficient FFS payment system. The 

APC-APM is a foundational model for delivering patient-centered, longitudinal, and coordinated care to 

Medicare beneficiaries - and establishes a payment structure that will begin to appropriately 

compensate family physicians for delivering this type of care. 

Principles for Evaluating APMs 

The AAFP also developed the following set of principles to guide the ongoing evaluation of proposed 

models to ensure that they are patient-centered. In our view, any APM implemented should meet these 

criteria: 

Longitudinal, Comprehensive Care. Primarily, APMs should support the delivery of team-based, 

comprehensive care, which includes all acute, chronic, and preventive services, not just episodic care. 

They should provide continuous, coordinated, and connected longitudinal care in the most costeffective setting. APMs should not fragment care across clinicians and settings for patients since 

fragmentation weakens clinician accountability for outcomes and/or costs, and negatively impacts 

patient experience and outcomes. Primary care APMs should be based on the core functions of the 

Patient-Centered Medical Home (PCMH) as articulated through the Joint Principles of the PatientCentered Medical Home and CPC+ Initiative, which focuses on care coordination, population health, 

care management, patient and caregiver engagement, and comprehensive and coordinated care. 

Improving Quality, Access, and Health Outcomes. Approved APMs must demonstrate how they will 

contribute to improvements in access to high quality of care and increase positive health outcomes for 

all patients. New models should use the core measure sets developed by the multi-stakeholder Core 

Quality Measure Collaborative to ensure alignment, harmonization, and the avoidance of competing 

quality measures among payers in an effort to reduce administrative burden. APM payments should be 

appropriately risk adjusted to ensure accurate assessment of provider performance and accountability. 

APMs Should Coordinate with Primarv Care Team. It is our strong belief that APMs should not 

fragment care across clinicians and settings for patients since fragmentation weakens clinician 

accountability for outcomes and/or costs, and negatively impacts patient experience and outcomes. 

Furthermore, we believe that a health care system built on and around longitudinal and comprehensive 

primary care can reduce the frequency and overall utilization of specialty care, for some patients. In the 

event that condition-focused APMs are approved, they should be required to contact and coordinate 

care with a patient's primary care physician and team (or primary care clinicians serving Medicare 

patients in a given geographic area). This will allow patients receiving care through a specialty- or 

disease-focused APM to also benefit from coordination with a primary care physician and team that will 

provide longitudinal care, in addition to treatment of a particular episode or condition. APMs should 

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include agreements with primary care physicians (reimbursed through separate, primary care APM) to 

enhance the working relationship between the specialty- or disease-focused physicians and the primary 

care physician and team. 

APMs Should Promote Evidence-based Care. APMs should incent or require use of evidence-based 

recommendations to treat acute and chronic conditions and to provide preventive services. New models 

of care should be physician-led, team-based, and primary care oriented to ensure they are patient 

centered. Patient centered ness requires an ongoing, active partnership with a personal primary care 

physician who leads a team of professionals dedicated to providing proactive, preventive, and chronic 

care management through all stages of life. This ensures that complex care management and care 

coordination issues are continually addressed. 

APMs Should be Multi-payer in Design. Approved APMs should be multi-payer in design to ensure that 

all patients-regardless of payer-have access to promising care models that can improve their health 

outcomes and care, and reduce costs. Payment models should be multi-payer in their design to allow 

the CMS and other health care payer programs to leverage investments and learning in payment and 

delivery system reform. Payments for primary care should be made mainly on a per patient basis 

through the combination of a global payment for direct patient care services and a global care 

management fee. APMs should attempt to avoid reliance on FFS payments. 

The 2018 Final Quality Payment Program (QPP) Regulation 

While physicians transition away from fee-to-for-service to APMs, it is important to examine how those 

systems are working. The following are the AAFP's observations for the Merit-based Incentive Payment 

System (MIPS). 

Low Volume Threshold - CMS is raising the low volume threshold in 2018 to exclude those who care for 

less than or equal to 200 Medicare Part B beneficiaries, or receive less than or equal to $90,000 in 

Medicare Part B payments. Raising the low volume threshold should exclude more small practices from 

MIPS. The AAFP advocates for an opt-in option so that anyone who wishes to participate might be able 

to do so. 

Virtual Groups- The AAFP is discouraged with the manner in which the virtual group policy has been 

developed and implemented. While we are somewhat pleased that Virtual Groups will begin in 2018, 

we are concerned that they will not benefit solo and small group practices in a manner consistent with 

legislative intent. We believe that the virtual group policy will be a key contributor to assisting solo and 

small group practices transition away from fee-for-service, yet remain independent. Overall, we believe 

there is rnuch work to be done to ensure that this policy achieves its original goals. 

Performance Period - Quality and cost will both be measured for an entire year in 2018. Increasing the 

quality reporting from "Pick Your Pace" to full year reporting is a bigger step than many are ready to 

take. Along with this, the data completeness criteria increased to 60%. We appreciate the 5 bonus 

points added to the final score for small practices. However, this was only finalized for one year. We 

would like to see this extended into future years of the program. 

MIPS APMs AAFP remains steadfastly opposed to the entire MIPS APM category. This entire 

category was created outside of the statutory requirements and introduces an unnecessary level of 

complexity to an already complex program. The AAFP strongly encourages consistency and equal 

reporting standards among all MIPS-eligible clinicians. Concurrently, we are concerned that eligible 

clinicians may intentionally remain in MIPS APMs, given the scoring advantage they have been given, 

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instead of progressing towards AAPMs, which is the intent of the QPP. We urge CMS to closely monitor 

participants who may be intentionally avoiding the progression to AAPMs. 

Level Playing Field - AAFP believes all specialists and subspecialists should be required to meet the 

same program expectations as other MIPS participants. In the same vein, AAFP is concerned that 

using dual-eligible status as an indicator of patient complexity may severely underestimate the number 

of truly complex patients, not to mention the fact that not all states have expanded Medicaid. Dual 

eligibility cannot be consistently applied and would not be an accurate indicator of patient complexity 

and thus creates an uneven playing field from state to state. 

Risk- The AAFP adamantly opposes putting APM entities and their eligible clinicians at financial risk 

for anything beyond their own performance. AAFP believes it is appropriate for primary care physicians 

in Medical Home Models to accept performance risk-not financial risk-based on the original MACRA 

statute, which reflects Congressional intent regarding the qualification of Medical Home Models as 

AAPMs. The AAFP strongly recommends that Congress require CMS to remove the Medical Home 

Model financial standard in its entirety and reiterates our strong belief that medical homes should not be 

subject to any financial risk. We object to the application of a nominal amount standard to Medical 

Home Models. Further, the AAFP does not understand CMS' logic in creating separate risk standards 

for AAPMs and Other Payer AAPMs. The risk standard should be the same for all AAPMs, except for 

Medical Home Models. 

Conclusion 

Thank you for the opportunity to comment on the implementation of MACRA. As policy makers evaluate 

MACRA's impacts, we urge you to remain focused on changes that will strengthen primary care and its 

role in bolstering system-wide reforms. 

For more information, please contact the AAFP's Government Relations Department at 202-232-9033. 

1 AAFP, Family Medicine Specialty, http://www.aato.org/abouttthe~aafo/famHy-medicine-specia!tv.html 2 AAFP, Rural Practice, http://www.aafu.org/abouVpolicies/a!l/rural-practice:Paoer.html 

3 Complexity of ambulatory care visits of patients with diabetes as reflected by diagnoses per visit 

Moore, Miranda et at Primary Care Diabetes, Volume 10, Issue 4, 281 -286 4 Macinko J, Starfield B, Shi L Quantifying the health benefits of primary care physician supply in the United States. fnt J Health Serv. 

2007:37(1):111-26. 

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Statement for the Record 

to the 

House Committee on Energy and Commerce 

Subcommittee on Health 

MACRA and Alternative Payment Models: 

Developing Options for Value-based Care 

Bruce A. Weiner, DNP, MSNA, CRNA 

President, American Association of Nurse Anesthetists 

8 November 2017 
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Introduction 

Chairman Burgess, Ranking Member Green, and Members of the Committee, thank you for the 

opportunity to offer this statement for the record. The American Association of Nurse 

Anesthetists (AANA) is the professional association for Certified Registered Nurse Anesthetists 

(CRNAs) and student registered nurse anesthetists, with membership that includes more than 

52,000 CRNAs and student nurse anesthetists representing over 90 percent of the nurse 

anesthetists in the United States. CRNAs are advanced practice registered nurses (APRNs) who 

personally administer more than 43 million anesthetics to patients each year in the United States. 

CRNAs provide acute, chronic, and interventional pain management services. In some states, 

CRNAs are the sole anesthesia providers in nearly I 00 percent of rural hospitals, affording these 

medical facilities obstetrical, surgical, trauma stabilization, and pain management capabilities. 

The House Energy and Commerce Subcommittee on Health's hearing, entitled "MACRA and 

Alternative Payment Models: Developing Options for Value-based Care" comes at an important 

time. As you know, the Centers for Medicare & Medicaid Services' (CMS) Innovation Center is 

currently seeking feedback on a new direction to promote patient-centered care and test marketdriven reforms that empower beneficiaries as consumers, provide price transparency, increase 

choices and competition to drive quality, reduce costs, and improve outcomes. Certainly, the 

Committee will be influential in providing guidance for this new direction. 

Ensure Equal Treatment of CRNAs and APRNs in Models 

The AANA urges the Committee to ensure that CRNAs and other APRNs are treated on par with 

physicians in models, including physician specialty models and advanced alternative payment 

models. These healthcare providers are core to improved access to high quality, cost-effective 

care. Furthermore, the National Academy of Medicine (NAM) recommends that government 

policy expand opportunities for nurses to lead collaborative healthcare improvement efforts, and 

prepare and enable nurses to lead changes that advance health. 1 Increasingly, the healthcare 

industry is recognizing APRNs for their leadership role in clinical, educational and academic, 

executive, board, legislative, and regulatory domains. In addition to their roles as expert 

healthcare professionals, APRNs are CEOs of hospitals and health systems, chief nursing 

officers, chairs of regulatory bodies and advisory committees, and have taken many other 

positions with wide spans of responsibility. 

In particular, the AANA expects that CRNAs should automatically be included in models when 

anesthesiologists are mentioned. As CMS develops the new direction of the Innovation Center, 

we urge the Committee to ensure that CRNAs will not face professional discrimination based 

solely on licensure in these efforts. 

Require the Strategic Use of Anesthesia Services 

1 NAM (National Academy of Medicine). The Future ofNursing: Leading Change, Advancing Health (Washington, 

DC:The National Academies Press, 2011), see Recommendation #2: Expand opportunities for nurses to lead and 

diffuse collaborative improvement efforts, p.ll and Recommendation #7: Prepare and enable nurses to lead change 

to advance health, p. 14. 
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Anesthesia professionals, such as CRNAs, can play an integral role in episodes of care that 

involve anesthesia as proper anesthesia services management can improve patient flow, advance 

patient safety, and ultimately yield cost savings.2 Conversely, research shows that suboptimal 

care in the preoperative, intraoperative, or postoperative phases of surgery may compromise 

care, resulting in poor patient outcomes3 that increase healthcare costs. The AANA urges the 

Committee to consider the role of anesthesia delivery that is safe and cost-efficient in itself and 

encourages the use of techniques such as Enhanced Recovery After Surgery (ERAS) programs,4 

which help reduce costs and improve patient outcomes. 5 

Furthermore, we recommend that the Committee promote cost-efficient anesthesia delivery 

models. All models of anesthesia delivery being equally safe according to extensive published 

research, the most cost-effective anesthesia care delivery model is the CRNA non-medically 

directed model, and we recommend that the Committee promote its use in this regard. 

In demonstrating the costs of various modes of anesthesia delivery, suppose that there are four 

identical cases: (a) has anesthesia delivered by a non-medically directed CRNA; (b) has 

anesthesia delivered by an anesthesia care team where a CRNA medically directed at a 4:1 ratio 

by a physician overseeing four simultaneous cases and attesting fulfillment of the seven 

conditions of medical direction in each; (c) has anesthesia delivered by an anesthesia care team 

where CRNA medically directed at a 2:1 ratio; and (d) has anesthesia delivered by a physician 

personally performing the anesthesia service. (There are instances where more than one 

anesthesia professional is warranted; however, neither patient acuity nor case complexity is a 

part of the regulatory determination for medically directed services. The literature demonstrates 

that the quality of medically directed vs. non-medically directed CRNA services is 

indistinguishable in terms of patient outcomes, quality and safety.) Further suppose that the 

annual pay of the anesthesia professionals approximate national market conditions, $170,000 for 

the CRNA6 and $540,314 for the anesthesiologise. Under the Medicare program, practice 

modalities (a), (b), (c) and (d) are reimbursed the same. Moreover, the literature indicates the 

quality of medically directed vs. non-medically directed CRNA services is indistinguishable. 

2 See for example Rice AN, Muckier VC, Miller WR, Vacchiano CA. Fast-tracking ambulatory surgery patients 

following anesthesia. J Perianesth Nurs. Apr 2015;30(2):124-133 and Kimbrough CW et al. Improved Operating 

Room Efficiency via Constraint Management: Experience of a Tertiary-Care Academic Medical Center. Journal of 

the American College of Surgeons 2015; 221: 154-I62. 3 Miller TE, Roche AM, Mythen M. Fluid Management and Goal-Directed Therapy as an Adjunct to Enhanced 

Recovery After Surgery (ERAS). Canadian Journal of Anesthesia 2015; 62 (2)" 158-168. 4 American Association of Nurse Anesthetists, "Enhanced Recovery After Surgery: Considerations for Pathway 

Development and Implementation," July 2017, available at: 

http://www.aana.com/myaana!Advocacy/fedgovtaffairs/Documents/20160902-aana-comment-on-opioid-analgesicprescriber-education-rfi-final.pdf. 

See for example Boulind CE, Yeo M, Burkill C, et at. Factors predicting deviation from an enhanced recovery 

programme and delayed discharge after laparoscopic colorectal surgery Colo rectal Dis. 2011; 14: I 03-11 0; Miller TE, 

Thacker JK, White WD, et at. Reduced length of hospital stay in colorectal surgery after implementation of an 

enhanced recovery protocol. Anesth Analg. May 2014;118(5):1052-1061; and Enhanced recovery care pathway. A 

better journey for patients seven days a week and better deal for the NHS. National Health Service20 12-2013. 

http://www.nhsiq.nhs.uk/resourcesearch/publications/enhanced-recovery-care-pathwayreview.aspx. Accessed 

February 25,2015. 6 AANA member survey, 2014 7 MGMA Physician Compensation and Production Survey, 2014. www.mgma.com 
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However, the annualized labor costs (excluding benefits) for each modality vary widely. The 

annualized cost of practice modality (a) equals $170,000 per year. For case (b), it is ($170,000 + 

(0.25 x $540,314) or $305,079 per year. For case (c) it is ($170,000 + (0.50 x $540,314) or 

$440,157 per year. Finally, for case (d), the annualized cost equals $540,314 per year. 

Anesthesia Payment Model FTEs /Case Clinician costs per year I FTE 

(a) CRNA Non-medically Directed 1.00 $170,000 

(b) Medical Direction 1:4 1.25 $305,079 

c Medical Direction 1 :2 1.50 $440,157 

d Anesthesiologist Only 1.00 $540,314 

Anesthesiologist mean annual pay $540,314 MGMA, 2014 

CRNA mean annualvav $170,000 AANA, 2014 

Under the more costly anesthesia models, hospitals and other facilities- not to mention patients 

and employers paying for commercial health plan coverage- are bearing the additional costs. 

Therefore, we recommend that the Committee should consider direction incentives for high 

value care that include the use of cost-effective anesthesia care. 

Promote Full Scope of Practice and Remove Barriers to Care 

The AANA believes the Committee should spur models that support and encourage APRNs, 

including CRNAs, to practice to their full professional education, skills, and scope of practice. 

Our policy recommendation corresponds with a recommendation from the NAM's report titled 

The Future of Nursing: Leading Change, Advancing Health, which outlines several paths by 

which patient access to care may be expanded, quality preserved or improved, and costs 

controlled through greater use of APRNs, including CRNAs. 8 The NAM report specifically 

recommends that, "advanced practice registered nurses should be able to practice to the full 

extent of their education and training."9 Moreover, the NAM states with regard to one type of 

APM, the accountable care organizations (A COs), that "A COs that use APRNs and other nurses 

to the full extent of their education and training in such roles as health coaching, chronic disease 

management, transitional care, prevention activities, and quality improvement will most likely 

benefit from providing high-value and more accessible care that patients will find to be in their 

best interest." 10 

We also recommend that the Committee encourafe payment models that do not impose 

unnecessary physician supervision requirements. 1 Waiving unnecessary supervision 

requirements is consistent with Medicare policy reimbursing CRNA services in alignment with 

their state scope of practice, 12 and with the NAM's recommendation, "Advanced practice 

registered nurses should be able to practice to the full extent of their education and training." 13 

8 !OM op. cit. p. 69. 9 !OM op. cit. p. 7-8. 10 !OM op. cit. p. 3-41. 11 See 42 CFR §§ 482.52,482.639, 416.42. 12 42 CFR §410.69(b}, 77 Fed. Reg. 68892, November 16, 2012. 13 Institute of Medicine (!OM}. The future of nursing: leading change, advancing health. Washington, DC: The 

National Academies Press, p. 3-13 (pdfp. 108} 2011. 
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There is no evidence that physician supervision of CRNAs improves patient safety or quality of 

care. In fact, there is strong and compelling data showing that physician supervision does not 

have any impact on quality, and may restrict access and increase cost. Studies have repeatedly 

demonstrated the high quality of nurse anesthesia care, and a 2010 study published in Health 

Affairs14 led researchers to recommend that costly and duplicative supervision requirements for 

CRNAs be eliminated. Examining Medicare records from 1999-2005, the study compared 

anesthesia outcomes in 14 states that opted-out of the Medicare physician supervision 

requirement for CRNAs with those that did not opt out. (To date, 17 states have opted-out.) The 

researchers found that anesthesia has continued to become safer in opt-out and non-opt-out states 

alike. In reviewing the study, the New York Times stated, "In the long run, there could also be 

savings to the health care system if nurses delivered more of the care. " 15 Most recently, a study 

published in Medical Care June 2016 found no measurable impact in anesthesia complications 

from nurse anesthetist scope of practice or practice restrictions. 16 

CRNA safety in anesthesia is further evidenced by the significant decrease in liability premiums 

witnessed in recent decades. In 2015, self-employed CRNAs paid 33 percent less for 

malpractice premiums nationwide when compared to the average cost in 1988. When adjusted 

for inflation through 2015, the reduction in CRNA liability premiums is an astounding 65 

percent less than approximately 25 years ago according to Anesthesia Insurance Services, Inc. 

