Medicare Value-Based Payment Models: Participation Challenges and Available Assistance for Small and Rural Practices
Published: 2016-12-09T00:00:00

Fast Facts:
Medicare is trying to save money and improve health care quality by using value-based payment models, which encourage doctors to do things like use electronic health records to better track and evaluate patient care.
But are small and rural physician practices prepared for such a transition?
We found, for example, that some of these practices have small budgets, making it harder for them to invest in the training and technology they need to participate. We also found that not all of these practices have access to organizations that can help them share staff and IT systems.

Highlights:
section_title: What GAO Found
paragraphs: Based on a review of literature and interviews with 38 stakeholders, GAO identified challenges faced by small and rural physician practices when participating in Medicare's new payment models. These models, known as value-based payment models, are intended to reward health care providers for resource use and quality, rather than volume, of services. The challenges identified are in five key topic areas.

section_title: Letter
paragraphs: In 2015, Medicare expenditures for services provided by physicians  totaled approximately $70 billion, which represented about 11 percent of  all Medicare expenditures in that year. Under traditional Medicare,  physicians and other providers have historically been paid on a fee-for- service basis, which means that each distinct service is generally paid for  separately. We have reported that this system of payment largely rewards  the volume and complexity of health care services provided to  beneficiaries, rather than the value of those services.
In recent years, the Centers for Medicare & Medicaid Services (CMS) has  used its authority to develop and implement several new payment  models—referred to in this report as value-based payment models— which focus on physicians (and other providers) sharing in the financial  risk of caring for beneficiaries. Value-based payment models generally  include what is known as “upside risk,” where physicians receive  additional payments for providing high-value care that is based on certain  quality and efficiency metrics. Some models also include what is known  as “downside risk,” where physicians may be financially penalized for  increased expenditures and care that does not meet quality and efficiency  standards. CMS has been trying to encourage physicians to participate in  models with both upside and downside risk by including larger financial  incentives for positive results in those models than it does in models with  upside risk only. In accordance with the Medicare Access and CHIP  Reauthorization Act of 2015 (MACRA), beginning in 2017 CMS will  implement the Quality Payment Program, which will include the Merit- based Incentive Payment System (MIPS) for physicians and other  providers, as well as incentives for participation in certain alternative  payment models. MIPS will consolidate components of programs  currently used to tie payments to quality and provide incentives for  quality, resource use, clinical practice improvement activities, and  advancing care information through the meaningful use of electronic  health record (EHR) technology.
Many small practices lack experience with value-based payment models  and their requirements, such as performance reporting, and rural  practices may face unique challenges when participating in a value-based  payment model due, in part, to the geographic dispersion of their  patients. Some organizations provide services meant to help physician  practices participate in value-based payment models. However, some  stakeholders believe these services are insufficient and at least one  organization has requested that Congress and CMS allow organizations  to have more flexibility working with CMS to support small and rural  practices’ transition to value-based payment models.
MACRA includes a provision for GAO to examine the organizations that  can assist small physician practices with participation in value-based  payment models. This report describes  1.  stakeholders’ perspectives on the challenges faced by small and rural  physician practices when trying to participate in Medicare value-based  payment models, and  2.  the types of organizations that help small and rural physician practices  participate in Medicare value-based payment models, and the  activities they conduct.
To describe stakeholders’ perspectives on the challenges faced by small  and rural physician practices, we reviewed relevant literature and  interviewed stakeholders. We identified the literature through a search of  several databases using terms such as “Medicare,” “small or rural  physician practices”, and “value-based payments,” as well as through  recommendations from stakeholders we interviewed. In total, we  identified and reviewed 47 documents published between 2012 and 2016 that met our search criteria and that we deemed to be relevant to our  work. We identified stakeholders to interview by conducting internet  searches on organizations that assist small and rural practices with value- based payment model participation and through referrals from other  stakeholders we interviewed—an iterative process often referred to as  “snowball sampling.” We selected and interviewed 38 stakeholders, which  included small and rural physician practices; associations that represent  physician practices, including small and rural providers; organizations that  assist physician practices with participation in value-based payment  models; associations that represent these organizations; and CMS  officials. We analyzed information that we collected from the literature and  stakeholders to identify a list of challenges, by key topic areas, that small  and rural physician practices face when participating in Medicare value- based payment models, such as accountable care organizations (ACO).  Although the challenges we identified may not all be unique to small and  rural practices, in this report, we indicate how the challenge affects small  and rural practices in particular.
To describe the types of organizations that help small and rural physician  practices participate in value-based payment models, and the activities  they conduct, we interviewed the same 38 stakeholders described above,  as well as reviewed documentation from CMS and organizations that  assist practices with participation. Of the 38 stakeholders, 16 were  organizations that assisted physician practices with value-based payment  model participation; the other 22 stakeholders included physician  practices that have experience with these organizations and practices  and associations that are knowledgeable about the types of organizations  available and the services that they can provide. We compared the  information collected with the list of challenges we identified for small and  rural physician practices to assess the extent to which the organizations  identified could help the practices participate in value-based payment  models.
The 38 stakeholders we interviewed are a nonprobability sample. Our  findings from these interviews are not generalizable beyond the  stakeholders we interviewed; however, they can provide insights into the  challenges faced by small and rural practices when deciding whether to  participate or when participating in value-based payment models.
