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Value-based care -- in which medical practices are paid based on the value of their care, not on volume -- is a good idea but the Centers for Medicare & Medicaid Services (CMS) need to improve its implementation, doctors and a healthcare executive told members of the House Ways & Means Health Subcommittee.

"I am a proponent of the need to move to value-based care, improving quality while decreasing wasteful spending and ensuring access," Robert Berenson, MD, an institute fellow at the Urban Institute in Washington, D.C., said at on improving value-based care for patients and providers. "However, I believe that value-based payment as a mechanism to promote better care delivery has gotten off track and needs a thorough reevaluation and reformulation."

Stephen Nuckolls, CEO of Coastal Carolina Health Care, a physician-owned multispecialty medical practice that serves several counties in eastern North Carolina, said that his organization was one of the first to join a Medicare Shared Savings Program (MSSP) -- one of CMS's first accountable care organization (ACO) models, which allows medical practices to share in any savings they generate -- when the program began in 2012.

"Throughout our tenure in the program, our savings rate has steadily increased, and for last year, we are projecting a savings rate of 15%," he said. "Cumulatively, we have saved $84 million getting $28 million in savings to Medicare."

Patient outcomes have improved as well, he continued. "We have reduced hospitalizations by 39% and reduced ED [emergency department] visits 28% ... Our colorectal and breast cancer screening rates, along with blood sugar control for patients with diabetes, have ranked in the top 1% of the program. We achieve this success by implementing common-sense programs and strategies, including improving access to care, enhancing our quality programs, providing home visits, revising provider and staff compensation systems, and creating appropriate incentives to ensure engagement from our specialty providers."

However, all of those positive results have had an adverse consequence. "We have enjoyed exceptional performance in the MSSP, but unfortunately, our ACO is unlikely to renew our contract when it ends at the end of this year," Nuckolls said. "The program's benchmarks are established based on an organization's most recent costs. So when you perform well, like we have, the benchmarks are lowered," meaning the ACO has to work harder to get the same financial reward. "CMS has yet to adequately address the benchmark ratchet, and doing so is essential to the long-term viability of the program."

Subcommittee members seemed sympathetic to the physicians' plight. "We learned at an earlier hearing that a number of medical Medicare Advantage plans are actually paying 20% less than traditional Medicare, so we have higher spending, skipping on care, and underpaid doctors, all done under the brand of 'value,'" said Rep. Lloyd Doggett (D-Texas). "While some alternative payment models appear to show greater promise and achieve the outcomes that we are seeking, they must be carefully designed to avoid repeating the failures of Medicare Advantage."

He also expressed concerns about ACOs becoming a "back door" to further privatization of Medicare. "I share the concern that I've heard directly from Austinites in my hometown, about ACO REACH, which has allowed some entities convicted of fraud to participate," Doggett said, referring to another CMS value-based payment initiative. "One review of the model found at least 10 companies convicted of fraud [that were participating] ... Similarly, private equity-owned practices and management companies continue to expand in Medicare through alternative payment models."

Rep. Brad Wenstrup, DPM (R-Ohio), a podiatrist, said that "prevention is key" when considering the savings produced by value-based care.

"This is where the savings is, is in the value of a healthy human life," he said. "I say to insurance companies, why don't you incentivize if you have a group, a business -- maybe it has 100 insulin-dependent diabetics. Maybe you put into the plan that they have no copay three times a year to go to their doctor. You'll probably prevent hospitalizations and decrease costs because they're being checked up on."

Rep. Claudia Tenney (R-N.Y.) was concerned with the performance of the Center for Medicare and Medicaid Innovation (CMMI), which develops and implements value-based care models for CMS. "I think that CMMI needs to rethink the way it engages with participants and relevant stakeholders to encourage greater participation," she said. Tenney asked the witnesses what they thought CMMI could be doing better.

Nuckolls said that the agency did reasonably well communicating with ACOs like his, but when it comes to information on the ACO's performance, "we need data sooner, so that we can respond to it." In addition, on the fee-for-service side of the practice, "we have to get inflation updates. We've been losing money each year, and we would not be able to recruit into our area without the ACO savings. ... The Advanced Alternative Payment Model [bonus] payments really have helped defray the inflation costs that we've had."

Tenney also asked what could be done to recruit more rural providers into ACOs. Sarah Chouinard, MD, chief medical officer at Main Street Health, a rural value-based care company, said doctors needed to be offered a more attractive way to practice medicine. "No one wants to go in and see 25 patients and deliver 15-minute healthcare, and also not have an idea of how sick these patients are," she said.

"So if we could build outpatient primary care models where we could look at a 'pyramid' of our patients and understand that the top 10% who are the very sickest and the very highest need -- what if I could spend an hour with that patient?" she continued. "What if we could really go through everything that they needed to understand about their chronic condition?"

In addition, expanding care teams to include diabetes educators and other physician extenders would also help, she noted.

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