According to a May/June 2010 study published in the journal of Nursing Economic$, CRNAs 

acting as the sole anesthesia provider are the 'most cost-effective model for anesthesia delivery 

without any measurable difference in the quality of care between CRNAs and other anesthesia 

providers or by anesthesia delivery model. 17 

The evidence also demonstrates that the supervision requirement is costly. Though Medicare 

requires supervision of CRNAs (except in opt-out states) by an operating practitioner or by an 

anesthesiologist who is immediately available if needed, hospitals and health care facilities often 

misinterpret this requirement to be a quality standard rather than a condition of participation. 

The AANA receives reports from the field that anesthesiologists suggest erroneously that 

supervision is some type of quality standard, an assertion bearing potential financial benefit for 

anesthesiologists marketing their medical direction services as a way to comply with the 

supervision condition of participation. When this ideology is established, anesthesiologist 

supervision adds substantial costs to healthcare by requiring duplication of services where none 

is necessary. Further, the Medicare agency has clearly stated that medical direction is a 

condition for payment of anesthesiologist services and not a quality standard. 18 But there are 

even bigger costs involved if the hospital administrator believes that CRNAs are required to have 

anesthesiologist supervision. 

According to a nationwide survey of anesthesiology group subsidies, 19 hospitals pay an average 

of $160,096 per anesthetizing location to anesthesiology groups, an increase of 13 percent since 

14 Dulisse, op. cit. 15 Who should provide anesthesia care? (Editorial) New York Times, Sept. 6, 2010. 16 Negrusa B et al. op. cit. 17 Paul F. Hogan et. al, "Cost Effectiveness Analysis of Anesthesia Providers." Nursing Economic$. 20 I 0; 28:159-

169. 

18 63 FR 58813, November 2, 1998. 19 Healthcare Performance Strategies. Anesthesia Subsidy Survey 2012. 
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the previous survey in 2008. An astounding 98.8 percent of responding hospitals in this national 

survey reported that they paid an anesthesiology group subsidy. Translated into concrete terms, 

a hospital with 20 operating rooms pays an average of $3.2 million in anesthesiology subsidies. 

Anesthesiology groups receive this payment from hospitals in addition to their direct 

professional billing. 

As independently licensed professionals, CRNAs are responsible and accountable for judgments 

made and actions taken in his or her professional practice.20 The scope of practice of the CRNA 

addresses the responsibilities associated with anesthesia practice and pain management that are 

performed by the nurse anesthetist as a member of inter-professional teams. The same principles 

are used to determine liability for surgeons for negligence of anesthesiologists or nurse 

anesthetists. The laws' tradition of basing surgeon liability on control predates the discovery of 

anesthesia and continues today regardless of whether the surgeon is working with an 

anesthesiologist or a nurse anesthetist. 21 

There is strong evidence in the literature that anesthesiologist supervision fails to comply with 

federal requirements, either the Part A conditions of participation or Part B conditions for 

coverage. Lapses in anesthesiologist supervision are common even when an anesthesiologist is 

medically directing as few as two CRNAs, according to a 2012 study published in the journal 

Anesthesiology,22 the professional journal of the American Society of Anesthesiologists. The 

authors reviewed over 15,000 anesthesia records in one leading U.S. hospital, and found 

supervision lapses in 50 percent of the cases involving anesthesiologist supervision of two 

concurrent CRNA cases, and in more than 90 percent of cases involving anesthesiologist 

supervision of three concurrent CRNA cases. This is consistent with over ten years of AANA 

membership survey data. Moreover, the American Society of Anesthesiologists ASA Relative 

Value Guide 2013 newly suggests loosening further the requirements that anesthesiologists must 

meet to be "immediately available," stating that it is "impossible to define a specific time or 

distance for physical proximity." This newer ASA Relative Value Guide definition marginalizes 

any relationship that the "supervisor" has with the patient and is inconsistent with the Medicare 

CoPs and CfCs, and with the Medicare interpretive guidelines for those conditions, which 

require anesthesiologists claiming to fulfill the role of "supervising" CRNA services be 

physically present in the operating room or suite. 

If a regulatory requirement is meaningless in practice, contributes to greater health care costs, and 

is contrary to existing evidence regarding patient safety and access to care, we recommend that 

the Committee discourages the development of models that impose unnecessary supervision 

requirements. 

Promote Access to Care in Rural Areas 

20 American Association of Nurse Anesthetists. Code of Ethics for the Certified Registered Nurse Anesthetist. 

Adopted 1986, Revised 2005. 21 Blumenreich, G. Another article on the surgeon's liability for anesthesia negligence. AANA Journal. April 2007. 22 Epstein R, Dexter F. Influence of Supervision Ratios by Anesthesiologists on First-case Starts and Critical 

Portions of Anesthetics. Anesth. 2012;116(3): 683-691. 
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As CRNAs provide anesthesia for a wide variety of surgical cases and in some states are the sole 

anesthesia providers in nearly 1 00 percent of rural hospitals, affording these medical facilities 

obstetrical, surgical, trauma stabilization, and pain management capabilities, it vital that the 

Committee promote access to the use ofCRNA anesthesia services in rural America. 

Furthermore, the Committee should ensure models do not create unintended barriers to the use of 

CRNA services and that CRNA are practicing at their full professional education, skills, and 

scope of practice. CRNAs play an essential role in assuring that rural America has access to 

critical anesthesia services, often serving as the sole anesthesia provider in rural hospitals, 

affording these facilities the capability to provide many necessary procedures. The importance of 

CRNA services in rural areas was highlighted in a recent study which examined the relationship 

between socioeconomic factors related to geography and insurance type and the distribution of 

anesthesia provider typeP The study correlated CRNAs with lower-income populations and 

correlated anesthesiologist services with higher-income populations. Of particular importance to 

the implementation of public benefit programs in the U.S., the study also showed that compared 

with anesthesiologists, CRNAs are more likely to work in areas with lower median incomes and 

larger populations of citizens who are unemployed, uninsured, and/or Medicaid beneficiaries. 24 

Promote Multi-modal Pain Management in an Effort to Reduce the Need for and Reliance 

on Opioids 

The AANA recommends that the Committee promote multi-modal pain management in models 

as a way to help curb the opioid epidemic. Likewise, the Committee should ensure that models 

do not limit the use of medically necessary CRNA pain management services. The AANA is 

concerned in the increase in opioid drug use, abuse and deaths and is committed to 

collaboratively working toward a common solution to help curb the opioid epidemic in the US. 

As a main provider of pain management services and as APRNs, CRNAs are uniquely skilled to 

provide both acute and chronic pain management in a patient centered, compassionate and 

holistic manner in all clinical settings (e.g., hospitals, ambulatory surgical centers, offices, and 

pain management clinics).25 Furthermore, the holistic approach that CRNA pain management 

practitioners employ when treating their chronic pain patients may reduce the reliance on opioids 

as a primary pain management modality, thus aiding in the reduction of potential adverse drug 

events related to opioids. According to a recent AANA position statement, A Holistic Approach 

to Pain Management: Integrated, Multimodal, and Interdisciplinary Treatment, "CRNAs 

integrate multimodal pain management as an element of enhanced recovery after surgery 

(ERAS) protocols to manage pain. Management begins pre-procedure and continues after 

discharge by using opioid sparing techniques such as regional anesthesia, peripheral nerve 

blocks, non-pharmacological approaches, and non-opioid based pharmacologic measures. 

Careful assessment and treatment of acute pain, which may include appropriate opioid 

23 Liao CJ, Quraishi JA, Jordan, LM. Geographical Imbalance of Anesthesia Providers and its Impact on the 

Unisured and Vulnerable Populations. Nurs Econ. 20 15;33(5):263-270. 

http://www.aana.com/resources2/research/Pages/NursingEconomics20 l5.aspx 24 Liao, op cit. 25 AANA Chronic Pain Management Guidelines, September 2014, available at: 

http://www.aana.com/resources2/professionalpractice/Pages/Chronic-Pain-Management-Guidelines.aspx. 
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prescribing, can decrease the risk of acute pain transitioning to chronic pain or the development 

of opioid dependency and abuse."26 

In developing the plan of care for the patient, CRNAs obtain patient history, evaluate the patient, 

order and review necessary diagnostic testing, and assess the patient's psychological and 

emotional state. Non-pharmacologic pain mitigation techniques are often employed in the 

treatment of chronic pain and considered as part of the care plan. These techniques may include 

patient education regarding behavioral changes that can decrease pain, such as weight loss, 

smoking cessation, daily exercise, stretching, and physical or chiropractic therapy. Such 

therapies may not be sufficient when used alone, but they have significant benefit when they are 

used in a complementary manner with other therapies. 

The Committee should ensure that models do not limit the use of these medically necessary 

CRNA pain management services. Leading physician subspecialty organizations in pain 

management research, practice guideline development, and education are known to use 

economic and advocacy means to exclude other members of the pain management team, such as 

CRNAs, from educational and practice opportunities, thereby limiting patient access to care, 

diagnosis, treatment, and ultimately improved patient quality of life. 

Conclusion 

A report issued in April 2015 by the Federal Trade Commission (FTC), "Competition and the 

Regulation of Advanced Practice Registered Nurses," underscores the point that for CRNAs and 

other APRNs, "even well intentioned laws and regulations may impose unnecessary, unintended, 

or overbroad restrictions on competition, thereby depriving health care consumers of the benefits 

of vigorous competition."27 The AANA hopes the Committee will be cognizant of these barriers 

and require that models do not impose barriers that limit a CRNA's ability to provide 

comprehensive care. 

CRNAs are proven to be safe, high-quality and cost-effective healthcare providers. As the 

Committee examines MACRA and other APMs for ways to develop value-based care, the 

ANNA encourages the Committee to recognize that CRNAs are vital to resolving the challenges 

facing the nation's healthcare system. 

26 See AANA Position Statement, "A Holistic Approach to Pain Management: Integrated, Multimodal, and 

Interdisciplinary Treatment, July 2016, available at: www.aana.com/HolisticPainMgmt. 27 Federal Trade Commission. Policy Perspectives: Competition and the Regulation of Advanced Practice Nurses, 

March 2014, p. I. 
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American Society ot 

Anesthesiologists® 

1501 M Street. NW., Suite 300 • Washington, D.C. 20005 • (202) 289-2222 • F: (202) 371-0384 • asahq.org 

November 8, 2017 

The Honorable Greg Walden, Chairman 

The Honorable Frank Pallone, Ranking Member 

House Committee on Energy and Commerce 

2125 Rayburn House Office Building 

Washington D.C. 20515 

Dear Chairman Walden and Ranking Member Pallone, 

On behalf of the more than 52,000 members of the American Society of Anesthesiologists (ASA), I am 

writing to thank the House Energy and Commerce Committee for scheduling the November 8, 2017 

hearing, "MACRA and Alternative Payment Models: Developing Options for Value-based Care." 

ASA has invested heavily in initiatives aimed at improving the safety, quality and efficiency of care for 

the surgical patient We have developed a clinical registry, operated by the Anesthesia Quality Institute 

(AQI), that contains detailed files on millions of anesthetic administrations by thousands of physician 

anesthesiologists in hundreds of care settings. These data have led to dozens of published reviews to 

inform the safe practice of anesthesia. 

We have sponsored the Perioperative Surgical Home (PSH) Collaboratives in almost 60 large and small 

health care institutions. PSH is a patient-centered delivery system that aligns with the National Quality 

Strategy (NQS) to achieve the triple aim of improving health, improving the delivery of healthcare and 

reducing costs. These goals are met through shared decision-making and seamless continuity of care for 

the surgical patient, from the moment surgery Is made, all the way through recovery, discharge and 

beyond. In these collaboratives, care redesign exercises have improved outcomes and reduced cost. We 

are about to launch an expanded series of demonstrations for physician anesthesiologists to further 

develop the key concepts of care coordination for the surgical patient and maximize the benefits to be 

derived from these opportunities. Physician anesthesiologists represent the common pathway for nearly 

all surgical and procedural care patients and can contribute to improved quality and more cost-effective 

care. 

In these efforts and others, ASA has embraced the underlying goals of MACRA. 

The Role of the Physician Anesthesiologists and Alternative Payment Models 

Our submitted comments today address the role of the physician anesthesiologist as part of the larger 

community of clinicians, patients, and other stakeholder in the transition of the Medicare system from 

volume-based to a value-based system through the development of alternative payment models. We 

believe physician anesthesiologists can play a vital and critical role in this transition. Our comments 

address three issues: 
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• Pathways for the Perioperative Surgical Home in the Development and Implementation of 

APMs 

Role of the Physician Anesthesiologist in Addressing Substance Abuse in an APM Environment 

Recognizing and Integrating Specialists within the APM Environment 

Pathways for the Perioperative Surgical Home IPSHl in the Development and Implementation of APMs 

As part of our shared vision with CMS of shifting healthcare delivery from volume to value, and as 

mentioned in the introduction to this letter, ASA has been organizing and partnering with other medical 

specialties to implement the PSH care delivery model in healthcare organizations across this country. 

The PSH is a patient-centered, physician-led, interdisciplinary and team-based system of coordinated 

patient care, which spans the entire experience from decision of the need for any invasive proceduresurgical, diagnostic, or therapeutic-to discharge from the acute-care facility and beyond. The PSH 

strives to achieve the triple aim of better patient experience, better healthcare, and reduced 

expenditures for all patients undergoing surgery and invasive procedures. 

ASA has been assessing the PSH's core strengths within this new Advanced APM landscape. Since the 

PSH is a multi-disciplinary approach to patient care, it has several unique qualities that position it well to 

have a varied and robust impact on physicians who will be reporting under both the MIPs and the 

Advanced APM pathways. Several of these strengths are listed below: 

Team-based and physician-focused: Physicians across the care spectrum can participate. 

• Proven track record of cost and care: Data collected from organizations participating in the PSH 

Collaborative have shown consistent improvement in both patient care and cost reduction. 

Flexibility with current payment initiatives: The PSH payor-agnostic framework aligns well with 

several of the existing and emerging value-based payment models under CMS and private payor 

payment initiatives. 

Flexibility for practitioners: As an integrated care delivery model, the breadth and depth of 

clinical settings and patient subgroups can be considered through a tailored approach to care. 

PSH was developed initially as a care model, but ASA believes that it can fit under and help enhance 

existing payment models or promote new payment models. We request that Congress encourage CMS 

to consider three pathways for the integration of PSH within their efforts towards value-based care and 

the development of Advanced APMs. 

Care Model 

PSH integrated into any system or model 

Provides a systematic approach that embeds measurable quality metrics and enhances patient 

care. 

Plug & Play 

PSH embedded into an existing Advanced APM 

• Provides a care pathway for existing MIPS APMs and Advanced APMs. 

Allows greater participation in Advanced APMs by specialists that currently do not participate. 

• Recognizes the impact of acute care episodes on population health improvement. 
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Independent APM 

Integrate the PSH care model with a financial risk model 

• This model will be designed to meet all three of the criteria for an Advanced APM (financial risk, 

quality and HIT). 

Expands opportunities for APMs that are physician-led and covers various sites of service 

including inpatient, outpatient and ambulatory surgical centers. 

Role of the Physician Anesthesiologist in Addressing Substance Abuse in an APM Environment 

Numerous recent reports have found that current opioid epidemic is the deadliest drug crisis in 

American history. Last month President Trump declared the opioid crisis a public health emergency. 

Combating this epidemic will require a multi-pronged strategy- a critical element of this fight will be the 

design of a system that promotes the appropriate prescribing of opioids to patients by addressing 

inappropriate financial incentives for providers and implementing evidence-based practice standards 

that reduce opioid use and deter the inappropriate prescriptions of opioids. The significant extent of this 

crisis compels us to enact such strategies as part of the implementation for all payment models where 

opioid prescriptions are relevant. 

Anesthesiologists, as general anesthesiologists and as pain specialists, along with many other physician 

specialties have been working diligently to address issues of over-prescribing of opioids. ASA has been 

leading efforts to support their physician members and the patients they service in this area. We ask 

Congress to urge CMS to consider the strategies described below in payment model development, 

taking into account the important role of anesthesiologists. 

• Taking a unique approach to tackling this epidemic, ASA is partnering with Premier Inc., and its 

network of hospitals, on a national opioid safety pilot to reduce patient harm from opioid 

misuse, dependence and addiction. The six-month pilot, which began in September, is geared at 

addressing opioid misuse and abuse, through implementation of evidence-based practices and 

education provided by ASA physician members, aimed at improving pain management and 

reducing opioid prescriptions after surgery. We believe this is one way to reduce the number of 

medications in America's households and prevent them from getting into the wrong hands, a 

large contributing factor to this epidemic. 

• ASA released a statement for long-term opioid use in chronic, non-cancer pain conditions which 

provides a guide to management of opioid use for chronic non-cancer pain. This document 

provides a comprehensive set of considerations including patient evaluation, communication, 

use of quality metrics, consideration of multimodal treatment options, assessment of risk of 

dependence and addiction among other considerations. The statement can be found here: 

https:f/www.asahg.org/resources/resources-from-asa-committees/considerations-for-longterm-opioid-use 

ASA collaborated with the CDC on the Guideline for Prescribing Opioids for Chronic Pain, which 

provides recommendations for primary care providers on opioid prescribing, including when to 

initiate or continue opioids for chronic pain; follow-up and discontinuation; and addresses risk 

and harm of opioid use. Because of ASA's involvement, the CDC modified the guideline's 

recommendation on acute pain. 
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ASA has collaborated with other pain societies, through the Pain Care Coalition (PCC)-

comprised of the American Academy of Pain Medicine, American Pain Society, and ASA. The 

coalition works together to support policies to further responsible pain care. Most recently, the 

PCC submitted comments to the White House Opioid Commission, in response to the 

commission's interim report. 

Taken together ASA believes that the integration of these strategies; some that are led by 

anesthesiologists and others that are examples of anesthesiologists working with primary care 

physicians, surgeons or other providers; into payment models can be an effective means to address the 

opioid epidemic, enhance the quality of care provided to patients and as a result also produce overall 

cost savings to the system. 

Recognizing and Integrating Specialists within the APM Environment 

ASA, along with other procedure-focused medical specialties, remains concerned with the lack of 

alternative payment models which are applicable to the services we provide. 

As the Quality Payment Program (QPP) approaches its second year of implementation, the need for 

expanding opportunities for procedure-based specialists to fully participate becomes even more 

critically important to ensure that the Program offers opportunities for payment reform to a wide range 

of physicians participating in the Medicare program. To address this comprehensively, ASA believes this 

issue must be addressed on two levels. 