Similarly, our analysis identified many types of organizations that can  assist small and rural practices with value-based payment models, but the  information we present is limited to our sample and therefore may not  represent the universe of organizations that assist small and rural  practices.
We conducted this performance audit from November 2015 to December  2016 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Transition to Value-based Payment
paragraphs: According to CMS documentation, the transition to value-based payment  generally involves two major shifts from traditional fee-for-service  payment.  1.  Accountability for both quality and efficiency. Value-based  payment models link payments to providers to the results of health  care quality and efficiency measures. CMS uses a variety of  measures to assess health care quality and efficiency and to hold  physicians and other providers accountable for the health care they  deliver. Quality measures include process and outcome measures.  Process measures assess the extent to which providers effectively  implement clinical practices (or treatments) that have been shown to  result in high-quality or efficient care. Examples of process measures  are those that measure care coordination, such as the percentage of  patients with major depressive disorder whose medical records show  that their physician is communicating with the patients’ other  physicians who are treating comorbid conditions. Outcome measures  track results of health care, such as mortality, infections, and patients’  experiences of that care. Efficiency measures may vary across  models. For example, models may require that a minimum savings  rate be achieved, which is established using a benchmark based on  fee-for-service claims as well as other information such as patient  characteristics, or that cost targets are achieved for various episodes  of care.  2.  Focus on population health management. Value-based payment  models encourage physicians to focus on the overall health and well- being of their patients. Population health management includes  provider activities such as coordination of patient care with other  providers; identification and provision of care management strategies  for patients at greatest risk, such as those with chronic conditions;  promotion of health and wellness; tracking patient experience; and  using health information technology (IT) to support population health.
In value-based payment models, physicians and other providers are paid  and responsible for the care of a beneficiary for a long period and  accountable for the quality and efficiency of the care provided. In contrast,  Medicare fee-for-service payments to providers are tied only to volume,  rewarding providers, for example, on the basis of the number of tests run,  patients seen, or procedures performed, regardless of whether these  services helped (or harmed) the patient.
This shift in care delivery can require substantial investments by  providers. For example, providers may need to invest in health IT to  manage patients and record data necessary for quality and efficiency  measurement and reporting. Providers may also need to hire additional  staff to assist with population health management activities, such as care  coordination.
The CMS Innovation Center has developed and is testing a number of  value-based payment models. The following are examples of Medicare  value-based payment models in which physician practices can  participate. These models are often referred to as alternative payment  models.
ACOs. As noted earlier, ACOs are groups of physicians—including  independent physician practices—hospitals, and other health care  providers who voluntarily work together to give coordinated care to the  Medicare patients they serve. When an ACO succeeds in delivering  high-quality care and spending health care dollars more efficiently,  part of the savings generated goes to the ACO and part is kept by  Medicare. ACOs participate in models with upside risk only or models  with both upside and downside risk.
Bundled payment models. Bundled payment models provide a  “bundled” payment intended to cover the multiple services  beneficiaries receive during an episode of care for certain health  conditions, such as cardiac arrhythmia, hip fracture, and stroke. If  providers are able to treat patients with these conditions for less than  the target bundled payment amount and can meet performance  accountability standards, they can share in the resulting savings with  Medicare. CMS’s initiative, Bundled Payments for Care Improvement  (BPCI), tests four broadly defined models of care, under which  organizations enter into payment arrangements that include financial  and performance accountability for episodes of care.
Comprehensive primary care models. Comprehensive primary care  models are designed to strengthen primary care. CMS has  collaborated with commercial and state health insurance plans to form  the Comprehensive Primary Care (CPC) initiative. The CPC  initiative provides participating primary care physician practices two  forms of financial support: (1) a monthly non-visit-based care  management payment and (2) the opportunity to share in any net  savings to the Medicare program. In January 2017, CMS will build  upon the CPC initiative, which ends December 31, 2016, by beginning  CPC Plus, a comprehensive primary care model that includes  downside risk.
section_title: CMS’s Quality Payment Program and Support for Small and Rural Practices
paragraphs: In November 2016, CMS published a final rule with comment period to  implement a Quality Payment Program under MACRA, which established  a new payment framework to encourage efficiency in the provision of  health care and to reward health care providers for higher-quality care  instead of a higher volume of care. The Quality Payment Program is  based on eligible Medicare providers’ participation in one of two payment  methods: (1) MIPS or (2) an advanced alternative payment model. Under  MIPS, providers will be assigned a final score based on four performance  categories: quality, cost, clinical practice improvement activities, and  advancing care information through the meaningful use of EHR  technology. This final score may be used to adjust providers’ Medicare  payments positively or negatively. CMS will begin assessing providers’  performance in three of the four performance categories in 2017. Cost will  not be measured in the first year. The first year that payments will be  adjusted is 2019 (based on the 2017 performance year). Under the final  rule, an alternative payment model will qualify as an advanced alternative  payment model if it has downside risk, among other requirements.  Providers with sufficient participation in advanced alternative payment  models are excluded from MIPS and qualify to receive incentive  payments beginning in 2019 (based on performance in 2017). Providers  who participate in alternative payment models that do not include  downside risk, such as some ACO models, will be included in MIPS. The  final rule refers to these models as MIPS “alternative payment models.”  To coincide with the final rule, CMS also issued a fact sheet with  information on the supports available to providers participating in the  Quality Payment Program.
