Analysis: 4 significant findings from the recent AMGA Physician Risk Survey

The American Medical Group Association recently released its fourth annual survey of its membership on the transition to alternative payment models and risk. For anyone seeking to understand the state of the transition to value-based payment, where we might be headed and the impediments to the transition, it’s a must read. 

Takeaway

Below are a few of the findings from the survey that resonated with me based on my experience and conversations with HFMA members.

1. Are we there (ready to take risk) yet?

It looks like the answer is “yes” for many respondents. The survey finds “In 2018, 74% of respondents answered that they would be ready to participate in downside-risk payment models within two years. This is a marked change from 2015, when 42% indicated they would be ready to accept downside-risk payments within two years.”

Respondents reported that the three main categories of investments they were making as they prepared to assume more risk included, not surprisingly: care process redesign, IT solutions and care management personnel. These investments mirror the findings of HFMA’s Value Project research into the core capabilities organizations will need to develop as they move across the risk continuum.

It’s worth noting that with most of the growth in risk-based payments anticipated, MA respondents are emphasizing the importance of strong post-acute care networks.

2. Medicare Advantage is where the opportunity is

AMGA members reported MA currently accounts for 30% of revenues (up from 22% in 2016) and is anticipated to grow to 35% in 2020. Risk-bearing APMs (capitation, partial cap or shared risk) accounts for 39% of MA payments (~ 12% of AMGA member total payments) and are anticipated to grow. The growth in both total dollars in MA and the amount of those dollars at real risk reflects the underlying projected growth in MA. Medicare Advantage enrollment is projected to continue to grow over the next decade, rising to 42% of all Medicare beneficiaries by 2028.

Beyond the growth opportunity, why do AMGA members prefer MA? It’s all the things the MSSP program is not. Specifically, survey respondents report, “MA arrangements allow flexibility in care delivery efficiencies. MA arrangements can provide opportunities for AMGA members and MA plans to target, reward, and adjust for factors that both parties agree improves care and the patient experience. MA contracts can fund the services and infrastructure providers need to optimize outcomes for MA beneficiaries. MA allows for greater accountability and aligns incentives around utilization appropriately. MA also allows groups to affect the revenue side through appropriate risk adjustment, the expense side through improved care management processes, and the quality side by meeting MA Star ratings. Critically, because beneficiaries enroll in an MA plan, it does not share the patient attribution problem that is so prevalent in the Medicare ACO programs.”

3. Most employers aren’t moving aggressively (or at all)

The report finds that “Employers have been slow to demand value arrangements. Large employer human resources generally focus their benefit strategies around increasing employee access to providers, not on harder to define “value” arrangements. Additionally, many providers do not have a sufficiently sized patient population that would support downside-risk arrangements.” For the most part, this echoes many of the frustrating conversation’s I’ve had with HFMA’s members in progressive organizations who want to apply what they’ve learned in Medicare FFS APMs to the commercial market but can’t find a willing partner.      

4. Flat growth expected in MSSP

Medicare ACO revenues equaled 15% of total federal revenues in 2018 and are expected to remain flat through 2020. It is noteworthy, however, that respondents expect revenues from downside-risk ACOs to increase from 5% of revenues to 10% by 2020, while upside-only revenues will correspondingly decrease from 10% to 5% in the same time period.

Why might you ask? The survey reports “Respondents report that the regulatory framework that has been promulgated around ACOs makes financial success in this model challenging at best. Patient attribution, financial benchmarking, and risk-adjustment methodologies have been problematic since the MSSP program’s rollout in 2012 (though some positive changes around attribution and benchmarking were included in the 2018 MSSP final rule). Respondents noted the inherent difficulties in taking risk on a FFS chassis and that savings opportunities shrink year after year if the ACO maintains a strong savings performance. This issue is worsened by the fact that shared-savings payments are not made up to a year after the agreement period begins, meaning the ACO’s multimillion-dollar up-front investment will not be recouped for a year, if at all. Moreover, the ability to control costs in the ACO setting are difficult and unpredictable, as patients are allowed to receive care outside the medical group setting.”

More or less, the quote above could be a synopsis of our and a number of other organizations’ comment letters to CMS about the MSSP program.