Firstly, greater efforts must be made to recognize the contributions that anesthesiologists can make to 

the success of broad-based population health oriented APMs. Actively managing and coordinating the 

care of patients undergoing surgical procedures is often overlooked, yet can yield substantial 

improvements in cost and quality, contributing to the success of population health management 

programs. Key to the success of the PSH model is the active management of patients at the time of 

transitions in care-pre-procedure to procedure and procedure to post-procedure-and in care 

setting-e.g., institution to home. Use of measures that capture these contributions and integration of 

care models such as PSH can help CMS and other payors better understand the impact of 

anesthesiologists and other specialists on the cost and quality of healthcare provided to Medicare 

beneficiaries. 

On a parallel track we believe greater efforts and resources must be committed to the development of 

APMs that more directly capture the contributions of a wide range of specialists. Similar to the situation 

for many other specialties, currently there are few, if any, opportunities for physician anesthesiologists 

to participate in Advanced APMs. Nor do we see a significant change to this situation in the near future. 

The scarcity of Advanced APM opportunities means it is highly unlikely that any of our members, or 

many specialists in general, will be eligible to participate in models that may have the greatest impact on 

advancing the triple aim. 

We urge Congress to encourage CMS to develop models that capture the contributions of specialists 

across the spectrum of care. We are eager to work with the Agency and other stakeholders to turn these 

desirable goals into a reality. We remain committed to identifying and nurturing payment solutions to 

ensure a diversity of provider types have options under the Advanced APM track of the QPP. We look 

forward to working alongside CMS to achieve this aim. 
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We appreciate the House Energy and Commerce Committee's consideration of how Alternative 

Payment Models can advance payment reforms to Medicare, and this opportunity to share how the 

ASA's Perioperative Surgical Home delivers value, patient satisfaction and reduced costs. Please contact 

Manuel Bonilla, Chief Advocacy Officer, at: m.bonilla@asahg.org or 202-289-2222 should you have any 

questions. 

Sincerely, 

James D. Grant, M.D., M.B.A., FASA 

President 

American Society of Anesthesiologists 
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STATEMENT 

of the 

American Medical Association 

for the Record 

U.S. House of Representatives Committee on Energy and 

Commerce 

Subcommittee on Health 

RE: MACRA and Alternative Payment Models: 

Developing Options for Value-Based Care 

November 8, 2017 

Division of Legislative Counsel 

(202) 789-7426 
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2 

Statement 

For the Record 

of the 

American Medical Association 

to the 

U.S. House of Representatives Committee on Energy and Commerce 

Subcommittee on Health 

Re: MACRA and Alternative Payment Models: 

Developing Options for Value-Based Care 

November 8, 2017 

The American Medical Association (AMA) appreciates the opportunity to present our views to the 

U.S. House of Representatives Committee on Energy and Commerce concerning the Medicare 

Access and CHIP Reauthorization Act (MACRA) and Alternative Payment Models (APMs). The 

AMA believes APMs can provide significant opportunities for physicians to improve the quality and 

outcomes of their patients care in ways that also lower growth in health care spending. That is why 

we have hosted workshops, convened meetings, and produced educational materials to support 

efforts by physicians in all specialties to develop APMs that will eliminate barriers to better care 

delivery in their practices and communities. 

This year, the AMA convened two workshops on physician-focused APMs attended by hundreds of 

highly engaged physician leaders and medical society staff. We heard many good ideas from 

workshop participants who are on the cutting edge of APM design, and we want to use these 

concepts to help develop a more robust APM pathway under MACRA and increase physician 

participation in APMs. 

For example, we heard from an osteopathic physician who has been participating in the 

Comprehensive Primary Care model in Oklahoma. The extra support available through this model 

allowed his practice to develop a team-based approach to care, focus on care improvements like 

preventing falls, provide same-day appointments for more severely ill patients, and implement 

patient registries that helpe:l improve ma1agement of the prcdioe' s patients with chronic conditions 

like diabetes. 

We also heard from a cardiologist participating in the Bundled Payments for Care Initiative in 

Illinois. The model has allowed his team to significantly reduce skilled nursing facility lengths of 

stay and hospital readmissions for heart failure patients. 

Today, however, most physicians still do not have the option of participating in APMs under 

MACRA. Last yea-'s final rule indicated that about five percent of clinicians would be qualified 

APM participants in 2017, and the forecast for 2018 is similar. 

Submissions to the Physician-focused Payment Model Technical Advisory Committee (PTA C) 

signal that many specialty societies are developing physician-focused APMs. A number of these 

APMs focus on better managing chronic diseases and preventing exacerbations, improving the speed 
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3 

and accuracy of diagnoses for symptoms or conditions, improving the process of selecting treatment 

plans, and engaging patients in helping to better manage their conditions at home. These 

improvements in care delivery can lead to fewer emergency visits and hospital admissions and better 

outcomes for patients. Several physician-focused APMs have been implemented on a small scale 

with support from private payers or with grants from the Centers for Medicare & Medicaid Services 

(CMS), while others are still being designed and have not yet been tested. 

Examples of Physician-Focused APMs 

COME HOME: In New Mexico, oncologist and AMA President-elect Dr. Barbara McAneny 

designed a specialty medical home for patients with cancer which she called the COME HOME 

model. With grant funding from a CMS program, the model significantly reduced the complication 

rates for patients receiving chemotherapy, such as dehydration, which in turn reduced their 

emergency visits and hospital admissions. The model also helped reduce duplicative diagnostic 

testing and improve symptom management. Now Dr. McAneny' s prcctice is participating in the 

Medicare Oncology Care Model, and she is also working with a private payer in New Mexico to 

implement an APM developed by the American Society of Clinical Oncology that builds upon the 

experience and lessons learned from the COME HOME model. 

SonarMD: An Illinois gastroenterologist, Dr. Lawrence Kosinski, developed a specialty medical 

home model for patients with Crohn'sdiseaseand ulcerative colitis with support from Illinois Blue 

Cross Blue Shield. He called it Sonar because his patients were like underwater submarines and he 

needed a way to find out if his patients were having a problem before they surfaced in a hospital. 

The model grew out of data that the payer provided to him showing that, of the more than 50 percent 

of Crohn' s disease patients hospitalized with complications of their disease, less than one third had 

seen any physician within the 30 days preceding their hospital admission. Interviews with the 

patients revealed that the symptoms of their disease had come to seem normal to them over time, so 

they had no way of knowing that a change needed to be made in their treatment plan to avoid a 

developing emergency. Under the Sonar model, participating gastroenterologists receive funding 

support for proactive outreach to patients by nurse care managers. Ea::h pctient ra::eives a "ping" via 

text message, email or phone each month with a few structured questions. The nurses are able to use 

the patients' responses to these questions, called Sonar scores, to alert the gastroenterologists if they 

need to see the patient or adjust their medication regimen. The Sonar model has cut the rate of 

hospitalizations in half, and was the first APM recommended by the PT AC to the Secretary of 

Health and Human Services. Recently, the AMA participated in a meeting of Dr. Kosinski and CMS 

to discuss how to potentially implement this model for Medicare patients with an array of chronic 

conditions that would benefit from this type of intensive physician-nurse-patient engagement. 

Bridges to Care: A team led by Dr. Jennifer Wiler, an emergency physician in Colorado, used grant 

funds to test a physician-focused APM focused on patients who utilize the emergency department 

multiple times per year and are insured by Medicaid. Their CMS award supported up to eight home 

visits within 60 days of an emergency department visit or hospital discharge by a team that provided 

intensive medical, behavioral health, and social care coordination services. As described in a paper 

published last month in Health Affairs, the model was able to substantially reduce the number of 

emergency visits by people who had been coming to the emergency department more than three 

times a year, and more than double their number of visits to primary care physicians. 

Value-Based Total Joint Arthroplasty (TJA): With support from Horizon Blue Cross and Blue 

Shield of New Jersey, Dr. Stephen Zabinski led the design and implementation of a TJA APM that 

supports the provision of intensive pre-operative care focused on risks that the patient can modifY 

before surgery, such as their weight, anemia, diabetes control, and smoking. This improvement in 
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4 

the patients' preopa-ativefunctioning makes them less likely to experience postoperative 

complications and allows their rehabilitation to proceed more quickly and at lower cost. Within a 

few years, the APM achieved very significant reductions in length of stay and inpatient complication 

rates, more than doubled the percentage of patients discharged to their home instead of a 

rehabilitation or skilled nursing facility, lowered costs and achieved high rates of patient satisfaction 

with their care. 

Patient-Centered Opioid Addiction Treatment: As a component of our efforts to help bring an end to 

the epidemic of opioid overdose deaths, the AMA has been working closely with the American 

Society of Addiction Medicine to develop a physician-focused APM for managing the treatment of 

opioid use disorder. As the Members of this Committee know, the opioid epidemic is widespread, 

growing rapidly, and has overtaken many other leading causes of death. The treatment model for 

opioid use disorder requires interventions that address its medical, psychological and social 

components, including medication-assisted treatment. The model aims to broaden coordinated 

delivery of the full spectrum of services needed for treatment, improve transitions to outpatient care 

for patients discharged from more intensive levels of care, and reduce the number of avoidable 

emergency department visits and hospitalizations. Payments under the model would support an 

evaluation, diagnosis, treatment planning, and treatment induction phase, followed by a maintenance 

phase. Patient-centered, comprehensive and collaborative treatment plans would cover care from 

induction through stabilization, treatment, and long-term recovery. It would also support more 

intensive management when warranted by special circumstances such as a relapse, comorbidities, or 

a patient choosing to discontinue the medication. Payments under the model would be adjusted 

based on performance on outcome measures. 

Other Specialist Models: Under the Medicare physician fee schedule, physicians treating patients 

with chronic diseases, such as rheumatoid arthritis, asthma, headaches, and diabetes, are paid 

primarily basa:l on the number of times the patient comes to the physician' soffice. Tha"e is no 

payment for many high-value services, such as phone calls to respond to patient setbacks or 

complications and consultation with other physicians to improve diagnosis, treatment planning, and 

care coordination. Payments are often inadequate to support the additional time and services needed 

by patients with difficult-to-diagnose or difficult-to-treat conditions. As a result, patients may be 

inaccurately diagnosed or inappropriately treated, experience continued symptoms of their disease or 

side effects of medications that could have been avoided, and be hospitalized or seen in an 

emergency department for problems that could have been prevented. A number of specialty 

societies are designing physician-focused APMs to improve diagnosis and management of chronic 

diseases, including the American Academy of Neurology, American College of Rheumatology, 

American College of Allergy, Asthma & Immunology, American Association of Clinical 

Endocrinologists and others. Several of these models include elements in common, such as: a onetime payment to support a comprehensive diagnostic work-up, testing, and development of an initial 

treatment plan; monthly payments to cover the treatment and care management needed to get the 

condition under good control; payments to cover ongoing care, either by a primary care physician for 

patients whose conditions are well-controlled or continued care by a specialty team for patients with 

more difficult-to-control conditions or complex comorbidities; and support for collaboration between 

specialists and primary care physicians during diagnosis and treatment planning and when needed 

due to disease progression or other issues. 

PTAC Technical Assistance 

The PTAC reports to the HHS Secretary of May 31,2017 on Project Sonar and on the COPD and 

Asthma Monitoring Project included the statement, "8eca.Jse PT AC has boo"! a::lvisa:l that it may not 

provide technical assistance, the Committee is hopeful that the Secretary would consider options for 
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5 

providing technica assistance to this and other submitters." The AMA urges Congress to clarify the 

MACRA statute to ensure that the PTAC can provide data and technical assistance to individuals and 

organizations developing APM proposals. 

One of the greatest barriers physicians face in designing and implementing new approaches to care 

delivery and payment that will reduce Medicare spending is their inability to obtain data on the full 

range of services their patients are receiving today. Most of the savings from improved care delivery 

come from lower spending on services such as hospital admissions and post-acute care that are not 

delivered directly by physicians, and some of the biggest opportunities for improved care 

coordination come from avoiding duplication and conflicts with services delivered by other 

providers. Physicians do not have access to information about the other services their patients are 

receiving that would enable them to identifY and quantify opportunities for savings or take action to 

achieve these savings. If the PTAC could provide these types of data to those developing APM 

proposals, we believe it would significantly enhance the quality of the submitted proposals and 

greatly increase the likelihood of their testing and implementation. 

APM developers also need assistance with technical issues such as risk stratification. The risk 

adjustment methodologies used in the Medicare and Medicaid programs to date are designed to 

address differences in patient needs among large populations associated with a health plan or 

hospital. These methods cannot be appropriately transferred for use in risk stratifYing patients 

associated with a medical practice or those with a particular condition. Current risk adjustment 

methods, for example, do not take into a::rount patients' stcgeof disease, functional status, a1d 

whether they have a caregiver at home. Factors like these can have a significant effect on treatment 

plans, adherence, and patient outcomes. The PT AC r~rt to HHS on "The COPD and Asthma 

Monitoring Project" de&:ri bes questions about the project' s propose:l risk ooj ustment 111E'ihodol ogy 

and indicates that the proposal would benefit from technical assistance on this and other issues, but 

notes that" PT AC has been 00vise:l that it may not providetechnica assista1ce." 

Policy Recommendations 

Recently the AMA applauded an announcement by the CMS Administrator regarding a new 

direction for the Center for Medicaid and Medicare Innovation. We were extremely pleased that this 

announcement sought comments on how CMS can help develop APMs for specialists, engage in 

limited scale model tests, adopt behavioral health APMs, test models involving direct contracting 

with patients, and expand opportunities for participation in Advanced APMs under MACRA. The 

AMA will be making a number of recommendations to CMS in response to this Request for 

Information. 

The AMA is also extremely pleased that Medicare has finalized coverage of remote patient 

monitoring in the fee-for-service program subject to a number of coverage requirements. This is an 

important bridge for physicians being paid through the Medicare fee schedule to transition into 

APMs as remote patient monitoring provides new tools that will help patients and physicians 

actively manage chronic conditions and improve population health. 

Several of the key challenges facing APM participants and developers are highlighted below, along 

with our policy recommendations to address them. 

Need for a True Innovation Lab: The internal CMS process for developing each model that it wants 

to test takes 18-24 months. Although Congress established the PT AC to review APMs proposed by 

stakeholders, there is no real pathway for these stakeholder-developed APMs to be tested and 

implemented. The AMA recommends that CMS encourage physicians to develop an array of 
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6 

approaches that make sense for the patients they treat in the specific environment where they 

practice. CMS should then be ready to quickly test multiple approaches to see which ones work, 

instead of trying to decide on one single best approach before any testing is done. In addition, the 

process needs to be speeded up. We are about to enter the second MACRA performance period with 

only about five percent of clinicians in Advanced APMs. Other industries have methods for rapid 

prototyping and CMS should develop a similar approach to testing APMs. CMS and the PT AC also 

should better integrate their processes. 

Do Not Tie Financial Risk to Total Spending: Physicians participating in an APM can appropriately 

take a:countability, including financia risk, for aspects of their patients ca-ethct they can oontrol or 

influence. These include decisions on the appropriateness of tests they order, procedures they 

perform, medications they administer, whether patients are discharged to their homes or to expensive 

facilities. Physicians should not be expected to take risk for the prices of drugs and biologics or the 

severity of their pctients conditions md their functiona stctus. Most Medica-e spending does not 

go to physi ci m !B"Vi ces, so i ncreali ng physi ci ms fi ncnci a risk for M edi ca-e spending on hospita s 

and drugs will be a major barrier to increasing their participation in APMs. 

Lessen Administrative Burdens: Many of the concerns that we hear from physicians about the 

current payment system have more to do with administrative and regulatory burdens than with 

payment rates. Prior authorization, certification, documentation and reporting requirements, and 

electronic health record systems that do more to hinder than support patient care are enormously 

burdensome. In developing APMs, CMS should take maximum advantage of opportunities to lessen 

these burdens by waiving Medicare and other payer requirements. This could allow for new pilot 

programs using telehealth, for example. In addition, when APMs require any type of reporting or 

documentation, payment rates should be adequate to cover physician costs associated with these 

tasks. 

The AMA strongly supports efforts to reduce barriers to higher quality care and lower costs in 

current payment systems through the development of APMs. We appreciate the opportunity to 

provide our comments on this matter and look forward to working with Congress and CMS on 

developing options for value-based care. 
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I APT A American Physkal Therapy Association,. 

Comments of the 

American Physical Therapy Association 

Health Subcommittee of the Committee on Energy and Commerce 

Wednesday, November 8, 2017 

For a hearing titled 

"MACRA and Alternative Payment Models: Developing Options for Value-based Care." 

On behalf of our more than 100,000 member physical therapists, physical therapist 

assistants, and students of physical therapy, the American Physical Therapy Association 

(APTA) appreciates the opportunity to submit comments to the Health Subcommittee of 

the House Energy and Commerce Committee as it considers the development and use of 

alternative payment models (APMs). 

APT A's goal is to improve the health and quality of life of adults and children in our 

society by advancing physical therapist practice, education, and research and by 

increasing the awareness and understanding of physical therapy's role in the nation's 

health care system. APTA is committed to being a vested partner with the Centers for 

Medicare and Medicaid Services (CMS) as it moves swiftly toward its goal of shifting 

from Medicare payment based solely on fee-for-service to a value-based payment 

system. 

To that end, APTA urges the committee and Congress to ensure that physical therapists 

can participate fully in the development and use of APMs moving forward. As Congress 

continues to explore the future of APMs, APTA is pleased to make the following 

recommendations: 
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Recommendations 

Expand Focus of APMs to Include Rehabilitation 

Physical therapists are central to the quality of care throughout the health care 

continuum, and they work cohesively as members of the health care team to ensure the 

success of innovative delivery models such as bundled payments and accountable care 

organizations. The success of APMs in improving the quality of care and reducing costs 

will depend on the collective efforts of all providers throughout the health care 

spectrum, including physical therapists in private practice, home health agencies, 

rehabilitation agencies, inpatient rehabilitation facilities, skilled nursing facilities, 

hospitals, and other provider settings. The care provided by physical therapists is critical 

to improving patients' function and successfully transitioning patients from one setting 

to the next. For these reasons, the physical therapy profession is well-positioned to be a 

key player in innovative models. 

However, there are significant hurdles that impede physical therapists from fully 

participating in APMs. Current Advanced APMs bar specialty and nonphysician providers 

from participation. To accelerate the adoption and use of Medicare (and Medicaid) 

APMs, CMS should undertake a stronger effort to promote payment models that are 

accessible to all providers, including physical therapists. We recommend that CMS apply 

significantly more time and resources toward developing rehabilitation-inclusive APMs. 

Greater action must be taken to integrate rehabilitation services into payment models. 