In the final rule, CMS stated that protection of small, independent  practices was an important thematic objective and that in performance  year 2017 many small practices will be excluded from the new MIPS  requirements due to the low-volume threshold. CMS also stated that  while it is not implementing “virtual groups” for 2017—which would allow  small practices to be assessed as a group across the four MIPS  performance categories—the agency looks forward to stakeholder  engagement on how to structure and implement virtual groups in future  years of the program. Further, CMS is reducing the number of clinical  practice improvement activities that small and rural practices will have to  conduct to receive full credit in this performance category in performance  year 2017.
CMS also announced in April 2016 that it intends to solicit and award  multiple contracts to qualified contractors for MACRA quality improvement  direct technical assistance. Direct technical assistance through this  program will target providers in small group practices of 15 or fewer, and  especially those in historically under resourced areas, such as rural  areas. CMS indicated that the purpose of the contracts is to provide a  flexible and agile approach to customized direct technical assistance and  support services to ensure success for providers who either participate in  MIPS or want to transition to an alternative payment model, thereby  easing the transition to a payment system based on performance and  patient outcomes.
In addition, CMS has been testing models aimed at helping small and  rural providers participate in value-based payment models. For example,  in 2016, CMS began the ACO Investment Model, which provides  advanced up-front and monthly payments to providers so they can make  important investments in their care coordination infrastructure.  According to information on CMS’s website, the ACO Investment Model  was developed in response to stakeholder concerns and available  research suggesting that some providers lack access to the capital to  invest in infrastructure that is necessary to successfully implement  population care management.
section_title: Small and Rural Physician Practices Face a Number of Challenges when Deciding Whether to Participate or when Participating in Value- based Payment Models
paragraphs: According to literature we reviewed and the 38 stakeholders we  interviewed, small and rural physician practices face many challenges  associated with deciding whether to participate, when to begin  participating, or whether to continue participating in value-based payment  models. We identified 14 challenges that can be classified into five key  topic areas: (1) financial resources and risk management, (2) health IT  and data, (3) population health management care delivery, (4) quality and  efficiency performance measurement and reporting, and (5) effects of  model participation and managing compliance with requirements. (See  table 1.) These 14 challenges are discussed in detail in the sections that  follow.
subsections: section_title: Financial Resources and Risk Management
paragraphs: Small and rural practices need financial resources to make initial  investments, such as those to make EHR systems interoperable, and  need financial reserves or reinsurance to participate in models that have  downside risk. Recouping investments may take years because the  models must have a year of performance data, which then must be  analyzed to determine any shared savings payment.
Limited ability to take on financial risk because of having fewer  financial resources/reserves compared with larger providers.  Some stakeholders told us that small and rural practices have few  financial resources and financial reserves. This limits their ability to  take on the downside risk associated with some value-based payment  models. In some value-based payment models, providers are  financially responsible if their actual spending for treating Medicare  beneficiaries exceeds the payment amount they receive from  Medicare. In other models, a provider’s spending is compared to its  historical spending, and if spending is higher than the historical  benchmark, the provider has to repay a portion of the exceeded  spending to Medicare. As a result, in order to participate, practices  need either to have financial reserves to cover instances such as  patients with unexpectedly costly medical events or to purchase  reinsurance to cover such expenditures, according to some  stakeholders we interviewed. Some stakeholders suggested that for  reinsurance to help small and rural practices, it must be affordable,  and the types of reinsurance currently available are costly.
High costs of initial and ongoing investments needed for  participation. Some stakeholders reported that significant  investments are needed for participation in value-based payment  models. Initial investments can cost practices thousands if not millions  of dollars, and it can be difficult for small practices to pay for this out  of their own pockets, according to some stakeholders. For example,  one stakeholder told us that most small practices are on a month-to- month budget and have small profit margins. Some stakeholders told  us that the costs of making EHR systems interoperable between  providers can be expensive and often is the same cost regardless of  practice size. A stakeholder from a physician practice told us that it  cost about $20,000 for the group to connect two EHR systems, which  would be the same cost for a small or large practice. Small practices  have fewer physicians to spread these costs among. Additionally,  some stakeholders reported that capital is needed to hire additional  staff to help with the care coordination activities that are part of model  participation.
Difficulties with recovering investments in a timely manner. Small  and rural practices often struggle with the amount of time it takes for  them to recoup the investments they have made to participate in a  model, according to some stakeholders we interviewed and literature  we reviewed. After making initial investments, practices must wait for  the completion and analysis of a performance year before they can  receive a shared savings payment. Some stakeholders told us that it  can take 2 or more years for this to occur. Furthermore, some  stakeholders expressed concern about model sustainability and  commented on the unpredictability of the models, which could affect  physicians’ confidence in their ability to recuperate investments made  if a model becomes obsolete or changes significantly. For example, at  the beginning of calendar year 2017, CMS is making a significant  change by replacing a 4-year-old model, the CPC initiative, with CPC  Plus—a model in which practices must take on downside risk to  participate. This change may prevent some small and rural practices  from participating in the successor model, and consequently affect  their ability to recoup the investments they made to participate in the  CPC initiative.
section_title: Health IT and Data
paragraphs: Small and rural practices need to have access to data that is important for  care management and cost control. Also, these practices need to hire and  train staff, as well as develop experience using EHR systems and  analyzing data needed for participation.
