At the Intersection of Health, Health Care and Policy Cite this article as: James D. Reschovsky, Larisa Converse and Eugene C. Rich Solving The Sustainable Growth Rate Formula Conundrum Continues Steps Toward Cost Savings And Care Improvements Health Affairs, 34, no.4 (2015):689-696 (published online March 11, 2015; 10.1377/hlthaff.2014.1429)
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Web First By James D. Reschovsky, Larisa Converse, and Eugene C. Rich 10.1377/hlthaff.2014.1429 HEALTH AFFAIRS 34, NO. 4 (2015): 689–696 ©2015 Project HOPE— The People-to-People Health Foundation, Inc.
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Solving The Sustainable Growth Rate Formula Conundrum Continues Steps Toward Cost Savings And Care Improvements
James D. Reschovsky ([email protected]) is a senior fellow at Mathematica Policy Research in Washington, D.C.
Congress is again attempting to repeal the Sustainable Growth Rate (SGR) formula. The formula is a failed mechanism intended to constrain Medicare Part B physician spending by adjusting annual physician fee updates. Congress has averted formula-driven physician fee cuts each year beginning in 2003 by overriding the SGR, usually accompanied with last-minute disputes about how these overrides should be paid for. Last year Congress achieved bipartisan and bicameral agreement on legislation to replace the SGR—the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which we refer to as the “2014 SGR fix”—but was unable to find a way to pay for the legislation under current budget rules. Current congressional deliberations appear focused on how to pay for the fix, with wide consensus that the 2014 legislation should remain the basic model for reform. We describe key features of the 2014 SGR fix, place it in the context of both past and ongoing Medicare health policy, assess its strengths and weaknesses as a mechanism to foster improved care and lower costs in Medicare, and suggest further actions to ensure success in meeting these goals. ABSTRACT
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he Sustainable Growth Rate (SGR) formula, which has been in place since 1998, was intended to constrain Medicare spending by adjusting annual physician fee updates. The adjustments are derived by calculating the cumulative rate of physician spending relative to a target based on growth in the gross domestic product.1 The mechanism has been widely criticized as both ineffective and inequitable. Because the fee updates must be adjusted for the cumulative variance between actual spending and target spending, the next proposed SGR fee cut, which is to take effect on April 1, 2015, would dictate a 21.2 percent cut in physician fees.
Larisa Converse is a research analyst at Mathematica Policy Research. Eugene C. Rich is a senior fellow at Mathematica Policy Research.
Such large physician fee cuts could jeopardize Medicare beneficiaries’ access to their physicians if the lower fees prompted some physicians to stop seeing Medicare beneficiaries. To avoid such a scenario, Congress has consistently overridden the formulaic SGR cuts since a 4.8 percent cut was made in 2002 (Exhibit 1). The lastminute nature of many of these temporary SGR overrides has frequently produced contentious political battles over how to pay for them. Meanwhile, physicians’ fees have not kept pace with inflation, as physicians have received either no fee updates or only small ones.1 The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015 and S. 2000), which we refer to as the “2014 SGR fix,” A p r i l 20 1 5
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Web First Exhibit 1 Updates In The Physician Fee Schedule Mandated By The Sustainable Growth Rate (SGR) Formula And Legislated By Congress, 2003–15
SOURCE Hahn J. Medicare physician payment updates and the Sustainable Growth Rate (SGR) system [Internet]. Washington (DC): Congressional Research Service; 2014 Jun 12 [cited 2015 Feb 28]. Available from: http://greenbook.waysandmeans.house.gov/ sites/greenbook.waysandmeans.house.gov/files/R40907_gb.pdf.
obtained both bipartisan and bicameral support in congressional committees for its substantive features in March 2014. However, the legislation never reached the Senate floor because Democrats and Republicans could not agree on how to pay for its cost. At the time, the Congressional Budget Office (CBO) estimated the ten-year cost of the legislation at $138 billion.2 The CBO’s estimate was updated this year to $174.5 billion.3 Some members of Congress have returned to the SGR fix this year. They appear to be using the 2014 legislation as a framework, although at this writing no new legislation has been introduced in Congress. Some members of Congress contend that the SGR fix should not have to be paid for with offsetting spending cuts or revenue increases. However, such arguments are unlikely to prevail in the current Congress. We describe and critically review the 2014 SGR fix’s provisions and place the legislation in the context of other efforts to reform clinician payment.