Further, as the development of APMs continues onward and APM engagement grows, 

we strongly recommend that CMS provide additional guidance, technical assistance, and 

other support to providers who have not yet participated in APMs. As illustrated by the 

current approved list of Advanced APMs and throughout the current roster of projects 

under way by the Center for Medicare and Medicaid Innovation (CMMI), rehabilitation 

has not been a focus, and, therefore, the participation of physical therapists in APMs has 

not been as robust as that of primary care physicians and hospitals. 

The true potential to reduce costs and improve the health of individuals and populations 

will not be fully realized until CMS takes meaningful steps to include physical therapists 

and other rehabilitation providers within APMs, including Advanced APMs. APTA urges 

Congress to promote the inclusion of physical therapy in APMs as it continues oversee 

implementation of the Medicare Access and CHIP Reauthorization Act of 2015 

(MACRA). 

Develop APM Pathways for Non physician Providers 

Empowering physical therapists to develop and lead APMs will result in expanded access 

to medically necessary rehabilitative care for Medicare beneficiaries, leading to 

improved outcomes and higher quality of life. Numerous physical therapy practices and 

rehabilitation entities are at the forefront of innovation, and these entities should be 

able to become key players in health care transformation. APTA urges Congress to 

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direct CMS to create APM pathways under CMMI and through the Physician-Focused 

Payment Model Technical Advisory Committee that allow physical therapy practices, 

rehabilitation agencies, and other therapy providers to be the main conveners of 

approved APMs. 

We also recommend that the agency solicit input from small practices when creating 

future payment models to ensure that a key demographic of providers is adequately 

represented. This will help to ensure that current challenges associated with APMs are 

resolved in future model iterations. Moreover, CMS should not advance any new 

payment model until it can ensure that the model would not perpetuate or intensify 

patient access issues. Further, implementation of any new model should not occur until 

CMS can confirm that all stakeholders are adequately prepared to participate in the 

model. 

Promote Quality and Outcome Measures to Ensure APM Success 

As previously stated, rehabilitation services such as physical therapy are integral 

components of APMs. Unfortunately, many of the metrics that have been developed to 

assess progress are exclusive of nonphysician specialties, including physical therapy. 

Additionally, some metrics are not attributed to nonphysician specialties due to the 

measure attribution methodologies; this includes cost metrics and metrics for 

readmissions at the provider level. APTA believes that both team-based metrics and 

specialty-specific metrics are important to the delivery of high-quality care. 

As CMS undertakes the development of new APMs, we urge the agency to include 

quantitative and qualitative metrics, including meaningful performance-based and 

patient-reported outcome measures, by which CMS can ensure that coordinated, 

patient-specific, outcome-based care is being delivered safely by properly qualified 

professionals. The variety of measures included within APMs must include measures 

applicable to multiple types of clinicians. Specialty sets should be developed and 

adopted for nonphysician providers, including physical therapists. Such measures should 

contribute to coordinated care, be correlated to positive health outcomes, and not 

impose an undue burden on providers. The types of measures that we recommend CMS 

develop and adopt are measures that monitor and track patient outcomes, provider 

performance, and changes in utilization of services. Including a robust set of quality 

measures within APMs will help to show the positive effects of non physician providers' 

interventions on patient outcomes. 

To ensure that APMs are multidisciplinary, we recommend that CMS mandate the 

inclusion of functional measure items within APMs that show the value of providers who 

traditionally have been excluded from APM participation. It is critical that new models 

include appropriate measures that address function and illustrate the value of each 

provider to the APM patient population. To assist Congress and CMS in its efforts, APTA 

welcomes the opportunity to serve as a resource to CMS and share data results at the 

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clinician, practice, and national levels for the measures included in APT A's Qualified 

Clinical Data Registry (QCDR}. 

Advance Registry as Integral to Future Success of Models 

It is important for CMS to continue to support the development and success of 

professional registries as we move toward outcomes-based payment and advanced 

quality reporting structures that will rely heavily on electronic data submission. CMS 

must look beyond claims to create an affordable, accessible health care system that puts 

patients first. In recent years, clinical data registries have evolved and are now 

embraced by more than 20 professional associations. Development of these registries 

has been spurred by the need to create meaningful quality measures to assist providers 

in the shift to value-based payment and models of care. These registries will be critical 

to the success of innovative payment models in the future, as they have the ability to 

deliver real-time data to providers for monitoring, assessing, and responding to new and 

dynamic models of care delivery. 

QCDRs, such as the Physical Therapy Outcomes Registry, capture relevant data from 

electronic health records (EHRs) and billing information, and transform this data into 

meaningful, intuitive, and actionable feedback for providers on the frontline of patient 

care. New models of care will require providers to have access to real-time data so they 

can successfully identify and modify care design to maximize patient outcomes. The use 

of real-time data will allow for better coordination throughout the continuum of care 

and can be used to break down traditional silos of care. We believe the use of real-time 

data should be a guiding principle for these future models. Additionally, we encourage 

CMS to look for ways to incorporate real-time patient data, such as patient-reported 

outcomes, and other patient-generated data, such as from wearable devices, into 

innovative models. APTA asks Congress to direct CMS to incorporate the use of data 

from registries into future care models. 

Encourage CMS to Address Lack of EHR Standards for Nonphysician Providers 

To facilitate an increase in the number of eligible clinicians choosing to participate in 

Advanced APMs, CMS should establish a policy that permits physical therapy EHR 

vendors to have certified EHR technology (CEHRT). No physical therapy EHR vendors 

have certified EHR technology (CEHRT), and the US Department of Health and Human 

Services (HHS) has not yet addressed how these vendors would meet the CEHRT 

requirements. While the Office of the National Coordinator of Health Information 

Technology (ONC) certification process has established standards and other criteria for 

structured data that EHRs must use, there is no standard certification criteria for EHRs 

for physical therapists. APTA urges Congress to direct CMS and ONC to work together 

to develop standardized certification criteria for EHRs for physical therapists and other 

rehabilitation providers. 

As CMS moves to establish guidance for physical therapy CEHRT, APTA recommends 

that CMS implement a temporary waiver for physical therapists and other specialty 

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providers not yet included in meaningful use. Physical therapists have been exempt 

from EHR meaningful use and have not been afforded the same resources as physicians 

and hospitals for health information technology adoption. This waiver would permit 

physical therapists and similar specialty service providers to participate in Advanced 

APMs until CMS has adopted a policy for physical therapy-specific CEHRT. Once a policy 

has been adopted, we request that Congress direct CMS to provide appropriate 

resources and support, including implementation assistance and/or consultant 

support, to physical therapists and other non physician providers as they adopt 

certified EHRs, to better enable small practices, such as physical therapy practices, to 

participate in these new models of care. 

Create Incentives for Collaborative, Coordinated Care 

To enhance the quality and safety of patient care, we encourage HHS to consider 

revising current regulations so that different disciplines-including physical therapists, 

occupational therapists, speech-language pathologists, physicians, nurses, physical 

therapist assistants, occupational therapy assistants, social workers, psychologists, 

psychiatrists, and nutritionists-are encouraged to work as a unified care team across 

the care continuum. HHS should incentivize health professionals to work as an 

interdisciplinary team to not only increase communication and cooperation among 

providers but also improve the effectiveness of care delivered to patients. Cohesive 

teamwork across disciplines will lead to improved patient outcomes. 

Unfortunately, current Medicare policies fail to effectively promote interdisciplinary 

collaboration; as such, there is limited communication among providers across settings. 

Accordingly, APTA recommends that to improve patient outcomes and quality of care, 

CMS more effectively encourage coordination and communication between health care 

professionals in such a manner that does not create an increased financial or 

administrative burden on health care providers. APTA strongly believes that the success 

of APMs in improving the quality of care and decreasing costs depends on the 

collective efforts of all health care providers throughout the health care spectrum. 

Finally, we recommend that Congress direct CMMI to better support the creation of 

models that no longer rely on the fee-for-service structure, as it will become increasingly 

difficult to make the appropriate cost adjustments using these types of retrospective 

cost-setting methodologies in the future. 

Should you have any questions regarding our comments, please contact Kara Gainer, 

Director, Regulatory Affairs, at karagainer@apta.org or 703/706-8547. Thank you for 

your consideration of these comments from the APTA. 

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November 8, 2017 

The Honorable Greg Walden 

Chairman 

HFALTHCARE 

LEADERSHIP 

C~UNCIL 

Committee on Energy and Commerce 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Chairman Walden: 

On behalf of the Health care Leadership Council (HLC), I am writing to thank you for 

your commitment to advancing reform of the nation's healthcare delivery system. 

HLC is a coalition of chief executives from all disciplines within American healthcare. It 

is the exclusive forum for the nation's healthcare leaders to jointly develop policies, 

plans, and programs to achieve their vision of a 21st century health system that makes 

affordable, high-quality care accessible for all Americans. Members of HLC -hospitals, 

academic health centers, health plans, pharmaceutical companies, medical device 

manufacturers, laboratories, biotech firms, health product distributors, pharmacies, postacute care providers, and information technology companies - advocate for measures 

to increase the quality and efficiency of healthcare through a patient-centered approach. 

HLC has long supported a shift away from fee-for-service health care toward a system 

based on providing better value for healthcare consumers. Our member organizations 

have been proponents of delivery system innovations that are value-based, patientcentered and reward improved quality and cost-effective care. 

HLC strongly supported the Medicare Access & CHIP Reauthorization Act of 2015 

(MACRA) and is pleased to provide feedback that we expect will strengthen the broader 

transition to a payment system that emphasizes value. As providers in the delivery 

system transition to a new payment system that emphasizes value, we encourage 

prioritizing consumer feedback and outreach, provider feasibility and minimizing new 

administrative burdens. We have been pleased to see significant action on key 

recommendations provided by HLC in previous years. In particular, 

• HLC encourages Congress and the Administration to continue to push forward 

with its efforts to facilitate the movement of organizations to pay-for-performance 

and Advanced Alternative Payment Models (AAPMs). A critical element of this 

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effort will be incorporating complementary value-based arrangements (such as 

Medicare Advantage) into AAPM MACRA thresholds as soon as possible. 

• HLC appreciates CMS allowing Merit-based Incentive Payment System (MIPS) 

eligible physicians the opportunity to "pick their pace" by submitting data from a 

90-day performance period, rather than a full year. 

• HLC is pleased to see and strongly supports efforts to reduce the quality 

measure reporting burden on clinicians. HLC continues to stress that these and 

other flexibilities are necessary as it may be difficult - particularly in the initial 

years - to design APMs that meet the financial risk standards and are attractive 

to a variety of providers. The federal government must ensure, however, that 

these flexibilities do not lessen important incentives for provider participation. 

• HLC supports proposals in the Quality Payment Program (QPP) designed to 

address the challenge of attracting providers without prior risk-bearing 

experience into new alternative payment arrangements (such as the virtual 

groups proposal). We encourage the federal government to continue to 

implement these proposals in a way that acknowledges the wide range of 

technological and reporting capabilities of providers, including the provision of 

regular outreach, training, and education to allow for wider adoption. 

• HLC supports the creation of a new improvement activity for clinician leadership 

in clinical trials, research alliances, or community-based participatory research 

(CBPR)- especially around minimizing disparities in healthcare access. HLC 

supports this effort to improve clinical trial enrollment and encourages the federal 

government to consider including other physicians or even a counseling service 

payment to incentivize providers to provide information on clinical trials. 

As shared in previous correspondence, HLC would like to continue to emphasize 

several broader priorities that we believe are critical for the overall success of valuebased care programs. 

Congress should adopt changes to modernize the federal fraud and abuse legal 

framework to facilitate stronger provider performance in MIPS measurement 

categories and facilitate growth into full AAPMs. Modernization of the current legal 

framework is needed to make it more compatible with healthcare delivery system 

transformation while retaining appropriate protections against fraud and abuse. 

Congress should amend Anti-Kickback Statute and Stark Law to allow waivers for 

stakeholders engaged in alternative payment arrangements (both AAPMs and MIPSreporting APMs) that meet certain conditions. (An unpredictable and burdensome 

system of "one-off' waivers is not sufficient for alternative payment goals). Congress 

should also extend existing Anti-Kickback Statute and Stark Law exceptions for 

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donation and financial support of electronic health information products that facilitate 

care coordination, cyber security protection, and compliance with Advancing Care 

Information performance category goals. 

Congress and CMS must plan now to implement a strategy that will facilitate the 

introduction of innovative private-sector alternative payment arrangements when 

permitted in 2021. HLC believes that MA plans, commercial health plans, Medicaid 

managed care organizations (MCOs), and other appropriate entities should be eligible 

for consideration as Other Payer Advanced APMs. It is critical that the federal 

government offer clear and consistent guidance over the next several years as these 

entities prepare to participate in the program. Including other payers as Advanced 

APMs would help advance the movement toward value-based care. Making the Other 

Payer Advanced APM category as broad and as flexible as possible will help move the 

entire health system toward care focused on value and optimal patient outcomes. HLC 

encourages CMS to be transparent, flexible, and consistent regarding the criteria for 

APM "eligibility" for advanced model consideration. It is equally important for CMS to 

consider the sensitivity of patient and proprietary contractual information to ensure that 

transparency efforts are also protective of disclosure. Similarly, the Other Payer 

certification process and timelines will need to reflect the realities of the market, and 

would be best supported by a flexible, rolling AAPM certification process. 

CMS should focus on the alignment of measurement across all programs to ensure 

current incentives (such as MA benchmark calculations) facilitate the transition to Other 

Payer Advanced APM arrangements. CMS should recognize that MA plans forming 

Other Payer Advanced APM arrangements will need to adjust their bids to account for 

increased risk and the requirements of other value-based initiatives; and the 

benchmarks must be adjusted accordingly. 

One approach to facilitating a strategy for Other Payer Advanced APMs would be using 

the Center for Medicare and Medicaid Innovation (CMMI) demonstration projects {under 

1115A waiver authority). Treating providers who contract with private sector alternative 

payment arrangements and who meet requirements regarding EHR usage, quality, and 

financial risk as participating AAPMs would allow for consistent application of APM 

requirements across the Medicare program while reducing provider burden. A voluntary 

demonstration project designed to test risk contracts between health plans and other 

stakeholders for inclusion as Other Payer Advanced APMs would allow both CMS and 

the private sector time to perfect the rules for MA and other programs to become a 

qualifying MACRA AAPM. A CMMI demonstration could also allow for experimentation 

in harmonizing performance measures across programs. HLC members believe the 

inclusion of MA plans would create a meaningful path for clinicians to pursue the five 

percent MACRA bonus. 

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Quality measurement should better incorporate socieoeconomic status 

adjustments to incentivize alternative payment arrangements in areas of high 

need. It is critical that all efforts to move to outcome-based payment properly account 

for both complexities of patients as well as the socioeconomic challenges that providers 

face in caring for patients. Without these adjustments, efforts to reward higher 

performing providers may result in lower funding for those serving the most vulnerable. 

To ensure appropriate payment and risk-adjustment, quality programs under MACRA 

should include a reasonable number of measures that truly capture variance in patient 

populations. We support the use of a limited number of standard, vetted measures and 

urge CMS to synchronize measures, expectations, and reporting requirements with 

existing efforts in the private sector. By working closely with experts in the private 

sector, a system that appropriately reflects health system challenges- such as the 

social and economic status of consumers -can create a more accurate payment 

system. 

It is imperative that Congress and CMS continue to work closely with privatesector health leaders during MACRA implementation. The law provides CMS with 

an unprecedented ability to transform health care delivery through incentives. These 

changes, which will have far-reaching and significant effects on consumers nationwide, 

should be validated by healthcare experts across the healthcare system. These 

changes must be deliberate, transparent, and allow for meaningful collaborative effort. 

Similarly, we urge the federal government to provide clear, concise, and actionable 

feedback on a timely and regular basis to allow providers to improve the quality of care 

delivered to patients and enhance program performance. 

HLC appreciates the opportunity to comment on the proposed rule. Please contact Tina 

Grande, SVP for Policy, at tgrande@hlc.org or 202-449-3433 with any questions. 

Mary R. Grealy 

President 

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Bruce Johnson, MD, FASCO 

President 

American Society of Clinical Oncology 

Statement prepared for: 

House Energy & Commerce Committee 

Subcommittee on Health 

MACRA and Alternative Payment Models: Developing Options far Value-based Care 

November 8, 2017 

The American Society of Clinical Oncology (ASCO) is pleased to submit this statement for the 

record of the hearing entitled, "MACRA and Alternative Payment Models: Developing Options for Valuebased Care." ASCO appreciates the work of the Energy & Commerce Committee, specifically this 

subcommittee, in shepherding passage of the Medicare Access and CHIP Reauthorization Act of 2015, 

which repealed the flawed sustainable growth rate formula and established a path for the development 

of alternative payment models (APMs) that recognize the delivery of high quality, high value care. 

ASCO is the national organization representing more than 42,000 physicians and other healthcare 

professionals specializing in cancer treatment, diagnosis and prevention. Medicare beneficiaries over 

the age of 65 account for 54% of all new cancer care cases. With that in mind, we offer our strong 

support for the development of additional alternative payment models tailored to oncology care. 

Congress passed MACRA, in part, to move the Medicare program from traditional fee for service to a 

system that pays for high quality care delivery. Two years since passage, the Center for Medicare and 

Medicaid Services (CMS) has taken some important steps forward, but accomplishing this transition 

requires the availability of a menu of APMs for physicians. To date CMS has approved one alternative 

payment model in the oncology care space- the Oncology Care Model (OCM). ASCO looks forward to 

continued work with CMS and the Physician Technical Advisory Committee (PTAC) to implement 

additional oncology-focused APMs, such as the Patient-Centered Oncology Payment (PCOP) model, to 

provide flexibility to oncologists to choose the best option for their patients and their practices. 

Need for Multiple Oncology Specific APMs 

Given the significant morbidity, mortality and financial expenditures arising from cancer in the Medicare 

population, CMS should avoid a narrow approach that fails to test more than one oncology-focused 

APM option to meet the needs ofthe diverse Medicare population. CMS should embrace oncologyfocused Advanced APMs that differ from the OCM, and CMS should remain open to implementing 

additional oncology-focused models on a timely basis through the Physician Focused Payment Model 

pathway created by Congress. 

Multiple oncology-specific APMs are needed to enable oncologists to select the optimal approach for 

their patients and their practices to survive in a value-based payment environment and to facilitate the 
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oncology community's transition out of the Merit-Based Incentive Payment System (MIPS). The OCM, 

which is currently in place through the Innovation Center, is certainly one such approach that has drawn 

participation from a large number of practices. This is a testament to the willingness that cancer care 

providers have to move from the current fee for service system. 