Difficulties with data system interoperability and limited ability to  access data outside the practices’ own systems. Some  stakeholders reported that having access to other providers’ data  through interoperable EHR systems is beneficial as it can provide  information to help coordinate and determine the appropriate care for  a patient; however, they also reported difficulties in constructing  interoperable systems. One small physician practice stakeholder told  us that the practice has had difficulties accessing the results of tests  conducted in an outside lab because the lab scans rather than types  the test results into its system. The stakeholder said that the practice  is working with its EHR vendor to address the problem but that he  suspected the vendor may be less concerned about the practice’s  challenges because the practice is small. He stated that such  challenges are common for many rural health care facilities. Separate  from interoperability, some stakeholders also reported that providers  and payers may not be willing to share information, such as claims  and price data, that would aid analysis and help a practice manage  patient care—such as tracking when patients visit specialists or fill  prescriptions—as well as control costs. It may be especially  challenging for small and rural physician practices to gain access to  such data as they may not have the relationships with payers that  larger practices may have, which is needed for data sharing.  According to a publication from our literature review, physician  practices reported that price data for services and supplies could be  difficult to obtain, maybe in part due to payer confidentiality and  agreements with pharmaceutical and device companies regarding  rebates or discounts.
Difficulties with educating and training staff about EHR systems  and the data entry, management, and analysis needed for  participation. Some stakeholders reported that significant resources  are needed for staff education and training to properly enter data  required for model participation. These data are often needed for  quality measurement associated with a specific value-based payment  model, and physician practices need to ensure that staff have  accurately and appropriately captured these data for patients to meet  the model’s requirements. Additionally, some stakeholders stated that  managing and analyzing data can be difficult and time-consuming, as  small and rural practices often struggle with how to use their EHR  systems to obtain data for analysis and timely decision making. For  example, one stakeholder told us that practices often do not know  how to use their EHR system to make a list of all patients with a  certain disease, which could help the practice develop population  health management strategies for that particular disease, among  other activities. Further, another stakeholder told us that uniquely  qualified staff are often needed to complete this work.
section_title: Population Health Management Care Delivery
paragraphs: Practices’ ability to manage care of their entire patient population is  affected by patients’ geographic location and preferences, and this is  especially true for rural physician practices whose patients may have to  travel distances to receive regular wellness visits and seek specialists  when recommended. In addition, the transition to value-based care, which  focuses on population health management, will require adjustment by  some physician practices, such as rural practices, that are generally more  experienced with a fee-for-service system, especially as the two systems  may have incentives that are difficult to reconcile.
Patient preferences and geographic location affect practices’  ability to implement population health management care delivery  and account for total cost of care. Literature we reviewed and some  stakeholders indicated that physician practices’ ability to succeed in  value-based payment models can be hindered by the preference and  location of patient populations. For example, one stakeholder stated  that physicians may have difficulty getting patients to complete  wellness visits or other activities necessary for them to stay healthy.  This is especially relevant for rural physician practices, as some  patients in rural areas may have to travel long distances for wellness  care or care from specialists, which can influence how often they  actually seek such care. If patients do not receive recommended care,  this can affect the rural physician’s ability to effectively manage  patients’ conditions. Patient behavior and location can also make it  difficult for providers to control the total cost of patient care or know  about all the costs. For example, one stakeholder said that under a  bundled payment model, practices are responsible for costs during an  entire episode of care, but practices cannot influence where the  patient receives post-acute care, which could affect the total cost of  patient care. Additionally, another stakeholder told us that it can be  difficult to engage patients using technology. This ACO has tried to  manage patients’ post-acute care by communicating with patients  through a technology system. However, the effectiveness of the  system has been limited because some patients do not want to use it,  preferring to speak with their physician directly.
Provider resistance to making adjustments needed for  population health management care delivery. Small and rural  physician practices are having difficulty adjusting to a value-based  care system, which focuses on population health management, as  opposed to being paid based on volume, according to some  stakeholders. For example, because providers are paid for each  service under Medicare fee-for-service, providers have an incentive to  provide a high volume of services without consideration of the costs or  value of such services. Rural practices have a larger percentage of  their Medicare patients enrolled in fee-for-service compared to non- rural practices, which have a larger percentage of their Medicare  patients enrolled in Medicare Advantage, the private plan alternative  to Medicare fee-for-service. Therefore, rural practices may be more  influenced than others by the incentives under Medicare fee-for- service. In contrast, under value-based payment models, population  health is a major component that requires care coordination and  consideration about whether certain services are necessary that might  involve additional attention and time from physicians. According to a  publication from our literature review, some practices experience  conflicting incentives—to increase volume under their fee-for-service  contracts while reducing costs under their risk-based contracts—and  not knowing which patients will be included in the value-based  payment model can also make managing care difficult. Additionally,  some providers in small and rural practices may be concerned about  relying on the care of the other providers over which they have little or  no influence, according to some stakeholders. One stakeholder we  interviewed told us that this lack of trust in the ability of others to  effectively coordinate and co-manage care spawns an unwillingness  to enter into value-based payment models that require extensive care  coordination across numerous providers to achieve shared savings.