The 2014 SGR Fix: Background The 2014 SGR fix affects what it calls “eligible professionals,” which include physicians, physician assistants, nurse practitioners, clinical nurse specialists, and therapists who treat Medicare patients. We use physicians as a shorthand 69 0
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term, since they bill for about 73 percent of Medicare Part B spending on professional services.4 The 2014 SGR fix presents physicians with two payment pathways: one for those paid primarily by fee-for-service reimbursement and one for those whom the 2014 SGR fix describes as “significantly” involved in value-based alternative payment models, such as accountable care organizations (ACOs), bundled payment arrangements, and patient-centered medical homes. Provisions of the 2014 SGR fix encourage the second pathway. Details are available in the online Appendix.5 In both pathways, the 2014 SGR fix would replace the SGR with statutorily specified fee increases: There would be 0.5 percent annual fee increases from 2014 to 2018. Between 2019 and 2023 there would be no annual fee increases, but physicians on the alternative payment model pathway would receive a 5 percent bonus on their Medicare payments. Finally, from 2024 onward, fee-for-service pathway physicians would receive annual fee increases of 0.5 percent. Those on the alternative payment model pathway would receive annual increases of 1 percent—twice as large. For this analysis, we have used the dates in the 2014 SGR fix. Dates will likely be moved forward one year if legislation similar to that is passed in 2015.
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Physicians on the fee-for-service pathway would be subject to the merit-based incentive payment system, a new pay-for-performance program that would enhance and consolidate three current Medicare physician incentive programs, as described below. Most physicians on the alternative payment model pathway would be required to receive “significant” revenue through certified payment or delivery mechanisms that require the use of electronic health records (EHRs) and quality performance standards and that involve financial risk based on cost performance. (For physicians on this pathway, significant revenue is defined as 25 percent of Medicare revenue in 2018, increasing in 2022 to 75 percent of either Medicare revenue or total revenue.) In other words, payments could be adjusted down or up if patient costs were higher or lower, respectively, than benchmark values (typically based on comparable risk-adjusted fee-for-service costs). Physicians on this pathway who participate in medical homes would not be required to bear downside risk (that is, they would not have to forgo revenues if costs exceeded benchmarks). However, they would still be required to meet other value-based criteria. Repeal of the SGR would give physicians certainty concerning payment and would rid Congress of a failed cost control policy that has turned into a political and budgetary albatross. In addition to repealing the SGR, the 2014 SGR fix would encourage physicians to abandon traditional fee-for-service reimbursement in favor of value-based payment arrangements that promise to improve care and lower costs. Yet future cost savings did not figure into the CBO’s estimates of the legislation’s costs. The legislation’s potential to improve care and lower costs depends on whether the proposed merit-based incentive payment system is capable of reducing cost growth and improving care for patients treated by physicians on the fee-forservice pathway, whether physicians on the alternative payment model pathway will succeed in achieving improved care quality and lower costs, and whether incentives are sufficient to move physicians to that pathway.
Merit-Based Incentive Payment System The merit-based incentive payment system— which would cover physicians not on the alternative payment model pathway—aims to weaken perverse fee-for-service incentives through an enhanced value-based pay-for-performance component that would also encourage practice improvements to make future participation in
the alternative payment model pathway easier. The merit-based incentive payment system would consolidate and enhance three current programs. The first two impose penalties for physicians who fail to report quality measures and those who fail to use EHRs that meet meaningful-use requirements. The third is the valuebased payment modifier, established by a provision of the Affordable Care Act (ACA). Starting this year, the modifier adjusts payments to physicians in some physician groups based upon a combination of their group’s relative quality and the relative cost of the care they provided during a performance period. The merit-based incentive payment system assigns a single composite score to each physician that incorporates components from the programs it replaces (cost, quality, and meaningful use) and a new component, practice improvement—which includes activities such as installing patient registries. Payment adjustments would be made based on how a provider’s score compares to others’ composite scores. Prior attempts to improve fee-for-service care through pay-for-performance programs have an unimpressive and inconsistent track record in terms of improving patient outcomes or lowering health care costs.6 But such programs mostly target primary care physicians and offer small bonuses for providing preventive services. The merit-based incentive payment system would differ from past pay-for-performance efforts in important