Medicare's need for additional oncology APMs is critical, since cancer is extraordinarily complex. 

Additional APMs could be one tool in dealing with specialty drug costs in the rapidly changing 

environment of personalized cancer care. It would be a waste of the opportunity created by Congress if 

only one model were to be tested. Therefore, additional approaches to reforming oncology payment are 

needed and should be tested by the Innovation Center. 

ASCO's Patient-Centered Oncology Payment {PCOP) Model 

ASCO's PCOP model will soon be under consideration by the PTAC. Congress created the PTAC as an 

advisory board and we encourage CMS to take seriously the recommendations of PTAC. Our 

membership is engaged and eager to participate in testing innovative models that lead to better care. 

We anticipate continuing to revise both our reporting requirements as well as the details of our oneand two-sided risk financial components to meet the needs of all constituents. The PCOP model 

positions eligible clinicians to move into monthly payments upon demonstrating their ability to succeed 

in this care management and payment environment. 

PCOP Model Overview 

The PCOP Model is the product of an ASCO volunteer work group comprised of leading medical 

oncologists, seasoned practice administrators, and experts in physician payment and business 

analysis. It has benefitted from extensive feedback by ASCO members, policymakers and a wide 

range of stakeholders across the oncology community, including patient advocates. 

The basic PCOP model provides supplemental, non-visit-based payments to oncology practices 

to support diagnosis, treatment planning, and care management. Oncology practices would be 

able to bill payers for four new service codes: 

1. New Patient Treatment Planning 

2. Care Management during Treatment 

3. Care Management during Active Monitoring 

4. Participation in Clinical Trials 

Practices would continue to be paid as they are today for services currently billable under the 

Medicare Physician Fee Schedule, including Evaluation & Management services, delivery of 

chemotherapy and immunotherapy, and drugs administered or provided to patients by the 

practice. 

PCOP introduces two-sided risk in a way that engages eligible clinicians while not putting 

financial viability of physician practices at risk. It requires robust reporting of quality measures 

and treatment pathway compliance to ensure quality of care. 
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Goal of the PCOP Model 

The goal of the PCOP model is to better support for services critical to high value, high quality 

care. Oncology practices would receive payment for care management, including management 

of toxicities and other supportive care patients with cancer need-and that avoid costly 

hospitalizations and emergency department visits. Payments would be made in a way that 

allows practices the flexibility to provide this care in a way that meets the unique circumstances 

of their staffing, their care delivery environment and, most important, unique needs of the 

patient. It also enhances quality without increasing financial burdens on patients. 

Expected Participants 

All patients who have a cancer diagnosis requiring chemotherapy or immunotherapy are eligible 

to participate in the PCOP model. ASCO has engaged a wide range of oncologists from across the 

country in the development of PCOP, indicating its broad support and their willingness to 

participate. Additionally, one practice and payer have already implemented PCOP, show casing 

its viability. We expect participation from medical oncology practices at diverse practice sites, 

including small independent practices, wherever PCOP is available. 

PCOP differs from the OCM by supporting the full range of resources necessary for oncology providers 

to plan, coordinate and manage cancer treatments, while focusing on efficient utilization of resources, 

avoidance of ineffective spending, and reduction in unnecessary hospital visits. The PCOP model also 

offers the opportunity for practices and payers to transition to bundled payments once proficiency has 

been demonstrated in the fee for service model. We will continue to dialogue with the Innovation 

Center regarding implementation of PCOP to provide an alternative pathway for oncology APM 

participation. Congress should use its continued oversight authority to encourage such conversations 

that will further the goals of MACRA. 

ASCO thanks the subcommittee for its bipartisan commitment to strengthening the Medicare program. 

If you have questions about this or any issue affecting cancer care, feel free to reach out to Amanda 

Schwartz at Amanda.schwartz@asco.org or 571-483-1647. 
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_A, 

AHIP 

STATEMENT FOR THE RECORD 

Submitted to the 

House Energy and Commerce Committee 

Subcommittee on Health 

"MACRA and Alternative Payment Models: 

Developing Options for Value-based Care" 

November 8, 2017 

America's Health Insurance Plans 

601 Pennsylvania A venue, NW 

Suite 500, South Building 

Washington, D.C. 20004 

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America's Health Insurance Plans (AHIP) is the national association whose members provide 

coverage for health care and related services to millions of Americans every day. Through these 

offerings, we improve and protect the health and financial security of families, businesses, 

communities and the nation. We are committed to market-based solutions and public-private 

partnerships that improve affordability, value, access and well-being for the American people. 

Value-Based Agreements Improve Health Care for Medicare Beneficiaries 

We thank the committee for focusing on the role of Alternative Payment Models (APMs) in 

providing incentives for high quality, cost-effective patient care under the "Medicare Access and 

CHIP Reauthorization Act of2015" (MACRA). 

Through their participation in the Medicare Advantage (MA) program, our members are strongly 

committed to serving Medicare beneficiaries. MA health plans have a long track record in 

emphasizing prevention, providing access to disease management services for chronic 

conditions, and offering systems of coordinated care for ensuring that beneficiaries receive the 

health care services they need. 

Unlike the traditional Medicare program, MA plans often offer additional, comprehensive 

benefits such as vision, dental, and hearing coverage, as well as a cap on out-of-pocket spending, 

and many plans offer drug coverage with no additional cost to beneficiaries. In addition, in 

comparison to the traditional Medicare program, MA has been shown to reduce hospital 

readmissions 1 and institutional post-acute care admissions2

, and increase rates of annual 

preventive care visits3 and screenings.4 As a result, the MA program has a beneficiary 

satisfaction rate of 90 percent. 5 

Value-based agreements are an important strategy used by MA plans to improve health care for 

Medicare beneficiaries. These agreements are designed to ensure that patients receive the greatest 

possible value for every dollar spent on their care. Through them, doctors, health care institutions, 

1 Lemieux, Jeff, Sennett, Cary, Wang, Ray, Mulligan, Teresa, Bumbaugh, Jon. Hospital readmission rates in 

Medicare Advantage plans. American Journal of Managed Care 18(2): 96-104. February 2012. 2 Huckfeldt, Peter J., Escarce, Jose J., Rabideau, Brendan, Karaca-Mandic, Pinar, Sood, Neeraj. Less intense postacute care, better outcomes for enrollees in Medicare Advantage than those in fee-for-service. Health Affairs 36( I): 

91-100. January 2017. 3 Sukyung, Chung, Lesser, Lenard 1., Lauderdale, Diane S. eta!. Medicare annual preventive care visits: Use 

increased among fee-for-service patients, but many do not participate. Health Affairs 34(1): 11-20. January 2015. 4 Ayanian, John Z., Landon, Bruce E., Zaslavsky, Alan M., et al. Medicare beneficiaries more likely to receive 

appropriate ambulatory services in HMOs than in traditional Medicare. Health Affairs 32(7): 1228-1235. July 2013. 5 Morning Consult National Tracking Poll. March 11-16,2016. 

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and health insurance providers come together to focus on one goal: helping the patient achieve 

their best health for the long term. 

A recent study, published in February 2017 by the American Journal of Managed Care, found that 

these initiatives have been successful. By delivering care in ways that focus on value, MA plans 

have increased the use of preventive health care services, increased physician office visits, reduced 

both emergency department visits and inpatient hospital admissions, and increased the lifespan for 

MA enrollees.6 

Specifically, for beneficiaries who received care from providers in value-based agreements: 

• Beneficiaries were almost 3 times more likely to undergo preventive care visits; 

• Women age 74 and younger were 28 percent more likely to undergo screening mammography; 

• Emergency department visits were reduced by 11.2 percent and inpatient hospital admissions 

were reduced by 11.9 percent; and 

• The overall survival rate was 6 percent higher than for other beneficiaries and the hazard of 

dying was 32.8 percent lower. 

The benefits of providers contracting with MA plans are further demonstrated by a study published 

by Health Affairs in September 2016. This study presented data showing that the innovative 

techniques employed by MA plans have a spillover effect that has contributed to the recent 

slowdown in national Medicare FFS spending. 7 Specifically, the study shows that in counties with 

high baseline MA penetration rates, each 10 percentage point increase in MA penetration was 

associated with a decrease in per capita FFS spending of $154 annually (nearly 2 percent). 

6 Mandai, Aloke K., Tagomori, Gene K., Felix, Randell V., Howell, Scott C. Value-based contracting innovated 

Medicare Advantage healthcare delivery and improved survival. American Journal qf Managed Care 23(2): e41-

e49. February 2017. 1 Johnson, Garret, Figuero, Jose F., Zhou, Xiner, Orav, E. John, Jha, Ashish K. Recent growth in Medicare 

Advantage enrollment associated with decreased fee-for-service spending in certain US counties. Health Affairs 

35(9):1707-1715. September 2016. 

3 
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MA Plans Can Provide Value as Advanced APMs 

As Congress examines the implementation ofMACRA and the role of APMs, AHIP supports a 

demonstration that would allow clinicians to receive credit under the Medicare Advanced APM 

rules for participating in financial risk-based arrangements with MA plans. 

In a final rule on MACRA issued last week, the Centers for Medicare & Medicaid Services (CMS) 

signaled its intention to test the effect such a demonstration would have in expanding incentives 

for eligible clinicians. We applaud CMS for taking this approach, and we look forward to working 

with the agency to design and implement the demonstration. 

In August 2017, AHIP addressed the attached letter to CMS outlining our guiding principles for 

designing a voluntary MA Advanced APM Incentive Demonstration Program. Our principles 

focus on: (I) establishing the basic structure of the demonstration; (2) supporting the infrastructure 

that is needed to transition to risk-based payment arrangements; (3) designing a demonstration that 

is budget neutral and also enhances quality; ( 4) developing an attestation process through which 

clinicians could indicate the percent of payments, or patients, associated with qualifying MA 

payment arrangements; and (5) preserving Medicare's non-interference clause to ensure that CMS 

cannot dictate pricing or contract terms between MA plans and their network providers. 

These principles, as discussed in our comment letter, are essential for ensuring that the CMS 

demonstration program effectively levels the playing field to provide equal incentives for providers 

under both the MA and FFS programs. Such a demonstration would recognize and reward the 

successful, innovative practices that MA plans and providers have already developed together to 

better serve their patients. It also would ensure that the MA program continues to deliver better 

care, improved health, and lower costs for Medicare beneficiaries. 

We thank the committee for considering our perspectives on the merits of establishing an MA 

Advanced APM Incentive Demonstration Program. We look forward to working with you as 

Congress continues its oversight ofMACRA and other Medicare issues. 

4 
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America's Health 

Insurance Plans 

601 Pennsylvania Avenue, NW 

South Building 

Suite Five Hundred 

Washington, DC 20004 

202.778.3200 

www.ahip.org 

August 21,2017 

Ms. Seema Verma 

Administrator 

Centers for Medicare & Medicaid Services 

Department ofHea1th & Human Services 

Hubert H. Humphrey Building 

200 Independence Ave., S.W. Room 445-G 

Washington, DC 20201 

AHIP ~ 

Submitted electronically via http://www.regulations.gov 

Medicare Program; CY 2018 Updates to the Quality Payment Program 

Dear Administrator Verma: 

America's Health Insurance Plans (AHIP) is writing on behalf of our members in response to the 

Centers for Medicare & Medicaid Services' (CMS) Notice of Proposed Rulemaking for the Medicare 

Program; CY 2018 Updates to the Quality Payment Program (QPP). AHIP is the national trade 

association representing health insurance plans. Our members provide health and supplemental 

benefits through employer-sponsored coverage, the individual insurance market, and public programs 

such as Medicare and Medicaid. AHIP advocates for public policies that expand access to affordable 

health care coverage to all Americans through a competitive marketplace that fosters choice, quality, 

and innovation. 

AHIP appreciates CMS' efforts to solicit feedback on the proposed changes for year two of the QPP. 

In general, AHIP is supportive of efforts to alleviate administrative burden to encourage clinician 

participation in the Merit-based Incentive Payment System (MIPS) and a transition path to Advanced 

APMs. We also strongly support CMS' consideration of a demonstration that would allow clinicians 

to receive credit under the Medicare Advanced APM rules for financial risk based arrangements with 

Medicare Advantage (MA) plans. Our recommendations concerning such a demonstration and select 

proposals in the Notice of Proposed Rulemaking are below. We look forward to working with CMS to 

develop the demonstration. 
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I. MIPS in QPP Year 2 

Low Volume Threshold for MIPS Eligibility 

In the current year, or 2017 transition year, of the MIPS program, clinicians with less than or equal to 

$30,000 in Part B allowed charges or who provide care for 100 or fewer Part B beneficiaries are 

excluded from MIPS. CMS has stated that any clinicians or groups who are excluded from MIPS may 

still voluntarily participate in MIPS and are not subject to the MIPS payment adjustment. Beginning 

with the 2018 performance year, CMS is proposing to increase this low-volume threshold to allowed 

charges of less than or equal to $90,000 or 200 or fewer Part B beneficiaries. CMS believes this will 

likely exclude 134,000 additional clinicians from MIPS from the approximately 700,000 clinicians that 

would have been eligible based on the low-volume threshold that was finalized in the CY 2017 QPP 

final rule. 

Comments: 

AHIP supports CMS' continued focus on the creation of pathways for small group practices to 

successfully participate in MIPS. We believe some of the proposed changes described below will help 

continue to move the program in the right direction. 

AHIP, for example, supports modification to the low volume threshold to exclude small groups, rural 

practices and practices in Health Professional Shortage Areas (HPSAs) from MIPS, but still allow 

them to voluntarily participate in MIPS without being subject to potential negative payment 

ac{justment. 

Although AHIP supports the public dissemination of MIPS data, it is important that the information be 

released in a form that is convenient and simple to understand for all health care stakeholders. To that 

end, we encourage CMS to work closely with stakeholders to develop templates, draft language, etc. to 

ensure the public at-large can easily decipher, digest, and use this important information. 

Additionally, peiformance data must be presented in a format that is understandable by the provider. 

For example, CMS could consider developing standardized summary reports and delivering them to 

providers along with detailed supporting data. 

Additionally, we are supportive of the proposal that allows clinicians and groups who might otherwise 

be excluded from MIPS based on not meeting either the threshold for Part B allowed charges or 

attributed Medicare patients, but who exceed one of these low-volume thresholds, to still choose to 
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Page3 

participate in MIPS and be subject to the MIPS payment adjustments. Given the change in low volume 

threshold in year two, we suggest CMS allow providers who exceed both thresholds to still voluntarily 

participate in MIPS and be subject to the MIPS payment adjustment. 

Virtual Groups 

CMS is proposing that beginning in 2018 small provider groups would have the option to report as 

"virtual groups" for year 2 and beyond. Additionally, CMS has more specifically defined a virtual 

group as a combination of two or more TINs composed of a solo practitioner or a group with l 0 or 

fewer eligible clinicians under the TIN that elects to form a virtual group with at least one other such 

solo practitioner or group for a performance period for a year. CMS states that providing these 

additional flexibilities and reduction in barriers will further enhance the ability of small practices to 

participate successfully in the QPP. 

Comments: 

AHIP supports the implementation of virtual groups as a way to accommodate small practices and 

practices in rural or HPSAs, and agrees with the proposal to define a virtual group as a solo 

practitioner or a group with I 0 or fewer eligible clinicians under the TIN that elects to form a virtual 

group with at least one other such solo practitioner or group for a performance period for a year. This 

will allow small practices to more easily form a virtual group and begin MIPS participation. 

We suggest CMS provide additional information regarding reporting requirements for virtual groups. 

Specifically, we suggest CMS require all members of a virtual group to report on the same measure 

set, which would allow CMS to more easily calculate pe~formance against measures. 

We also continue to support the idea of providing technical assistance to MIPS eligible clinicians in 

small practices, rural areas, or to clinicians practicing in HPSAs, as this will help them be successful 

in MIPS. 

Performance Period 

In the 2017 transition year, CMS is requiring a minimum 90-day performance period for the categories 

of Quality, Advancing Care Information, and Improvement Activities. The Cost category is currently 

measured on a 12-month performance period. CMS is proposing to require a 12-month performance 
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period for the Quality and Cost categories and continue the 90-day performance period for Advancing 

Care Information and Improvement Activities. 

Comments: 

AHIP supports the proposal for the I2-month performance period for the Quality category, as we 

believe the current 90-day performance period is not sufficient for clinical practices to thoroughly 

diagnose performance, make practice improvements and re-assess to gauge effectiveness of 

improvement activities. CMS should consider a longer performance period for the Improvement 

Activities category as well, given that a key MIPS strategic goal is process implementation that drives 

movement toward delivery system reform and continued quality improvement. 

Additionally, we encourage CMS to look for ways to narrow the gap between the performance period 

and the payment period for the QPP program. By more closely coupling reporting to payment periods, 

e.g. instituting a 6-month gap, CMS will allow physicians to better understand the performance and 

payment link as well as implement the necessary steps to improve processes based on more recent 

itiformation about their performance. 

Performance Threshold 

In the 2017 transition year, CMS requires a minimum of 3 points be achieved for clinical practices 

participating in MIPS to avoid a negative payment adjustment. CMS also requires practices achieve 

between 4 and 69 points to achieve a positive adjustment and 70 or greater points to be eligible for an 

exceptional performance bonus. For year 2 of the QPP, CMS is proposing to increase the performance 

threshold from 3 points to 15 points, while keeping the additional (exceptional) performance threshold 

at 70 points. CMS believes moving the performance threshold to 15 points represents a meaningful 

increase in the performance threshold that will drive quality improvement while maintaining flexibility 

for MIPS eligible clinicians in the pathways available to achieve this performance threshold. 

For example, clinical practices can achieve 15 points by: 

Reporting all required improvement activities. 

• Meeting the advancing care information base score and submit I quality measure that meets 

data completeness. 

• Meeting the advancing care information base score, by reporting the 5 base measures, and 

submit one medium weighted improvement activity. 

• Submitting 6 quality measures that meet data completeness criteria. 
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Comments: 

AHIP supports the change in performance threshold 

Facility Based Measurement 

As a new proposal for year two of the QPP, CMS is proposing to implement a voluntary facility-based 

scoring mechanism, which would be based on the current Hospital Value Based Purchasing Program 

and be available to facility-based clinicians who have at least 75% of their covered professional 

services supplied in the inpatient hospital setting or emergency department. The facility-based 

measurement option will convert a facility Total Performance Score into a MIPS Quality performance 

and Cost performance score. 

Comments: 

AHIP supports the proposal, as this will allow clinicians who mainly treat patients in a facility setting 

to still be eligible to participate in the QP P. 