section_title: Quality and Efficiency Performance Measurement and Reporting
paragraphs: Value-based payment models require a full year of performance data, and  the time lag between data submission and when a practice receives its  performance report delays practices’ understanding of actions needed to  improve care delivery and receive financial rewards. Further, the number  and variation of quality measures required by Medicare and private  payers are burdensome for small and rural practices, and practices with  small patient populations face quality and efficiency measurement that  may be more susceptible to being skewed by patients who require more  care or more expensive care.
Difficulties with receiving timely performance feedback. Some  stakeholders mentioned a variety of issues related to delays in  performance assessments associated with value-based payment  models. As noted previously, it takes a full year of performance in  addition to the time it takes for data about that year to be analyzed  before information is known about a physician practice’s performance  within a model. According to some stakeholders, this time lag makes it  difficult for the practices to efficiently identify the areas that are  working well and those that need improvement. For example, one  stakeholder told us that a physician may receive the results of his or  her performance within a model in 2016 for care that was provided in  2014. This limits physicians’ ability to make meaningful and timely  changes to the care they provide. Additionally, some stakeholders  reported that practices may not understand how best to improve their  performance due to the limited information they receive from CMS.
Misalignment of quality measures between various value-based  payment models and payers. Some stakeholders told us that  physician practices can be overwhelmed and frustrated by the number  of quality measures that they need to report on for participation in  value-based payment models and that the measures used by  Medicare value-based payment models are not well-aligned with  those used by commercial payers. Even if payers have similar quality  measures, there may be slight variations in their calculation, which  makes reporting burdensome. One stakeholder who works within an  ACO stated that there are 58 unique quality measures across all the  payers he works with.
Performance measurement accuracy for practices with a small  number of Medicare patients. Since small and rural physician  practices often have fewer patients to measure, their performance  may be more susceptible to being skewed by outliers, according to  some stakeholders we interviewed. Even if these practices have only  a few patients that require more comprehensive or expensive care,  these few can disproportionately affect their performance negatively,  and in turn the financial risk they bear, compared to practices with  much larger patient populations. For at least one model type— ACOs—this challenge may be addressed by a requirement that an  ACO have a minimum number of patients to participate, as well as by  CMS adjusting the performance of some ACOs to account for their  size. This patient size requirement and adjustment can help ensure  statistical reliability when assessing an ACO’s performance against  measures. However, some stakeholders told us that this requirement  also has its challenges. For example, it can be particularly difficult for  rural practices to find other practices to group with to meet this patient  requirement.
section_title: Effects of Model Participation and Managing Compliance with Requirements
paragraphs: To participate in value-based payment models, small and rural physician  practices may feel pressure to join with other practices. Model  participation may also mean that physician and other practice staff must  take on additional administrative responsibilities to meet conditions of  participation. Furthermore, practices must work to stay abreast of  regulations and model requirements as the models evolve.
Difficulties with maintaining practice independence. Literature we  reviewed and some stakeholders indicated that, in the movement  toward value-based payment models, many small and rural practices  feel pressure to join other practices or providers (such as a hospital or  health system) to navigate these models even if the practices would  prefer to remain independent.
Limited time of staff and physicians to complete administrative  duties required for model participation. Some stakeholders  reported that both physicians and practice staff had to juggle many  administrative responsibilities as part of participating in value-based  payment models, which may be especially challenging for small and  rural practices that tend to have fewer staff. Administrative duties may  conflict with time needed for patient care. For example, one  stakeholder told us that physicians are often busy seeing patients  throughout the day and are unable to complete administrative tasks,  such as attending meetings. Small physician practices may have  limited staff time to devote to other administrative duties, including  completing required documentation or collecting and reporting data on  quality measures needed for participation in value-based payment  models. Practices that want to add staff may also face challenges,  such as finding qualified staff that are experts within their field and  that understand the requirements associated with value-based  payment models.
Difficulties with understanding and managing compliance with  the terms and conditions of waivers related to various fraud and  abuse laws. The Secretary of Health and Human Services is  authorized to waive certain requirements as necessary to implement  the Shared Savings Program to encourage the development of ACOs  and to test innovative payment and service delivery models, such as  BPCI. However, some stakeholders stated that understanding and  navigating the terms and conditions of waivers can be difficult and  overwhelming for practices to manage. This may be especially true  for small and rural practices that have less time to develop the  knowledge necessary to understand waiver options or the resources  to hire assistance in doing so, such as legal counsel.