ways, such as including specialty groups, which makes assessments of its likely impact difficult. Features of the merit-based incentive payment system that could bolster its effectiveness include the development of more robust and specialty-specific performance metrics addressing quality, resource use, and clinical practice improvement. In addition, the system would continue to encourage the use of EHRs meeting meaningful-use requirements. Furthermore, the development of quality measures is supposed to be consensual in nature, including participation by professional associations. Physicians would receive positive or negative payment adjustments under the merit-based incentive payment system if their composite score was higher or lower than others’ scores, respectively. Average performers would receive no payment adjustment. This structure is similar to that of the current Medicare value-based payment modifier described above. Moreover, incentive size matters, and incentives in the merit-based incentive payment system would be larger than was the case in most predecessor pay-for-performance programs, including the current value-based payment modiA p r i l 20 1 5
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Web First fier. In this case, incentives would range from −4 percent to 4 percent in 2018 and would increase to a range of −9 percent to 9 percent in 2021, with additional increases for the highest performers between 2018 and 2023.7 Incentives also depend on how important a payer is to the practice. Medicare is the largest payer in the United States, accounting for around 30 percent of physician revenues overall and far more for physicians in certain high-cost specialties such as cardiology, hematologyoncology, and nephrology.8 We think it likely that other payers would emulate the merit-based incentive payment system, which would magnify its incentive effects. Finally, public reporting of physician performance through the Physician Compare website of the Centers for Medicare and Medicaid Services (CMS) could further motivate physician improvement. However, physicians’ response to the meritbased incentive payment system could depend on whether the information provided on cost and quality performance was actionable and whether performance scores were considered credible. The complexity of the composite score could affect whether physicians perceive it as actionable. The methodological challenges to producing fair scores across physicians in different specialties, serving different patient populations, and in organizations of different sizes could lead to questions about its credibility and fairness. Finally, there is growing recognition that quality measurement can sometimes be counterproductive. Overly prescriptive process measures of quality have been criticized as insufficiently patient centered or evidence based. Critics also argue that the measures may divert physicians’ attention from less easily measured, but more important, aspects of clinical care and may diminish physicians’ intrinsic rewards from practicing medicine and their motivation for improvement.9,10 The lawmakers who crafted the 2014 SGR fix prioritized the development of specialty-specific quality metrics that focused on clinical care, safety, care coordination, patient and caregiver experience, and population health and prevention. However, most effective would be a limited number of meaningful, clinically relevant outcome measures, such as registry-based outcomes for specific procedures, tracking of patient-reported outcomes for commonly treated conditions, and patient experience of care.11
Alternative Payment Models The push by payers to embrace alternative payment models reflects recognition of the failings 69 2
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A missing piece in the proposals to fix the SGR is the failure to undertake fundamental work to revise the flawed fee schedule.
of fee-for-service reimbursement. Fee-for-service creates incentives to provide more services— especially high-profit ones—while failing to encourage high-quality, coordinated care. Alternative payment models incentivize highquality care at lower cost by taking a middle road between capitation (fixed payment per patient per time period) and fee-for-service payment.Yet the evidence on alternative payment models is mixed, which in part reflects the fact that many of these models remain in the testing and development phase. Some studies of alternative payment models have suffered from inadequate statistical power.12 A sample of evaluation studies from Medicare and other payers with key results are summarized in the online Appendix.5 Most alternative payment model initiatives will take years to realize their full effects. It will take time for provider organizations to make necessary infrastructure investments, hire new staff, develop care processes and quality reporting systems, and negotiate contractual arrangements. Moreover, clinicians may need to alter their mind-set and approach to patient care, evolving from responders to the clinical problem in front of them to participants in teams that proactively manage the constellations of patients’ health challenges. Provider organizations might not be able to achieve this change in perspective quickly. For example, Intermountain Healthcare—an integrated delivery system widely identified as a low-cost, high-quality provider—has continually worked to improve its quality and cost performance since 1988.13 Successful prepaid group practices like Kaiser Permanente have been perfecting their unique approaches to care delivery for even longer. Nevertheless, widespread interest in alternative payment models among commercial payers and state Medicaid programs will likely hasten