Quality Performance Category 

Under the 2017 QPP final rule, for the 2019 payment year, CMS requires a 50% data completeness for 

quality measures, with measures that do not meet the data completeness criteria receiving a maximum 

of 3 points. The final rule also provided that the data completeness threshold would increase to 60% 

for the 20 18 MIPS performance period. In addition, CMS is not currently incorporating a performance 

improvement (year over year) factor. 

CMS is proposing to delay the increase in the data completeness threshold. Under the proposal, the 

50% threshold would apply to the 2018 performance year and not increase to 60% until the 2019 

performance year. Additionally, for the 2018 performance year CMS is proposing that any measures 

that fail data completeness receive only I point instead of 3 points, with the exception of small 

practices, which will continue to receive 3 points. Finally, an improvement in quality performance 

would be incorporated into the scoring in the 2018 performance year. 

Comments: 

AHIP supports these proposed changes. In addition, we continue to encourage CMS to adopt more 

outcome measures, including patient-reported outcomes, and medication adherence measures beyond 

those that are currently included in PQRS, VM and EHR Incentive Program. 
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Cost/Resource Use Performance Category 

Under the 2017 QPP final rule, the Cost performance category counts for 0% of the final score in the 

2017 performance period/20 19 payment year, but will count for 10% in the 2018 performance 

period/2020 payment year and 30% in the 2019 performance period/2021 payment year. For 2017, this 

performance category includes the total per capita costs for all attributed beneficiaries measure, the 

Medicare Spending Per Beneficiary (MSPB) measure, and ten episode-based measures, with no 

incorporation of a performance improvement factor. 

CMS is proposing that the Cost performance category remain at 0% of the final score in the 2018 

performance period/2020 payment year (rather than increase to I 0%) before going up to 30% in the 

2019 performance period/2021 payment year. Additionally, CMS is proposing to keep the total per 

capita costs and MSPB measures but not use the original ten episode-based measures for the 2018 

performance period. CMS instead will work on developing new episode-based measures with clinician 

input for future performance periods. Lastly, CMS is considering including an improvement factor in 

the cost performance category. 

Comments: 

AHIP continues to support the measurement and assessment of clinician performance on Cost I 

resource use and we recommend C"'MS increase weighting and emphasis on performance in this 

category, as we believe that such an emphasis is critical to driving value and affordability of 

healthcare. Requiring the transitioningfrom a weight of 0% to a weight of 30% over the course ofjust 

one year is extreme, would present an additional challenge for physicians, and would help accomplish 

the goal of encouraging providers towards Advanced APMs, where understanding cost and risk is a 

critical component. 

Additionally, AHIP recommends consideration be given to cost measures that go beyond assessing 

whether there is waste in the system, and that seek to promote clinically-appropriate utilization of 

healthcare services, including/or those clinicians who serve a significant portion of the frail and 

elderly population. 

Lastly, we ask CMS to consider episode groupers for chronic conditions that do not have an inpatient 

trigger, so that costs for chronic conditions can be included even if an inpatient stay does not occur 

(i.e., management of diabetes). 
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Improvement Activities Performance Category 

CMS is not proposing changes to the weighting or number of activities required to achieve full credit 

for the Improvement Activities category. However, CMS is proposing to add activities clinicians can 

choose from, including consulting Appropriate Use Criteria (AU C) through a qualified clinical 

decision support mechanism when ordering advanced diagnostic imaging services. 

Comments: 

AHIP continues to support the use of A UC for advanced diagnostic imaging services in the Medicare 

program. We continue to support CMS' intent to establish standards for clinical decision support 

mechanisms (CDSMs) that focus on the functionalities that a qualified CDSM should be able to 

perform, allowing for growth and innovation and promoting choices that fit into physician workflows 

and build on existing CDS infrastructures. 

Advancing Care Information Performance Category 

In the final 2017 QPP rule, the Advancing Care Information performance category counts for 25% of 

the total score. In addition, clinicians are permitted to use either the 2014 or 2015 Certified Electronic 

Health Record Technology (CEHRT) Edition for the 2017 transition year but are required to use 2015 

CEHRTEdition for2018. 

Although CMS is not proposing changes to the weighting of this performance category, they are 

proposing to allow clinicians to use either 2014 or 2015 CEHRT Edition for 2018. Additionally, CMS 

would grant a bonus to clinicians for using 2015 CEHRT Edition. CMS is also proposing to add a 

significant hardship exception for MIPS-eligible clinicians in small practices. 

Comment: 

AHIP supports CMS in its proposal to afford practices additional flexibility in the use of 2014 CEHRT 

given the time and resources required.for practices to upgrade. We also support the additional 

consideration being given to MIPS-eligible clinicians in small practices. 

However, for fUture performance years, CMS should consider increasing the overall weighting and 

strengthening the requirements of this category by emphasizing patient outcomes, patient engagement, 

and care coordination. 
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Finally, we encourage CMS to continue their work with the Office of the National Coordinator for 

Health IT (ONC) on interoperability, with the ultimate goal of requiring all clinicians to use the same 

Edition Health IT Certification Criteria in order to improve interoperability, consistency of reporting, 

and consistency across providers. 

Final Score Bonus for Small Groups 

CMS is proposing to add a bonus of five points to the final score for MIPS eligible clinicians who 

participate in MIPS for the 2018 MIPS performance period and are in small practices or in a virtual 

group or an APM entity with IS or fewer clinicians (the entire virtual group or APM entity combined 

must include IS or fewer clinicians to qualify for the bonus). CMS has indicated that a bonus of 5 

points is appropriate to acknowledge the challenges small practices face in participating in MIPS and 

to help them achieve the performance threshold of IS points for the 2020 MIPS payment year. 

Comments: 

AHIP supports CMS in considering small practices and allowing for a pathway for these practices to 

participate in MIPS. However, offering numerous and overlapping bonuses complicates an already 

complex program and reduces the significance of a bonus. Instead of offering a bonus to incentivize 

participation, the needs of clinicians, particularly those in small practices, are better served by 

technical assistance that promotes movement to value and accountability, as well as thoughiful 

evaluation and adjustment. 

CMS may wish to employ a "small group" performance benchmark for applicable performance 

categories, as an alternative way to provide considerations for small groups, as this will allow for 

points to be awarded based on performance rather than practice characteristics. 

II. Advanced APMs in QPP Year 2 

Clinician Cap for Medical Home Advanced APMs 

Under the CY 2017 final rule, beginning in 2018, the Medical Home Model Advanced APM financial 

risk standard does not apply for APM Entities that are owned and operated by organizations with more 

than 50 eligible clinicians. CMS is proposing to exempt Round I participants in the CPC+ Model from 

the 50-eligible clinician cap since the clinician cap was finalized after CPC+ Round I participants had 

signed agreements with CMS. 
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Comments: 

We understand the need to exempt Round 1 participants in the CPC+ Model from the 50-eligible 

clinician gap, given the timing of the final rule and CPC+ Round 1 participation agreements. 

However, we would also like to reiterate our previous recommendation that CMS use patient panel 

size attributed to the medical home rather than clinician count for the application of these standards. 

While we support flexibility for smaller entities, such an approach will help promote consistency 

between the definitions under MACRA and those used by CMS in determining specific program 

requirements. 

Additionally, we support CMS's proposal that the financial risk standards for Other Payer Medical 

Homes would be identical to and aligned with the Medicaid Medical Home Standard. For example, 

utilizing the suggested alignment, CPC+ organizations would not be limited by their ability to qualifY 

for Advanced APMs based on the size threshold and could be assessed using the Medical Home Model 

Financial Risk Criteria. 

Nominal Financial Risk Amonnt Standard for Other Payers/All Payer Combination Option 

In the CY 2017 MACRA final rule, CMS finalized a nominal financial risk amount standard for Other 

Payers under the All Payer Combination Option as follows: 

Marginal risk of at least 30%; 

Minimum loss rate of no more than 4%; and 

Total risk of at least 3% of the expected expenditures for which the APM Entity is responsible 

CMS is proposing to add the 8% revenue-based standard, which applies to Medicare Advanced APMs 

under the 2017 final rule, as an alternative to the 3% expenditure-based standard. This change would 

align with the nominal amount standard for Medicare Advanced APMs. 

Comments: 

We have previously expressed concern that, contrary to the stated goals of alignment across Advanced 

APMs and Other Payer Advanced APMs, the marginal risk rate and minimum loss rate standards were 

eliminated for Advanced AP Ms yet retained for Other Payer Advanced AP Ms in the MACRA final rule 

for CY 2017. We understand that currently designated Advanced APMs under the Medicare Option 

already meet the marginal risk and minimum loss standards and that CMS intends that all future 

Advanced AP Ms under the Medicare Option meet them as well. We believe it is important for 
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Advanced APMs under the Medicare Option to have the same nomina/financial risk amount standard 

as Advanced APMs under the Other Payer Option to promote consistency, alignment, and a level 

playing field. While we support adding the 8% revenue-based standard as an option for meeting the 

total risk criteria as it is consistent with the standard for Medicare Advanced APMs, there is still a 

discrepancy between the standards, as articulated under MACRA regulation, with the elimination of 

the marginal risk and minimum loss rates for Medicare Advanced AP Ms. We believe that lack of 

alignment between Medicare and other payer requirements in nominal financial risk standards creates 

an unlevel playing field and we strongly encourage CMS to align the nomina/financial risk standards 

for Advanced APMs and Other Payer Advanced APMs. 

Additionally, we continue to believe that there should be a separate pathway to determine whether 

Medicaid AP Ms are Other Payer Advanced AP Ms given states' varying degrees of progress in 

adopting APMs. CMS should provide maximum .flexibility in the design of Medicaid APMs, especially 

for determining financial risk. Medicaid providers typically receive lower reimbursement rates but are 

more likely to treat a higher proportion of high-risk and complex patients, and may not be able or 

prepared to accept the same levels of financial risk for their Medicaid business as other providers. 

QP Determinations for All Payer Combination Option 

Under the CY 2017 MACRA final rule, Qualifying APM participant (QP) determinations under the 

All-Payer Combination Option are made at either the APM Entity or individual eligible clinician level, 

depending on the circumstances. In this proposed rule, CMS is proposing that QP determinations under 

the All-Payer Combination Option would be calculated at the individual eligible clinician level only. 

CMS' rationale is that they are trying to account for the fact that participation in APMs will vary 

across payer and that eligible clinicians in the same APM Entity group would not necessarily have 

agreed to share risk and rewards as an APM Entity group. 

Comments: 

We believe CMS should offer a .flexible approach that allowsfor_QP determinations to be made at the 

group level when the structure of the group aligns for an AdvancedAPM and an Other Payer APM 

We recognize that this approach may not account for the variety of organizational structures that exist 

outside of a group-level structure, hence the need for a flexible approach that can accommodate QP 

determinations at the individual eligible clinician level as well. 
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Determination of Other Payer Advanced APMs 

In the CY 20 17 final rule, CMS laid out a process under which, to be assessed under the All-Payer 

Combination Option, APM Entities or eligible clinicians would have to provide CMS with information 

regarding their payment arrangements with Other Payers, including the amount of revenues for 

services furnished through the arrangement, the total revenues from the Other Payer, the number of 

patients furnished any service through the arrangement, and the total number of patients furnished any 

service through the Other Payer. In addition, the APM Entity or eligible clinician would have to submit 

to CMS an attestation from the Other Payer that the submitted information is correct. 

CMS is proposing that the requirement for attestation from the Other Payer be eliminated. Instead, 

APM Entities or eligible clinicians would need to certify information they submit. In addition, CMS is 

proposing to add a voluntary "payer-initiated" process starting in 2018. Under this option, payers could 

submit payment arrangement information for Medicaid (including both Medicaid fee-for-service and 

health plan arrangements), Medicare health plans (including MA plans, Medicare-Medicaid plans 

[MMPs], cost plans, and Programs of All-Inclusive Care for the Elderly [PACE] plans) and Center for 

Medicare & Medicaid Innovation (CMMI) multi-payer models for CMS to decide on regarding 

whether the arrangements qualify as Other Payer Advanced APMs. For Medicare health plans, CMS is 

proposing that information be submitted during the annual bidding process. Regarding Medicaid, CMS 

is proposing that any state and territory may request that the agency determine whether payment 

arrangements qualify and that the submission window would be between January I and April I of each 

year. This payer-initiated option would be offered to other payer types, including commercial and other 

private payers, starting in 2019 prior to the 2020 All Payer QP Performance Period. 

Comments: 

We support the proposal to add a voluntary "payer-initiated" process, beginning with the 2019 

performance period, and urge CMS to maintain the voluntary nature of this pathway. Additionally, we 

recommend CMS open the payer-initiated process to other payer types, including commercial and 

other private payers, starting in 2018 for the 2019 performance period rather than waiting until 2019 

for the 2020 performance period Since the 5% bonus payment is time-limited to 6 years, delaying the 

ability to count commercial arrangements removes a significant portion of the bonus benefit. A delay 

could also further impede the transition to value-based care for Medicare, unnecessary constraining 

participation and working against CMS' goal to encourage providers to join advance AP Ms. 
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Given that this option will allow certain other payers, including payment arrangements authorized 

under Medicaid, MA, and CMMI multi-payer models, to request that CMS determine whether their 

other payer arrangements are Other Payer Advanced APMs starting prior to the 20/9 All-Payer QP 

Performance Period, it is critical that CM<; develop the submission form and the additional guidance 

CMS intends to offer regarding the payer initiated process and make both available to payers as soon 

as possible with an opportunity and stifficient time for public comment. Moreover, we are concerned 

with CMS 'proposal to wait until the annual bid process and recommend that CMS. should provide for 

a rolling certification process for all payers, so that payers may submit Advanced APM determination 

requests throughout the year prior the performance period and that CMS certifY AP Ms far three years 

if the payer attests that the contract will nat change, given that many AP M contracts are multi-year sa 

as to faster a sustained partnership. 

We would also like to reiterate our concern, originally stated in our 20/6 comment letter, regarding 

the potential scope of the required information, particularly since the proposal contemplates some 

payer competitively-sensitive information being provided by APM entities or eligible clinicians 

(through the eligible clinician initiated process). While we appreciate CMS' intent to avoid 

dissemination of potentially sensitive contractual information and to keep information confidential to 

the extent permitted by federal law, even with such protections, there are still risks of disclosure. As 

such, we recommend that the information required be limited to the minimum data necessary to 

achieve the purpose of assessment. In addition, we strongly recommend that the information be predesignated as falling under Exemption 4 of the Freedom of Information Act and nat be shared with 

ather agencies or used far any purposes ather than the determination of whether a putative QP meets 

the threshold. We also urge CMS to provide assurance that the limited information to be posted an the 

CMS website will nat be expanded without further rulemaking. 

Additionally, we strongly recommend that CM<; permit Medicaid plans to submit arrangements far 

Advanced APM determinations instead of only allowing submission by states. States do nat have the 

capacity to be solely responsible far Advanced AP M submissions to CMS on behalf of Medicaid plans. 

We believe Medicaid managed care plans that are working and contracting with providers are best 

positioned to submit timely and accurate Advanced AP M requests. 

Finally, we urge CMS to allow far flexibility far Medicaid provider Advanced AP Ms. Medicaid 

providers are often already paid in a way that resembles the assumption of risk; as such, requiring 

additional risk or burdensome requirements could reduce the ability to include Medicaid Advanced 

APMs in MACRA. As mentioned previously, CMS should provide maximum flexibility in the design of 
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Medicaid APMs, especially for determining financial risk. We urge CMS to ensure that implementation 

of the Other-Payer Advanced APMs does not adversely impact provider participation in Medicaid, and 

instead promotes participation by creating new incentives and reducing administrative burdens for 

Medicaid-participating providers. 

MA Plans as Advanced APMs under the Medicare Option 

Under the current MACRA rule, MA plans are treated as Other Payers, and payments and patients 

attributable to MA plans cannot be counted toward QP determinations under the Medicare Option. 

Clinicians taking risk in a contract with an MA plan are only eligible to receive credit for their 

participation through the All-Payer Combination Option beginning in payment year 2021. 

In the proposed rule, CMS indicates that the agency is considering and welcomes comments on using 

its waiver and demonstration authorities to allow eligible clinicians to receive credit toward QP 

determinations for their risk-based arrangements with MA plans under the Medicare Option. 

Comments: 

AHIP commends CMS for considering and soliciting ideas on creating a way for individual clinicians 

and clinician groups to receive credit for their financial risk based arrangements with MA plans. 

Value-based contracts between MA plans and providers groups have been found to improve utilization, 

such as increasing office and preventive visits and decreasing emergency department and inpatient 

hospital admissions, while increasing survival rates. 1 Surveys suggest that while the vast majority of 

MA plans have some form of value-based contracts with network providers- ranging from patientcentered medical homes and bundled payments to shared savings/risk and global capitation- there is 

substantial opportunity to expand. 2 A voluntary demonstration under Section I liSA authority testing 

APMs in MA would further encourage providers to move away from volume-based payments towards 

risk-based contracts and help meet CMS' stated goals of moving more providers towards value based 

payment arrangements. We stand ready to work with CMS to develop the details of the demonstration 

model. 

1 Mandai, Aloke K., Tagomori, Gene K., Felix, Randell V., Howell, Scott C. Value~based contracting innovated 

Medicare Advantage healthcare delivery and improved survival. American Journal of Managed Care 23(2): e4l~e49. February 2017. 

2 Deloitte. Unlocking the potential of value-based care in Medicare Advantage. 2016. Available online at: 

https://www2.deloitte.com/us/en/pages/life-sciences-and-heahh-carc/articleslvalue-bascd-care-in-mcdicare-advantage.html 
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We recommend that CMS consider the following guiding principles in designing a voluntary MA 

Advanced AP M incentive demonstration program: 

+ Basic structure. One approach CM<; could take under the demonstration would be to simply treat 

providers that (i) contract with MA plans, and (ii) meet requirements regarding EHR usage, 

quality and financial risk, as participating in Medicare Advanced APMsfor QP determination 

purposes. Thus, for example, payments received from the MA plan, or patients served that were 

enrolled in the MA plan, would be taken into account in determining whether a provider meets the 

25 percent minimum Medicare payment amount threshold or 20 percent minimum Medicare 

patient threshold, respectively. As with the existing Advance APM track, an APM incentive 

payment for these QPs would then be calculated based on the total amount of FFS Medicare 

payments they received. Providers participating in the demonstration would be exempt.from MIPS, 

including both reporting requirements and any payment adjustments. This approach would 

therefore align with existing rules under MACRA that exempt QPs participating in Medicare 

Advanced AP Ms from MIPS. Under this approach, CMS should deem provider contracts with MA 

plans that include reporting under the Star Ratings System to meet the requirement of reporting on 

quality measures comparable to those used under MIPS, given the strong role that the Star Ratings 

program plays in MA. We also recommend that CMS permit flexibility in meeting EHR and 

financial risk requirements, such that alternative criteria may be applied to meet an equivalent 

standard, to continue to promote the type of private sector innovation observed to date. 