Difficulties with staying abreast of regulatory changes and  managing compliance with multiple requirements of value-based  payment models. Some stakeholders said that small and rural  physician practices find it challenging to stay informed of and to  incorporate regulation and requirement changes associated with  value-based payment models. This may be due, in part, to small and  rural practices often having fewer staff and resources to monitor  changes.
section_title: Organizations Offer Services That Can Help Small and Rural Physician Practices Participate in Value- based Payment Models, but Not All Practices Have Access Partner Organizations Share Risk and Provide Comprehensive Services That Can Help with Challenges
paragraphs: We found that organizations that can help small and rural practices with  challenges to participating in value-based payment models can be  grouped into two categories: partner organizations and non-partner  organizations. Partner organizations share in the financial risk associated  with model participation and provide comprehensive services. Non- partner organizations do not share financial risk but provide specific  services that can help mitigate certain challenges. However, not all small  and rural physician practices have access to services provided by these  organizations.
Based on the 38 stakeholder interviews we conducted and the related  documentation collected, we found that some organizations serve as  partners to small and rural physician practices. As partners, these  organizations share in the financial risk associated with the models and  provide comprehensive services that help with challenges in each of the  five key topic areas affecting small and rural physician practices. Partner  organizations can help with a variety of value-based payment models, including ACOs, comprehensive primary care models, and bundled  payments. Certain partner organizations, known as awardee conveners,  have binding agreements with CMS to assist providers with participation  in BPCI, including helping them plan and implement care redesign  strategies to improve the health care delivery structure. Other partner  organizations may bring small and rural practices together to help form  and facilitate an ACO. In this role, these partner organizations can help  small and rural practices fulfill any requirements for an ACO to have a  minimum number of patients and facilitate the reporting of performance  measures as a larger group while still allowing practices to remain  independent. This type of assistance can mitigate two of the challenges  stakeholders have identified—performance measurement accuracy for  practices with a small number of Medicare patients and maintaining  practice independence.
Depending on the arrangement between the practices and the partner  organization, the partner organization may receive all or some of the  savings generated by the ACO or bundled payment, as well as share in  any financial losses incurred. For example, a partner organization  stakeholder stated that the organization—which helps form ACOs— retained 40 percent of the shared savings, and the physician practices  received the remaining 60 percent. Similarly, another partner organization  stakeholder told us that the organization took on the entire share of any  financial losses incurred and received a third of any gains. In some  agreements, practices may receive different distributions of the financial  savings based on their performance compared to set performance goals  or to other practices in the group. In this type of arrangement with a  partner organization, a practice will receive, at most, a portion of its  shared savings, which could extend the time it takes practices to realize  financial gains. See figure 1 for how sharing financial risk can mitigate a  challenge faced by small and rural physician practices.
Comprehensive services provided by partner organizations can either  directly or indirectly help to mitigate many of the participation challenges  faced by small and rural physician practices. As a way of directly  assisting, for example, partner organizations can aid small and rural  physician practices with population health management by analyzing data  to identify high-risk patients such as those with chronic conditions who  need comprehensive care management. Conversely, one challenge  identified for small and rural physician practices was their limited ability to  take on financial risk because they have fewer financial reserves when  compared to their larger counterparts. While partner organizations do not  directly address that these practices have fewer financial reserves, they  can indirectly assist by taking on part or all of the financial risk of model  participation. A small physician practice stakeholder told us that without  the services provided by a partner organization, the practice would not be  able to participate in the model. While the services offered by partner  organizations can vary, they generally include the following.
Provide or share resources. Partner organizations can support the  cost of resources needed for model participation, such as health IT  and care coordination resources, or help share resources across  many practices to reduce costs for individual small and rural practices.  For example, an awardee convener stakeholder told us that the  organization manages a care innovation center staffed with about 70  nurses who work with patients and providers to make appointments  and coordinate services, among other population management  activities. Another partner organization stakeholder told us that the  organization had formed a pharmacy hub in which the pharmacist  works directly with the practices on comprehensive medication  management. Further, some stakeholders stated that partner  organizations can help reduce the costs of EHR systems and data  analytics for the practices by, for example, sharing the EHR system  and data analytics staff across practices. One partner organization  stakeholder told us that, in another type of arrangement, the partner  organization provides up-front funding for technology and other  resources in return for 40 percent of any shared savings generated by  the ACO. This arrangement can be particularly helpful to small and  rural practices that may not have a lot of capital to invest. See figure 2  for the challenges mitigated by partner organizations by providing or  sharing resources.
Manage health IT systems and data. Partner organizations  generally work with practices to enhance the interoperability of the  practices’ data systems so that data can be shared and easily  retrieved for analysis. For example, an awardee convener stakeholder  told us that the organization had developed a way to connect  providers’ EHR systems to its data system, as well as developed  software that providers can use to more easily share data among  themselves. Similarly, partner organizations can manage data and  provide analytics. Some partner organization stakeholders stated that  they conduct analysis and provide reports and data to physicians to  help them with population management, such as identifying high-risk  patients and practice improvement needs. A partner organization  stakeholder told us that the organization collects beneficiary level data  from all payers—including those that the partner organization does  not work with—to monitor quality improvements and identify where  physicians missed opportunities to diagnose patients. See figure 3 for  the challenges that are mitigated by partner organizations managing  health IT systems and data.