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the movement within Medicare to alternative payment models and may improve the prospects for their success. Because aligning providers’ incentives across multiple payers is likely to hasten change and encourage participation, several of CMS’s demonstrations are designed to be multipayer instead of just single payer (Medicare) for this reason. If multiple payers are involved in alternative payment models, the incentives physicians face to change to more valuebased practice are more uniform across payers, and hence stronger, while the fixed costs of transforming care delivery are spread over a greater share of their patients than if Medicare interventions operated in isolation. Accountable Care Organizations ACOs are organized groups of providers that take responsibility for the quality and costs of care for a defined patient population. There are 424 Medicare ACOs in forty-seven states, which collectively serve 7.8 million beneficiaries. CMS has reported $417 million in program savings since 2011.14 Despite interest among providers, implementation has proved slow and difficult. The organizations selected by CMS to participate in the Pioneer ACO program were those deemed most likely to succeed under payment arrangements in which they were at risk of losing or gaining money if costs exceeded or fell below benchmarks, respectively—an arrangement similar to that proposed in the 2014 SGR fix. Nonetheless, about a third of the Pioneer ACOs have dropped out of the program. Most of those ACOs have shifted to the Medicare Shared Savings Program, an ACO program that shares savings with the participants if costs fall more than 2 percent below benchmarks, but in which participants bear no financial liability if costs are above benchmarks during initial years of operation.15 Only about a quarter of the ACOs in this program have realized shared savings.16 Yet some commercial-sector ACOs have seen greater success in achieving value-based goals.17 Bundled Payment Bundled payment refers to arrangements in which payment is tied to all care delivered to patients being treated for a specific episode of care. Evaluations of bundled payment demonstrations have been mostly observational in nature. They provide mixed results, but most show cost savings.18 An early Medicare bundled payment demonstration found a 14 percent reduction in program costs associated with coronary bypass procedures.19 The current CMS bundled payment demonstration, the Bundled Payments for Care Improvement initiative, uses hospitalizations for forty-eight conditions to define bundles of services in four different models. Two cover care
only while the patient is hospitalized. The third adds services during the postdischarge period, and the fourth covers only care during the postdischarge period. The greatest interest among applicants has been in the third and fourth models, which suggests that many see opportunities for savings through better care transitions and improved management and use of postacute care.20 Evaluation results are not yet available. However, bundled payment also encourages a proliferation of bundles.18 This proliferation is likely to be an increasingly serious concern as CMS extends bundled payment to outpatient episodes of care. Medical Homes Studies have shown that robust primary care can achieve lower costs and superior patient outcomes, compared to what is achieved by the fragmented, specialty-oriented US health care system.21,22 Patient-centered medical home initiatives are intended to strengthen primary care for Medicare beneficiaries, especially for those with chronic conditions. Medical home evaluation results have also been mixed.12 First-year results from two large CMS multipayer medical home demonstrations were recently released.23 The Comprehensive Primary Care initiative of the Center for Medicare and Medicaid Innovation showed surprisingly strong results among 345,000 Medicare patients, with cost reductions that mostly covered the $10 per member per month care management fees paid to participating practices. In contrast, the Multi-Payer Advanced Primary Care Practice Demonstration showed very mixed results, although it achieved $4.2 million in cost savings across 400,000 Medicare beneficiaries. Some of the medical home initiatives that commercial payers and state Medicaid programs have implemented have also shown early promising results.24
Expanding Alternative Payment Models Current Medicare alternative payment models have not opened up opportunities for all specialties, physician groups, or locales. For instance, current bundled payment demonstrations are largely triggered by an inpatient admission, which excludes substantive participation by surgeons who predominantly provide outpatient procedures. Similarly, most patient-centered medical home models exclude specialists such as cardiologists and endocrinologists, who may be the principal physicians managing patients with relevant chronic conditions. ACOs may wish to limit participation to physicians actively managing patients with expensive conditions, contracting with other specialists when A p r i l 20 1 5
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45
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Increase
After accounting for inflation, Medicare physician spending per beneficiary rose 45 percent between 2000 and 2012.