+ Infrastructure Support. Another design element that CMS could consider would allow for 

advance payment to providers that do not currently qualifY as QPs. This type of funding 

mechanism would create ready access to the capital providers require to invest in the 

infrastructure (e.g., IT, data analytic, patient engagement) necessary for transitioning to risk 

based payment arrangements. CMS could use the Advanced Payment ACO Model as a guide, 

which makes several types of upfront payments to participating providers as an advance on 

shared savings the organizations are expected to earn under the model. 

+ Budget-neutrality. We understand the importance of developing a demonstration program that 

is designed to either reduce federal spending or remain budget neutral while enhancing 

quality. We recommend that CMS work with AHIP and the industry to consider ways to design 

the program and appropriately consider savings so this goal is achieved. For example: 
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o We believe potential savings need to be considered over the duration of the 

demonstration, rather than on a year-by-year basis, to recognize the time it can take to 

recognize the positive impacts that come from changes in practice patterns, and better 

care coordination and disease management. Under the MA-VBID model,for example, 

participating plans show budget neutrality over the five-year demonstration period of 

performance. 

o CMS could consider reducing the potential costs of the program by making providers 

eligible for a range of bonus payments attributable to participation in an MA Advanced 

AP M rather than a fiat 5% bonus, with the largest payments reserved for providers in 

certain arrangements (e.g., capitation) that may be expected to achieve the greatest 

savings. Even if a provider receives a reduced amount, when it is combined with 

savings from avoiding MIPS reporting requirements, it could help providers adopt 

alternative payment arrangements. 

o In considering potential sources of savings, CMS should consider the impact on the MA 

program, not just the FFS program. By encouraging MA providers to adopt alternative 

payment arrangements, the demonstration can reduce MA plan bids, thereby reducing 

costs to the government. As described above, value-based contracting in MA has been 

found to improve utilization- by increasing low-cost, high-value services like 

preventive visits and reducing high cost services like hospital readmissions- and 

increase survival rates, which over time will/ower MA plans' cost of care. As such, 

increases in value based contracting arrangements should lead to lower MA costs- and 

therefore lower MA bids- than in the absence of the demonstration. Like the evaluation 

approach that CMS is using for the MA-VBID model, CMS could evaluate this 

demonstration for its impact on (a) outcomes, satisfaction, and out-of-pocket costs, (b) 

expenditures for participating health plans, and (c) plan bid~ over time to determine if 

the model results in savings. 

o We also strongly encourage CMS to consider potential savings for the FFS program. 

Research demonstrates that where penetration is strongest, the MA program has had a 

"spillover effect" of decreases in Medicare FFS spending. Researchers have found that 

in counties with high baseline MA penetration rates, each 1 0-percentage point increase 

in MA penetration was associated with a decrease in FFS spending of$154 per patient 
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Page 16 

annually. 3 Therefore, the adoption of alternative payment arrangements in MA by 

providers who might otherwise remain in MIPS could lead to changes in practices of 

care that will result in cost savings in the FFS program. These savings should also be 

factored into the demonstration program. 

+ Development of an Attestation Process. CMS should develop a clinician-initiated attestation 

process that would be limited to collecting minimum, necessary data. Through this attestation 

process, clinicians would indicate the percent of payments, or patients, associated with 

qualifYing MA payment arrangements. Inclusion of an attestation process would not only 

minimize administrative burdens for the agency, plans and providers, but would also help to 

ensure that proprietary or commercially sensitive information is adequately protected. Any 

payer-initiated attestation process would be voluntary. 

+ Preservation of the Non-interference Clause. §1854(a)(6)(B)(iii) of the Social Security Act 

prohibits CMS from inte~fering in the terms and conditions of an MA organization's contracts 

with providers. CMS cannot, under the statute, dictate pricing or contract terms between MA 

plans and their network providers. Moreover, specific information on risk sharing, capitation 

amounts, or shared savings arrangements between MA plans and their network providers is 

likely to be proprietary and commercially sensitive and disclosure of such contract-specific 

details would be anti-competitive. Ther~fore, while we support the goals of the demonstration 

to encourage providers to adopt APMs, it is critical that the demonstration remain voluntary, 

that it not involve the disclosure of competitively sensitive information, and that it otherwise be 

designed in a way to best preserve private sector negotiation and the principles of the noninterference clause. 

AHIP welcomes the opportunity to work with CMS to develop an MA Advanced APM incentive 

demonstration program guided by the principles described above. These principles are critical for 

ensuring that CMS' demonstration program effectively levels the playing field between FFS and MA, 

such that providers have equal incentives to take risk. Such a demonstration would recognize and 

reward the successful, innovative practices that MA plans and providers have already developed to 

better serve their patients, as well as ensure that the MA program continues its progress in delivering 

better care, improved health, and lower costs for Medicare beneficiaries. 

3 Johnson, Garret, Figucro, Jose F., Zhou, Xiner, Orav, E. John, Jha. Ashish K. Recent growth in Medicare Advantage emollment 

associated with decreased fee-for-service spending in certain US counties. Health Affairs 35{9):1707~1715. September 2016. 
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Page 17 

Physician-Focused Payment Models (PFPMs) 

MACRA established the Physician-Focused Payment Technical Advisory Committee (PTAC) to 

assess additional APM proposals submitted by stakeholders and the CY 2017 final rule requires that 

PFPMs include Medicare as a payer. 

In the proposed rule, CMS is seeking comments on broadening the definition ofPFPM to include 

payment arrangements that involve Medicaid or the Children's Health Insurance Program (CHIP) as a 

payer even if Medicare is not included as a payer. CMS' rationale is that a broader definition might be 

more inclusive of potential PFPMs that could focus on areas not generally applicable to the Medicare 

population and could engage more stakeholders in designing PFPMs. 

Comment: 

We support CMS' proposal to broaden the definition of PFPMs and recommend that CMS consider 

including payment models submitted by commercial payers in the PFPM definition. Additionally, 

PTAC may wish to consider payment models for ancillary providers, such as long-term care, durable 

medical equipment, and laboratories. lfCMS chooses to expand the definition of PFPMs and/or the 

types of other provider payment models that can be vetted by PTAC, CMS should ensure that 

committee members have the expertise necessary to properly evaluate and grade such models. 

Thank you for the opportunity to provide these comments. We look forward to continuing to work 

with CMS in the national effort to transition to value-based health care. 

Sincerely, 

Richard A. Bankowitz, MD, MS, MBA, FACP 

Executive Vice President, Clinical Affairs 
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STATEMENT FOR THE RECORD 

SUBMITTED TO THE 

HOUSE ENERGY AND COMMERCE COMMITTEE 

SUBCOMMITTEE ON HEALTH 

"MACRA AND ALTERNATIVE PAYMENT MODELS: DEVELOPING 

OPTIONS FOR VALUE-BASED CARE" 

NOVEMBER 8, 2017 

Submitted By the Health Systems for Stark Reform (HSSR) Coalition 

The HSSR Coalition (the "Coalition") respectfully submits the following statement for 

consideration by the Committee on Energy & Commerce, Subcommittee on Health. Our 

members are health systems on the forefront of new payment models, providing the full 

continuum of care in collaboration with multiple care settings and technology companies. As 

such, they are uniquely positioned to contribute a nuanced perspective on Medicare Access and 

CHIP Reauthorization Act of2015 ("MACRA") and Alternative Payment Models ("APMs"). 

The current members of this coalition are: Adventist Health System, Aurora Health Care, 

Intermountain Healthcare, New York Presbyterian, and UnityPoint Health. We appreciate the 

opportunity to provide these comments to the Committee. 

The transition to value-based care requires new types of partnerships and payment 

arrangements among health industry stakeholders. The Coalition members are more than just 

hospital systems, but instead provide comprehensive care through a network ofhealthcare 

providers including physicians, hospitals, urgent care centers, home health and hospice agencies, 

and skilled nursing facilities. They deliver services to meet the health needs of entire 

communities and regions. The Coalition members can provide insight into operational issues 

and challenges that result from the current fraud and abuse regulatory landscape, specifically the 

Physician Self-Referral Law ("Stark Law"), to the adoption of value-based care models. From 

this unique position, the Coalition members advocate for common sense modernization that will 

advance patient health. 

The Coalition members strongly support the Committee's exploration of opportunities to 

promote value-based care under MACRA and APMs. Since 2015, the Coalition and policy 

experts, including Kevin McAnaney and Troy Barsky have worked together to develop policies 

and draft legislation to modernize the Stark Law. In their current form, this law forms a barrier to 

the nationwide transition to value-based care. 
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To ensure that outdated laws do not stand in the way of innovation, the Coalition 

encourages the Committee to consider the following proposals, to strengthen the potential of 

MACRA and APMs to encourage coordinated care and meaningful collaboration among all 

healthcare entities: 

• Create a Coordinated Network Arrangements exception to the Stark Law. This exception 

would protect all arrangements within a clinically integrated network or value based 

arrangement, such as Bundled Payment Arrangements and Accountable Care 

Organizations, regardless of whether entities are participating in a Medicare value based 

model. 

• Allow HHS to employ waivers of the Stark Law for any arrangement that is "reasonably 

related" to an APM under MACRA. 

• Introduce definitions that would provide clarity to providers on permissible value-based 

care arrangements. 

Reform of the Medicare program and the Stark Law must allow for participation of all 

healthcare entities to coordinate care for patients. MACRA and APMs will only be successful if 

all healthcare entities are able to innovate together to coordinate care for patients. While one 

intent of MACRA was to encourage physicians to move to value based care models, the shift to 

APMs demonstrates that all healthcare entities must work together to provide high quality care to 

patients. And in turn, any waivers or new fraud and abuse exceptions must equally protect all 

entities who are participating in these new value based arrangements. 

The Coalition strongly supports the efforts of the Committee as it explores this very 

important issue and stands ready to provide assistance in any way we can to achieve these 

necessary reforms. 

2 
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American 

~ Hospital 

Association. 

Statement 

of the 

American Hospital Association 

before the 

Subcommittee on Health 

of the 

Committee on Energy and Commerce 

oft he 

U.S. House of Representatives 

November 8, 2017 

Ill) 10th Stree!. NW Two CityCenter, Suite 400 Washington, DC 21Dl1-495E 

1202) mB-1100 Phone 

www.aha.org 

On behalf of our nearly 5,000 member hospitals, health systems and other health care 

organizations, and our clinician partners- including more than 270,000 affiliated physicians, 

2 million nurses and other caregivers- and the 43,000 health care leaders who belong to our 

professional membership groups, the American Hospital Association (AHA) appreciates the 

opportunity to submit comments on the implementation of alternative payment models 

(APMs) in the Medicare Access and CHIP Reauthorization Act (MACRA) of2015. 

Nearly one year into implementation, the MACRA's Quality Payment Program (QPP) 

continues to have a significant impact, not only on physicians and others clinicians, but also 

on the hospitals and health systems with whom they partner to deliver care. There remains 

strong interest from the field in participating in advanced APMs to support new models of 

care, and to qualify for the bonus payment and exemption from the QPP's Merit-based 

Incentive Payment System (MIPS). However, opportunities to access the advanced APM 

track remain significantly constrained. In the calendar year (CY) 2018 QPP final rule, the 

Centers for Medicare & Medicaid Services (CMS) estimates that as few as I 0 percent of 

eligible clinicians will qualify for the advanced APM track in 2018. 

The AHA urges Congress to continue working with CMS to provide greater opportunity to 

participate in advanced APMs. In addition, we urge Congress to consider changes to the 

fraud and abuse laws to allow hospitals and physicians to work together to achieve the 

important goals of new payment models- improving quality, outcomes and efficiency in the 
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delivery of patient care. Finally, opportunities remain to improve fairness and reduce burden 

under the MIPS. 

BROADENING OPPORTUNITIES FOR ADVANCED APM PARTICIPATION 

The AHA supports accelerating the development and use of alternative payment and 

delivery models to reward better, more efficient, coordinated and seamless care for 

patients. Many hospitals, health systems and payers are adopting such initiatives with the goal of 

better aligning provider incentives to achieve the Triple Aim of improving the patient experience 

of care (including quality and satisfaction), improving the health of populations and reducing the 

per capita cost of health care. These initiatives include forming accountable care organizations 

(A COs), bundling services and payments for episodes of care, developing new incentives to 

engage physicians in improving quality and efficiency, and testing payment alternatives for 

vulnerable populations. 

Despite the progress made to date, the field as a whole is still learning how to effectively 

transform care delivery. There have been a limited number of Medicare APMs introduced so far, 

and existing models have not provided participation opportunities evenly across physician 

specialties. Therefore, many physicians likely are exploring APMs for the first time. As a 

general principle, the AHA believes the APM provisions of the MACRA should be 

implemented in a broad manner that provides the greatest opportunity for physicians who 

so choose to become qualifying APM participants. Particularly in the early years ofMACRA 

implementation, the agency should take an expansive approach that encourages and rewards 

physicians who demonstrate movement toward APMs. 

The AHA continues to be concerned that's CMS's regulations only allow participation in 

APMs with downside financial risk to "count" toward the advanced APM track. This 

approach excludes current Medicare APMs with the largest number of participants, 

including Track 1 of the Medicare Shared Savings Program (MSSP). We urge Congress to 

work with CMS to expand its definition of financial risk in the QPP's advanced APM track 

to include the investment risk borne by providers who participate in APMs. 

CMS's narrow definition fails to recognize the significant up-front investment that must be 

made by providers who develop and implement APMs. Providers who participate in APMs 

invest significant time, energy and resources to develop the clinical and operational 

infrastructures necessary to better manage patient care. For example, an AHA analysis estimated 

start-up costs of $11.6 million for a small ACO and $26.1 million for a medium ACO. 

We appreciate that CMS has offered the Track 1+ MSSP model in an attempt to create a 

glide path to assuming downside risk. Nevertheless, clinicians participating in shared 

savings-only models are working hard to transform care delivery; under CMS's policy, 

their significant investments and efforts will not be sufficiently recognized. Regardless of 

whether an APM entails downside risk, providers must acquire and deploy infrastructure and 

enhance their knowledge base in areas, such as data analytics, care management and care 

redesign. Further, one metric for APM success- meeting financial targets- may require 

providers to reduce utilization of certain services, such as emergency department visits and 

2 
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hospitalizations through earlier interventions and supportive services to meet patient needs. 

However, this reduced utilization may result in lower revenues. Providers participating in APMs 

accept the risk that they will invest resources to build infrastructure and potentially see reduced 

revenues from decreased utilization, in exchange for the potential reward of providing care that 

better meets the needs of their patients and communities and generates shared savings. This risk 

is the same even in those models that do not require the provider to repay Medicare if actual 

spending exceeds projected spending. 

In addition, restricting the advanced APM track to models with downside risk may inhibit 

the movement toward APMs, especially among early APM adopters. If clinicians cannot 

engage with existing model participants- which have a head start on building infrastructure and 

engaging in care redesign- they instead must start from scratch. While we acknowledge CMS's 

interest in encouraging providers to move toward accepting increased risk, such an interest must 

be balanced with the reality that providers are starting at different points and will have different 

learning curves. CMS should define financial risk in a way that provides a path for physicians 

who are interested in participating in risk-bearing models- particularly those who are exploring 

such models for the first time- rather than serving as a barrier to entry. 

LEGAL IMPEDIMENTS TO IMPLEMENTATION OF NEW PAYMENT MODELS 

By tying a portion of most physicians' Medicare payments to performance on specified metrics 

and encouraging physician participation in APMs, MACRA marks another step in the health care 

field's movement to a value-based paradigm from a volume-based approach. To achieve the 

efficiencies and care improvement goals of the new payment models, hospitals, physicians and 

other health care providers must break out of the silos of the past and work as teams. Of 

increasing importance is the ability to align performance objectives and financial incentives 

among providers across the care continuum. 

Outdated fraud and abuse laws, however, are standing in the way of achieving the goals of the 

new payment systems, specifically, the physician self-referral (Stark) law and anti-kickback 

statute. These statutes and their complex regulatory framework are designed to keep hospitals 

and physicians apart- the antithesis of the new value-based delivery system models. A 2016 

AHA report, Legal (Fraud and Abuse) Barriers to Care Transformation and How to Address 

Them (Wayne's World), examines the types of collaborative arrangements between hospital and 

physicians that are being impeded by these laws and recommends specific legislative changes. 

Congress should create a clear and comprehensive safe harbor under the anti-kickback law 

for arrangements designed to foster collaboration in the delivery of health care and 

incentivize and reward efficiencies and improvement in care. Arrangements protected 

under the safe harbor would be protected from financial penalties under the anti- kickback 

civil monetary penalty law. In addition, the Stark Law should be reformed to focus 

exclusively on ownership arrangements. Compensation arrangements should be subject to 

oversight solely under the anti-kickback Law. 

3 
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MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS) 

As the MIPS is the QPP track in which the vast majority of clinicians will participate, the AHA 

believes it is vitally important that CMS implement the MIPS in a way that measures providers 

accurately and fairly; minimizes unnecessary data collection and reporting burden; focuses on 

high-priority quality issues; and fosters collaboration across the silos of the health care delivery 

system. To achieve this desired state, we have recommended that CMS prioritize the following 

MIPS policy approaches: 

• Adopt gradual, flexible increases in reporting requirements in the initial years of the 

program to allow the field sufficient time to adapt; 

• Streamline and focus the MIPS quality and cost measures to reflect the measures that 

matter the most to improving outcomes; 

• Allow facility-based clinicians the option to use their facility's CMS quality reporting 

and pay-for-performance results in the MIPS; 

Employ risk adjustment rigorously- including sociodemographic adjustment, where 

appropriate to ensure providers do not perform poorly in the MIPS simply because 

of the patient mix and communities they serve; and 

• Align the requirements for eligible clinicians in the advancing care information (ACI) 

performance category with the requirements for eligible hospitals and critical access 

hospitals (CAHs) in the Medicare and Medicaid Electronic Health Record (EHR) 

Incentive Programs. 

CMS has made progress in addressing several of the above priorities. For example, in the 

first two MIPS performance years (CY s 2017 and 20 18), CMS has used an incremental approach 

to increasing MIPS data reporting requirements, and reduced the number of required quality 

measures from the previous Physician Quality Reporting System. In addition, the AHA 

applauds CMS for responding to our long-standing request to develop a facility-based 

measurement option for the MIPS that will be available in 2019. While we believe it could 

be adopted sooner, the option ultimately will help clinicians and hospitals alike spent less 

time collecting data, and more time improving care. Congress can help make the reporting 

option even more effective by encouraging CMS to consider future expansion of the option to a 

broader array of facility types, such as post-acute care providers. 