Provide education and training related to population care  management. Partner organizations can provide on-site training and  mentoring for the practices’ staff related to population management  care delivery. This can help small and rural physician practices  transition their staff, who may be accustomed to being payed based  on volume, to a value-based care system that focuses on population  health management. It can also provide practices with tools on how to  manage and engage patients, such as patients who are not  accustomed to having regular wellness visits or using technology. For  example, one partner organization stakeholder we interviewed said  that the organization holds quality improvement workshops for  physicians every quarter to work on implementing population health  management activities, such as wellness visits. Another partner  organization stakeholder said that the organization has practice  transformation staff who spend about 4 hours each week working  directly with each physician practice to implement a care management  program. This stakeholder stated that it was important to provide  physician practices with the tools, but it was just as important to  provide in-practice support on how to use those tools and help to  strengthen the practice. See figure 4 for the challenges that are  mitigated by partner organizations providing education and training on  population health management.
Provide population health management services. Partner  organizations can provide population health management activities,  including identifying and tracking high-risk patients, scheduling  wellness visits, and managing patients with chronic conditions. For  example, an awardee convener stakeholder told us that the  organization helps providers by checking on whether the patients  have rides to their appointments, setting up patients’ appointments,  and contacting other social services. Another partner organization  stakeholder told us that the organization has care navigators, who  work with physician practices to engage with patients and help those  at high health risk, as well as patient care advocates, who identify  patients with gaps in care or who need annual wellness visits. See  figure 5 for the challenges that are mitigated by partner organizations  providing population health management services.
Measure quality and efficiency performance. Partner organizations  can conduct analyses and provide reports to physician practices to  help them understand and track their performance. For example,  some partner organization stakeholders we spoke with measured  physician practice performance against a defined set of quality  measures and compared practices with their peers. These reports can  help physician practices identify opportunities for quality improvement  and savings without waiting for performance feedback from CMS. For  example, one partner organization stakeholder told us that the  organization analyzes data at the patient and physician level looking  for opportunities to help the physician practice gain efficiencies, as  well as identify differences in quality among practices. This partner  organization also uses the data to educate the physician practices  about patient attribution and differences in quality. According to  another partner organization stakeholder, the analysis the  organization conducts for their physician practices helps these  practices manage the number and variety of performance  measurements associated with value-based payment models. See  figure 6 for the challenges that are mitigated by partner organizations  helping physician practices measure their quality and efficiency  performance.
Manage compliance with requirements of value-based payment  models. Partner organizations can provide assistance with value- based payment model requirements, as small and rural physician  practices may not be structured to handle this administration. For  example, an awardee convener stakeholder stated that it liaisons with  CMS and prepares and submits all CMS-required documentation on  behalf of providers. Another partner organization stakeholder stated  that the organization’s legal counsel explains the various waivers  relevant to the ACO, as well as the requirements of these waivers to  providers in the ACO. See figure 7 for the challenges that are  mitigated by partner organizations helping physician practices  manage compliance with the rules and regulations of value-based  payment models.
subsections: section_title: Non-Partner Organizations Do Not Share Risk with Physician Practices but Provide Specific Services That Can Help with Some Challenges
paragraphs: Based on the 38 stakeholder interviews we conducted and the related  documentation collected, the other category of organizations we identified  that help small and rural practices participate in value-based payment  models are non-partner organizations. Non-partner organizations provide  services that are generally not as comprehensive as partner  organizations, and they do not share in the financial benefits or risks with  the practices. The specific services they provide—primarily in the key  topic areas of health IT and data, quality and efficiency performance  measurement and reporting, and population health management care  delivery—help with certain challenges. The source of funding for non- partners also varies. For example, non-partner organizations might be  hired by the practice itself or funded separately by government grants.  The following are the types of non-partner organizations identified in our  review and the types of services they can provide to small and rural  physician practices.
Facilitator conveners. These organizations have arrangements with  providers or awardee conveners to provide administrative and  technical assistance to aid with participation in BPCI. Although  facilitator conveners do not bear risk, they are similar to awardee  conveners in that they can assist physician practices and other  providers with quality measurement and performance activities. For  example, a facilitator convener could help track quality measures for  providers. They can also help physician practices transition toward  population health management care delivery by providing education to  physician practices through webinars, for example, and by helping  providers develop processes to coordinate episodes of care across  providers.
Health IT vendors. These technology companies are hired by  physician practices to provide EHR systems, as well as data analytics  software and services. Health IT vendors can assist practices with  system interoperability challenges. For example, one health IT vendor  stakeholder said that the vendor provides a connectivity engine so  that physician practices’ EHR systems are interoperable with other  providers and payers. Health IT vendors can also conduct analyses— such as using data to evaluate physician practices against  performance measures to identify additional opportunities for  improvement—or help develop population health management  processes. Health IT vendors can help practices manage  misalignment of quality measures between payers. A health IT vendor  stakeholder told us that the organization uses numerous codes within  practices’ datasets to allow practices to produce reports for multiple  payers whose quality measures do not align; however the stakeholder  added that this process is time intensive and could increase costs for  the practices. Health IT vendors can also provide education and  training for physician practices on best practices for EHR integration  and optimization. A health IT vendor stakeholder told us that for small  physician practices they generally provide EHR services; revenue and  practice management service; and patient engagement services,  which can include automatic check-in for patients, patient payment  collection, and patient portals so practices can communicate  electronically with patients.