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Web First needed. This limits the pool of providers across whom savings might be shared. The 2014 SGR fix called for the development of new alternative payment models that provide opportunities for specialists and those in small practices. CMS and specialty societies are considering new alternative payment model possibilities across many specialties.25 CMS is already testing an ACO-like model for patients with endstage renal disease, and commercial payers have tested oncology care ACOs.26 Bundled payment pilots for these two types of care are also being tested by Medicare and UnitedHealthcare, respectively.27 Consideration, however, should be given to the interaction of the alternative payment models. In particular, will specialty- or condition-specific models fragment care delivery and interfere with the development of ACOs’ whole-person population-based focus? Providing opportunities for small physician practices—particularly those in rural areas—to participate in alternative payment models will remain a challenge. Combining small practices into larger virtual organizations may hold some promise. The 2014 SGR fix would fund some technical assistance to small practices to improve merit-based incentive system scores or transition to alternative payment models. However, the limited resources that many small practices have to finance care transformation may require direct financial assistance or greater in-kind resources such as practice facilitators or care coordinators.28
Correcting Medicare’s Fee Schedule The reimbursement that physicians receive for specific clinical services is largely based on relative value scales, which are measures of the time and effort required by an efficient provider to perform different services. Relative values were originally developed in the late 1980s. CMS updates them annually, adding new services and revaluing others—for example, because physicians have become more efficient at performing a procedure with experience or as a result of new technology. But CMS relies heavily on recommendations from the American Medical Association’s Relative Value Update Committee, and most observers agree that relative values have become increasingly distorted over time.29 Fixing inaccurate valuations in the Medicare fee schedule will be vitally important to the success of the 2014 SGR fix. It is generally accepted that cognitive services (that is, evaluation and management visits) are undervalued in the fee schedule, while many procedures performed by specialists are overvalued.29–31 This adversely 69 4
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affects primary care physicians the most and hinders medical home development.31 Other proposals to fix the SGR have specifically addressed the undervaluation of primary care services.30 Inaccurate valuations would make it easier for some physicians, particularly specialists, to maintain incomes in the fee-for-service pathway by shifting the mix of services they provide to favor high-profit procedures, despite low fee updates.32 History has shown that despite the fact that inflation-adjusted Medicare fees, for instance, fell between 2000 and 2012, Medicare physician spending per beneficiary has risen rapidly—more than 45 percent, after accounting for inflation.33 The proposed merit-based incentive payment system would reduce the return on using inaccurate fee schedule valuations and other methods to increase fee-for-service revenues, because the highest-cost providers would be penalized up to 2.7 percent of their revenue by 2021. However, some physicians may still prefer to increase their Medicare revenues this way, instead of taking the alternative payment model pathway. Correcting service valuations would help close this avenue. Correcting valuations would also ensure the proper operation of alternative payment models. This is because fee-for-service remains the base payment method under alternative payment models. Inaccurately valued services could continue to distort clinical decisions at the point of care among those participating in alternative payment models, reducing cost and quality improvement potential—particularly if physicians earn fee-for-service income for services they personally render but share in the rewards or penalties of their organization’s cost performance. Moreover, benchmarks for assessing shared savings or costs in alternative payment models are based on patient expenditures under fee-forservice. Inaccurate valuations in the fee schedule can thus distort alternative payment model benchmarks and consequently incentives and opportunities for realizing cost savings.31 The 2014 SGR fix contained language that set targets for CMS’s identification and adjusting of inaccurately valued services. (This provision was incorporated into the Protecting Access to Medicare Act of 2014.) However, the act appropriated few funds for CMS to improve the accuracy of the fee schedule. Other experts have long urged CMS to be more proactive in identifying and correcting inaccurately valued services.34 Correcting fee schedule valuations will be a substantial and controversial undertaking. But it is one that is vitally important to the SGR fix’s prospects for success and requires greater focus and support. Finally, the low annual fee updates could prove
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unsustainable to ensure beneficiary access. Alternative payment models will need to ensure that physicians’ revenues can keep up with costs, and physicians unable to get on the alternative payment model pathway may need special consideration.