Furthermore, Congress should encourage CMS to continue refining its approach to 

accounting for both clinical and sociodemographic factors in measuring performance 

outcomes. CMS took an important step toward recognizing the impact of sociodemographic and 

other risk factors on outcomes by adopting a "complex patient bonus" in the MIPS in 2018. 

Clinicians receive up to five bonus points on their MIPS Final Scores based on a Medicare 

claims-derived proxy for patient complexity (Hierarchical Condition Categories, or HCCs), and 

well as the number of patients dually eligible for Medicare and Medicaid that a clinician or group 

treats. Dual-eligible status is a proxy for sociodemographic factors. 

4 
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However, experience from the use of HCC scores in the value-based payment modifier (VM) 

raises significant questions about its adequacy in accounting for patient risk. CMS used HCC 

scores to provide modest increases to performance scores to groups treating significant numbers 

of high-risk patients. Unfortunately, the results of the 2016 VM program show that group 

practices caring for patients with more clinical risk factors were still significantly more likely to 

receive negative VM adjustments. Furthermore, while dual-eligibility is an established proxy for 

sociodemographic status, there are others- such as income and education that may be more 

accurate adjusters for particular measures. We urge that the patient complexity bonus be viewed 

as an interim step while more sophisticated adjustment approaches are developed. 

CONCLUSION 

Thank you for the opportunity to share our views on the implementation of advanced APMs in 

MACRA's QPP. The AHA looks forward to working with Congress, CMS and all other 

stakeholders to ensure MACRA enhances the ability of hospitals and physicians to deliver 

quality care to patients and communities. 

5 
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AAN P I ArncrkanAssociation of 

NURSE PRACTITIONERS'" 

November 7, 2017 

The Honorable Michael Burgess 

Chairman 

Committee on Energy and Commerce 

Subcommittee on Health 

2336 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Chairman and Ranking Member: 

1he ~'oice o 'the l\'urse Practitioner 

The Honorable Gene Green 

Ranking Member 

Committee on Energy and Commerce 

Subcommittee on Health 

2470 Rayburn House Office Building 

Washington, D.C. 20515 

The American Association ofNurse Practitioners (AANP), representing more than 234,000 

nurse practitioners (NPs) in the United States, would like to offer the following information for 

the record regarding the MACRA and Alterative Payment Models: Developing Options for ValueBased Care hearing the Subcommittee is holding on Wednesday, November 8, 2017. 

NPs are advanced practice registered nurses who are prepared at the masters or doctoral level to 

provide primary, acute, chronic and specialty care to patients of all ages and walks of life. Daily 

practice includes: assessment; ordering, performing, supervising and interpreting diagnostic and 

laboratory tests; making diagnoses; initiating and managing treatment including prescribing 

medication and non-pharmacologic treatments; coordinating care; counseling; and educating 

patients and their families and communities. NPs practice in nearly every health care setting 

including clinics, hospitals, Veterans Affairs and Indian Health Care facilities, emergency rooms, 

urgent care sites, private physician or NP practices (both managed and owned by NPs), nursing 

homes, schools, colleges, retail clinics, public health departments, nurse managed clinics, 

homeless clinics, and home health. NPs hold prescriptive authority in aU 50 states and the 

District of Columbia. It is important to note that 89.2% ofNPs are certified in primary care, the 

majority of whom see Medicare and Medicaid patients. NPs complete more than one billion 

patient visits annually. 

As the Committee continues to explore the implementation ofMACRA and alternative payment 

models (APMs), we urge you to include the perspective of nurse practitioners in these 

discussions. As you know NPs have long been Medicare Part B providers, are recognized ACO 

providers, and were included as providers in the MACRA legislation previously passed by this 

committee. They arc recognized in the final rule as eligible clinicians under the Merit-based 

Incentive Payment System and as participants in APMs, with one exception, as discussed below. 

We understand that this transition is an ongoing process, however, as this significant change 

from volume to value-based care continues, it is essential that all providers be included in the 

development of patient payment models so that all patients receive high quality healthcare from 

the Medicare provider of their choice. 

Administration: PO Box 12846 • Austin, TX 78711 • Email: admin@aanp.org • Website: aanp.org 

Government Affairs: 225 Reinekers Lane, Suite 525 • Alexandria, VA 22314 • Email: governmentaffairs@aanp.org 
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Of particular interest to NPs is full participation in the Medicare Shared Savings ACO Program. 

Under current law, NPs can join the Shared Savings ACO, but their patients only count toward 

the shared savings if they see a physician for one visit a year. While this restriction does not 

prevent individual nurse practitioners from joining the ACO, it does prevent their patients from 

being assigned to the Medicare Shared Saving ACO and attainment of any benefits that result 

from such participation. We urge the Committee to examine H.R. 1160, the ACO Assignment 

Improvement Act of 2017, to allow the assignment ofNP patients under the Medicare Shared 

Savings Program. As the transition to value-based care moves forward and more nurse 

practitioners provide primary care services to Medicare patients, this burden will continue to act 

as a barrier to patient and NP participation in Shared Savings A COs. 

As we have previously stated, AANP would like to serve as a resource and participate in these 

discussions, including those with the Physician Technical Advisory Committee (PTAC), as the 

Committee continues its examination of these important issues. We are actively engaging with 

our membership to solicit feedback on new payment models, which will be helpful as this 

process moves forward. Please contact the MaryAnne Sapio, V.P. Federal Government Affairs, 

governmentaffairs@aanp.org, 703-740-2529 should you or your staff require any additional 

information. 

Sincerely, 

David Hebert 

Chief Executive Officer 
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The Society of Thoracic Surgeons 

Statement to the House Energy and Commerce Committee 

Health Subcommittee Hearing 

November 8, 2017 

MACRA and Alternative Payment Models: Developing Options for Value-Based Care 
194 


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House E&C Health Subcommittee 

2 

The Society of Thoracic Surgeons (STS) appreciates the opportunity to submit a statement for the record 

for the House Energy and Commerce Health Subcommittee hearing on "MACRA and Alternative 

Payment Models: Developing Options for Value-Based Care." Founded in 1964, The Society of Thoracic 

Surgeons is a not-for-profit organization representing more than 7,500 surgeons, researchers, and allied 

health care professionals worldwide who are dedicated to ensuring the best possible outcomes for 

surgeries of the heart, lung, and esophagus, as well as other surgical procedures within the chest. The 

mission of the Society is to enhance the ability of cardiothoracic surgeons to provide the highest quality 

patient care through education, research, and advocacy. 

In passing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Congress sent a clear 

signal to the medical community that the health care system should transition from a fee-for-setvice, 

volume-based payment model to one that incentivizes care quality. STS was pleased with this 

development because we have been pioneers in quality measurement and improvement over the past 

quarter-century. As Congress is aware, many of the alternative payment models (APMs) introduced to 

date have focused on primary care. We hoped that MACRA would finally provide the pathway to help us 

to develop a specialty-specific APM that took advantage of the wealth of quality information being 

collected in the STS National Database. We remain excited at the opportunity to bring value-based 

payment into cardiothoracic surgery. Below we discuss the many ways in which The Society of Thoracic 

Surgeons is attempting to bring this to fruition. 

The STS National Database was established in 1989 as an initiative for quality assessment, improvement, 

and patient safety among cardiothoracic surgeons. The Database has three components-Adult Cardiac 

Surgery, General Thoracic Surgery, and Congenital Heart Surgery. The fundamental principle underlying 

the STS National Database initiative has been that surgeon engagement in the process of collecting 

information on every case, combined with robust risk adjustment based on pooled national data, and 

feedback of the risk-adjusted data provided to the individual practice and the institution, will provide 

the most powerful mechanism to change and improve the practice of cardiothoracic surgery for the 

benefit of patients. The Adult Cardiac Surgery Database has 90 to 95 percent penetration across all the 

cardiothoracic surgery practices in the country. 

On December 10, 2013, STS held a policy planning meeting with members of STS leadership to discuss 

and identify key features to include in any cardiothoracic surgery APM model. Over the course of the 

past few years, STS has designed a quality-based payment program specifically related to cardiothoracic 

diseases (including coronary artery bypass grafting (CABG), valve repair and replacement procedures, 

and treatments for lung cancer) that relies on the robust data in the STS National Database as the 

foundation for quality measurement and improvement. The STS APM Whitepaper, included as an 

addendum to this statement, provides a high-level summary and framework for the heart team and lung 

cancer care team APM. 

The STS APM Whitepaper presents CMS with an opportunity to identify and reward for value in 

healthcare. What the Whitepaper lacks is the infrastructure for that value-based payment. While we 

have had the opportunity to interact with 2 bundled/episode payment programs in the last year that 

offered acceptable infrastructure: the CABG Episode Payment Model (EPM) bundle and the 

ACS/Brandeis bundle, realistically for cardiothoracic episodes, both of these models failed to adequately 

incorporate the advanced quality measurement and improvement mechanisms developed by STS via the 

robust data available in our National Database. Basically, we have two puzzle pieces that fit together 

perfectly to make exactly the picture that CMS and Congress are looking for- a win on a specialtyspecific APM in one of the largest cost centers in the Medicare program. 
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House E&C Health Subcommittee 

3 

STS firmly believes that APMs should be developed in partnership with the clinical community and 

provide added incentives to clinicians to provide quality and cost-efficient care. However, in December 

2016, the Center for Medicare and Medicaid Innovation (CMMI) and the Centers for Medicare and 

Medicaid Services (CMS) finalized plans to implement a Coronary Artery Bypass Graft (CABG) Model in 

the Advancing Care Coordination through Episode Payment Models (EPMs). Unfortunately, the CABG 

EPM was significantly flawed because it required that only two quality measures be used: all-cause 

mortality and a patient satisfaction survey. STS argued that CMS should use the STS CABG Composite 

Score, a f1ve-part composite quality measure that has been endorsed by the National Quality Forum and 

includes all-cause mortality as a quality measure, specifically because the mortality rate for CABG is 

approximately 2%. This means that under the proposed CABG EPM, CMS would not have been able to 

differentiate among 98% of providers in the model. Using the STS CABG Composite, CMS would be using 

the same quality metrics that STS has used, alone and in partnership with Consumer Reports, to publicly 

report on hospitals' complete CABG performance. [See STS Public Reporting: 

http://publicreporting.sts.org/]. 

In late 2016, the American College of Surgeons and Brandeis University submitted a proposed physicianfocused payment model (PFPM) to the PFPM Technical Advisory Committee (PTAC) for review. The 

model focused on procedure episodes and called for each qualified participant within an APM to assume 

risk in the episode(s) for which he/she provides care. Although PTAC approved the ACS/Brandeis model 

for limited testing by CMMI, the panel noted concerns with how the proposal fulfilled the "value over 

volume" criterion. It should be noted that where PTAC identified concerns with the ACS/Brandeis 

proposal, the STS APM Whitepaper offers solutions. The STS APM Whitepaper is a quality-based 

payment methodology that lacks a payment infrastructure. The ACS/Brandeis model is a payment 

infrastructure that can be enhanced by the quality-based measurement components provided by STS. 

Policy-makers and thought leaders have largely indicated that bundled payments for episodes of care 

are a central tenet of alternative payment. At this stage, we feel the best opportunity for success is to 

identify a way to incorporate the STS quality data into the episode of care that CMS has already 

identified for the CABG EPM or the episodes of care being developed for limited testing through the 

ACS/Brandeis APM proposal. Rather than starting from scratch, we can build on gains made by CMMI 

with the EPM and by ACS/Brandeis with their PFPM proposal. Further, our quality-based payment 

methodology addresses critical gaps in all the models that have been proposed thus far- we have a 

validated and meaningful way to measure quality and we know how to tie it to payment. 

Additionally, we believe that there is a role for other stakeholders in the APM-development process. For 

example, as we incentivize physicians to improve efficiency in the health care system, we run the risk of 

squeezing out innovations that, while costly at their inception, provide dividends over time. We are 

beginning to think about the concept of "risk" in a payment model to include the concept of medical 

innovation and the role that industry may play in support of evidence-based quality improvement. 

We are actively pursuing all possible partnerships and look forward to working with Congress, CMS, and 

CMMI to bring to fruition a payment model that could provide quality incentives and efficiencies to one 

of the largest cost centers in the Medicare program. We hope to serve as an example for all of medicine. 

We are eager to be an active partner in the effort to drive medicine to value-based payment and we are 

more than willing to go first. 
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MOS 

AMERICAN ACADEMY OF 

0RTHOJ>Al!DIC SURGEONS 

AMERICAN ASSOCIATION OP 

0RTH0l'Al'.])JC SURGEONS 

Statement for the Record 

House Energy and Commerce Hearing 

MACRA and Alternative Payment Models: Developing Options for Value-based Care 

Wednesday, November 8, 2017 

On behalf of over 18,000 board-certified orthopaedic surgeons, the American Association of 

Orthopaedic Surgeons (AAOS) would like to commend Chairman Michael Burgess and Ranking 

Member Gene Greene for holding the Energy and Commerce Subcommittee on Health hearing, 

"MACRA and Alternative Payment Models: Developing Options for Value-based Care," The 

AAOS appreciates your willingness to look critically at alternative payment models (APMs), 

As you know, AAOS and the entire physician community worked closely with Congress on 

drafting and implementing the Medicare Access and CHIP Reauthorization Act (MACRA) of 

2015. In addition to repealing the flawed Sustainable Growth Rate (SGR) formula, this 

legislation offered a number of ways to improve the previous reimbursement and reporting 

frameworks, such as streamlining requirements and lowering penalties, reducing administrative 

burdens, and increasing flexibility and support for small and solo practices. We have continued 

to work with members of Congress and the Centers for Medicare & Medicaid Services (CMS) as 

the rules for years one and two of this new framework are finalized, and we remain committed to 

ensuring the legislation is improved over time. Certainly, opportunities to examine and refine the 

MACRA framework- such as that provided by today~s hearing- will ensure the legislation 

improves delivery of care for Medicare patients across the country. 

In addition to the Merit-Based Incentive Payment System (MIPS) program, the second track or 

MACRA provides bonus payments for physicians who participate in alternative payment models 

(APMs) that hold providers financially accountable for health care costs, Eligible APM 

participants must tie payments to specified quality measures, use certified electronic health 

record (EHR) technology, and assume more than nominal financial risk. Further, certain APMs 

enable physicians to qualify for a five percent bonus payment as "Advanced APMs" while other 

APMs may improve physicians' MIPS scores as "MIPS APMs," 

The AAOS strongly supports efforts by CMS to make appropriately structured APMs available 

to physicians and other providers, including bundled and episode~of~care payment models. We 

have supported previous efforts by CMS through the Center for Medicare and Medicaid 

Innovation (CMMI) to develop bundled payment models in the area of musculoskeletal care. 

One such initiative, the Bundled Payments for Care Improvement (BPCl) program, addresses 

episode-based payment approaches to delivering care to beneficiaries with multiple types of 

clinical episodes, including musculoskeletal conditions. AAOS believes that properly 
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constructed APMs have the potential to generate savings for Medicare while having positive 

effects on patient care. In fact, many AAOS members have been leaders in developing, 

implementing, and evaluating episode-of-care payments under the ACE Demonstration Project 

and the BPCI. 

However, the revenue and patient thresholds for eligible clinicians to become qualifying 

providers (QPs) under MACRA is quite onerous for specialty physicians. Finalized rules require 

that in 2019,25 percent of Medicare payments and 20 percent of patients are qualifying 

thresholds to receive the increased APM bonus. These patient count and payment thresholds are 

very high for specialty physicians and most of them are likely to not qualizy on these levels. 

Moreover, attempts to meet these thresholds may magnify sub-specialization and incentivize 

procedure-focused practice. While there are some exceptions on threshold requirements for 

specialists who participate in multiple APMs, AAOS would like to note that these requirements 

are restrictive. 

It is heartening to note that MIPS APMs will have their resource use component weight reduced 

to zero with the I 0 percent reassigned to increase weights for CPIA and ACI thereby creating a 

pathway of qualification from MIPS APMs to Advanced APMs. Nevertheless, in the spirit of the 

MACRA legislation, the AAOS has consistently requested reductions in unnecessary and 

burdensome requirements to qualify for Advanced APMs that cause resources to be spent on 

administrative costs rather than patient care. At present, there are no Advanced APMs available 

for orthopaedic surgeons to embrace, and to date there is no clear guidance whether or not CJR 

will be considered an Advanced APM. We have also requested for a clear pathway for rapid 

approval and implementation of physician-directed APMs. 

Additionally, the AAOS has noted that APMs (including BPCI and the Comprehensive Care for 

Joint Replacement model) that require coordinated care across settings reveal limitations in the 

current Stark Law. The Stark Law is structured to control the volume of referred services, and it 

a strict liability statute that leads to heavy penalties to unintentional and technical errors by 

physicians and their staff. Liability statutes, like the Stark Law, do not encourage physicians to 

participate in coordinated care models as the costs of compliance and disclosures required can be 

prohibitive for small and medium-sized physician practices. 

Physician referrals in Accountable Care Organizations (A COs) are theoretically exempt from the 

Stark Law requirements through fraud and abuse waivers. The AAOS believes there should be 

similar exceptions and protections for physicians and physician groups participating in APMs, 

and strongly encourages Congress to protect in-office ancillary services exception. 

Finally, the AAOS encourages the Committee to consider the ways in which qualified clinical 

data registries (QCDRs) can play a critical role in improving quality and patient care within 

APMs. Under Section 105(b) ofMACRA, Congress directed CMS to provide QCDRs access to 

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real-time Medicare claims data for purposes of linking such data with "with clinical outcomes 

data and [perform] risk-adjusted, scientifically valid analyses and research to support quality 

improvement or patient safety." Increased participation in APMs can be encouraged by 

providing QCDRs timely access to this data to perform validation and analysis. The data QCDRs 

collect provides a wealth of clinical information for measure developers and, absent full 

implementation of this provision ofMACRA, represents an underutilized resource. All 

participants should also be allowed to submit advanced APMs' quality data through a QCDR, as 

is the case for MIPS and some current APMs. Having an incentive bonus for participation in a 

QCDR for those qualifying APM participants would also encourage these QPs to contribute to 

this valuable reservoir of clinical data. 

Thank you again for holding this important hearing on Medicare's payment systems and 

programs. The AAOS is committed to continue working with Congress and the Administration 

to ensure that patients have access to the highest quality musculoskeletal care. Please contact 

Catherine Boudreaux, Senior Manager of Government Relation (boudreaux@aaos.org) if you 

have any questions or if the AAOS can serve as a resource to you. 

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