Regional Extension Centers (REC). RECs provide on-the-ground  technical assistance intended to support small and rural physician  practices, among others, that lack the resources and expertise to  select, implement, and maintain EHRs. According to Department of  Health and Human Services’ (HHS) documentation, RECs stay  involved with physician practices to provide consistent long-term  support, even after the EHR system has been implemented. REC  services include outreach and education on systems, EHR support  (e.g., working with vendors, helping to choose a certified EHR  system), and technical assistance in implementing health IT.  Technical assistance in implementing health IT includes using it in a  meaningful way to improve care, such as using systems to support  quality improvement and population health management activities.
Sixty-two RECs were funded through cooperative agreements by  HHS’s National Learning Consortium. RECs include public and  private universities and nonprofits.
Quality Innovation Network-Quality Improvement Organizations  (QIN-QIO). QIN-QIOs work with small and rural physician practices,  among others, to improve the quality of health care for targeted health  conditions. For example, if a QIN-QIO has an initiative related to a  specific health condition, such as a heart condition, the QIN-QIO  would help practices improve clinical quality measures for patients  with this condition, such as measures for blood pressure, cholesterol,  and smoking cessation. The assistance provided and work performed  by QIN-QIOs can vary greatly. A QIN-QIO stakeholder we interviewed  told us that the QIN-QIO helps providers learn how to produce a  quality report, how to interpret quality measures, and how to improve  those measures, as well as educates providers on various  requirements of value-based payment models. Other activities the  network performs include educating physician practices on how to  capture and understand EHR data since, according to this same  stakeholder, small and rural physician practices often struggle with  proper documentation for quality and performance management. The  14 QIN-QIOs each cover a region of two to six states and are  awarded contracts from CMS.
Practice Transformation Networks (PTN). PTNs are learning  networks designed to coach, mentor, and assist clinicians in  developing core competencies specific to population health  management to prepare those providers that are not yet enrolled in  value-based payment models. According to CMS officials, PTNs work  with physician practice leadership to assist with patient engagement,  use data to drive transformation of care toward population health  management, and develop a comprehensive quality improvement  strategy with set goals. The degree of help provided by the PTN  depends on how far along the physician practice is in transforming to  value-based care, according to CMS officials. PTNs provide technical  assistance to physician practices on topics such as how to use data to  manage care and move toward population health management. For  example, a PTN stakeholder told us that the PTN makes sure the  physician practice creates a registry to track high-risk patients and  then uses the registry to perform outreach to patients to initiate follow- up care appointments. Similarly, PTNs can help ensure that practices  use a referral tracking system, such as a system to determine whether  a patient that a practice referred for a mammogram actually had the  mammogram. PTNs can also provide other educational resources  such as live question-and-answer chat sessions, peer-to-peer  webinars, and computer modules that cover topics including quality  improvement and patient engagement. The 29 PTNs receive funding  through CMS grants and are part of CMS’s Transforming Clinical  Practice Initiative. The PTNs include public and private universities,  health care systems, and group practices.
The services of non-partner organizations could help assist with some  challenges we identified for small and rural practices. (See fig. 8.)
section_title: Not All Small and Rural Physician Practices Can Access Services Provided by Organizations
paragraphs: Although we found that organizations can assist with many of the  challenges identified for small and rural practices, not all such practices  can access these services for a variety of reasons. First, some  stakeholders we interviewed said that small or rural physician practices  do not necessarily have access to an organization, such as an  organization that forms ACOs. For example, some ACO stakeholders told  us that they used criteria to determine which physician practices they  would reach out to for inclusion in the ACO. One ACO stakeholder stated  that the organization analyzes public data to identify the physician  practices that look like good candidates for population health  management and then talks to the practices about a possible partnership.
Therefore, some small or rural physician practices struggling with  changes needed to deliver population health management may not be  contacted by an organization that forms ACOs.
Second, we heard from some stakeholders that the limited resources of  many small and rural physician practices may hinder their access to  services provided by organizations. For example, small and rural  physician practices may not have the financial resources to hire  organizations that could assist them with participation, such as health IT  vendors. Also, according to some stakeholders, organizations’ ability to  assist practices is hindered when the practices struggle to make the initial  investments needed to participate, such as hiring new staff or developing  necessary data systems.
Last, even if practices have access to an organization, that organization  may not offer the services that the practice needs since the services  offered can vary by organization. For example, not all partner  organizations that form ACOs have access to and use other payers’ data  to aid in the management of patient care. When we asked one partner  organization stakeholder how the organization received access to data,  the stakeholder stated that it was because of long-standing relationships  it had with payers. Other partners that form ACOs may not be able to  provide similar data to share. Additionally, according to CMS officials,  each facilitator convener and awardee convener has discretion in the  services it provides, and the services can vary, as can the services  provided by CMS and HHS grantees—RECs, QIN-QIOs, and PTNs.
section_title: Agency Comments
paragraphs: We provided a draft of this report to CMS for comment. CMS provided  technical comments, which we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Health and Human Services, and the CMS  administrator. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix I.
section_title: Appendix I: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Greg Giusto, Assistant Director;  Christie Enders, Analyst-in-Charge; Deirdre Gleeson Brown, Analyst-in- Charge; and Samantha Pawlak made key contributions to this report.  Also contributing were George Bogart, Beth Morrison, and Vikki Porter.