Conclusion The 2014 SGR fix, which failed to become law last year, contained important, though incremental, changes to current efforts to introduce a valuebased component into fee-for-service Medicare and to promote alternative, value-based payment models. As we have argued, a missing piece in the proposals to fix the SGR is the failure to undertake fundamental work to revise the flawed fee schedule. Mark McClellan and colleagues have also noted that incentives are expressed as percentage changes to fee-for-service payments, counteracting the goal of the legislation to weaken the influence of fee-for service.11 Making fundamental changes to the health care system will inevitably be a slow, uneven, and difficult evolutionary process. CMS has not stood still during the past year, however. It continues to refine its implementation of the
value-based payment modifier authorized in the ACA. Medicare also has existing authority to fine-tune the implementation of alternative payment models and to change provider payment to support beneficial services. The recent proposed changes to the Medicare Shared Savings Program and the implementation in 2015 of the chronic care management fee (to reward care coordination for patients with chronic illnesses) are examples of CMS’s ability to strengthen alternative payment models and reform the physician payment schedule without legislative action.35,36 Furthermore, CMS has broad authority to test alternative payment models that, if they prove effective in controlling costs and enhancing quality, can become the basis for broader provider payment reform. Accordingly, the Department of Health and Human Services recently announced ambitious goals for the expanded testing and application of alternative payment models.37 Nonetheless, the 2014 SGR fix, if passed, would provide CMS with substantive additional mechanisms and resources it could use to hasten the development of alternative payment models that hold the promise of lowering costs and improving care. ▪
The authors thank the Commonwealth Fund for its financial support, and Timothy Lake, Stuart Guterman, and Mark Zezza for their review and helpful comments on an earlier draft of this article. [Published online March 11, 2015.]
NOTES 1 Hahn J, Mulvey J. Medicare physician payment updates and the Sustainable Growth Rate (SGR) system [Internet]. Washington (DC): Congressional Research Service; 2012 Aug 2 [cited 2015 Feb 25]. Available from: http://thornberry.house.gov/ uploadedfiles/r40907.pdf 2 Elmendorf DW. Letter to Fred Upton [Internet]. Washington (DC): Congressional Budget Office; 2014 Feb 27 [cited 2015 Feb 25]. Available from: http://www.cbo.gov/sites/ default/files/hr4015.pdf 3 Congressional Budget Office. Medicare’s payment to physicians: the budgetary effects of alternative policies relative to CBO’s January 2015 baseline [Internet]. Washington (DC): CBO; [corrected 2015 Feb 3; cited 2015 Feb 25]. Available from: https://www.cbo.gov/sites/default/ files/cbofiles/attachments/49923SGR_Options.pdf 4 Author’s calculation based on 2012 Medicare Part B professional services claims data. 5 To access the Appendix, click on the
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mission. Report to the Congress: Medicare and the health care delivery system [Internet]. Washington (DC): MedPAC; 2011 Jun [cited 2015 Feb 25]. Chapter 3. Available from: http://www.medpac.gov/ documents/reports/Jun11_Entire Report.pdf?sfvrsn=0 Ginsburg PB. Fee-for-service will remain a feature of major payment reforms, requiring more changes in Medicare physician payment. Health Aff (Millwood). 2012; 31(9): 1977–83. Hadley J, Reschovsky JD. Medicare fees and physicians’ Medicare service volume: beneficiaries treated and services per beneficiary. Int J Health Care Finance Econ. 2006; 6(2):131–50. Medicare Payment Advisory Commission. A data book: health care spending and the Medicare program [Internet]. Washington (DC): MedPAC; 2014 Jun [cited 2015 Feb 25]. Available from: http://www .medpac.gov/documents/ publications/jun14databookentire report.pdf?sfvrsn=1 Cromwell J, McCall N, Dalton K, Braun P. Missing productivity gains in the Medicare physician fee schedule: where are they? Med Care Res Rev. 2010;67(6):676–93. CMS.gov. Fact sheets: proposed changes to the Medicare Shared Savings Program regulations [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; 2014 Dec 1 [cited 2015 Feb 25] Available from http://www.cms.gov/ Newsroom/MediaReleaseDatabase/ Fact-sheets/2014-Fact-sheets-items/ 2014-12-01.html CMS.gov. Fact sheets: proposed policy and payment changes to the Medicare Physician Fee Schedule for calendar year 2015 [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; 2014 Jul 3 [cited 2015 Feb 25]. Available from http://www.cms.gov/Newsroom/ MediaReleaseDatabase/Fact-sheets/ 2014-Fact-sheets-items/2014-0703-1.html HHS.gov [Internet]. Washington (DC): Department of Health and Human Services. News release, Better, smarter, healthier: in historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value; 2015 Jan 26 [cited 2015 Feb 25]. Available from http://www .hhs.gov/news/press/2015pres/01/ 20150126a.html
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Web First By James D. Reschovsky, Larisa Converse, and Eugene C. Rich 10.1377/hlthaff.2014.1429 HEALTH AFFAIRS 34, NO. 4 (2015): 689–696 ©2015 Project HOPE— The People-to-People Health Foundation, Inc.
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Solving The Sustainable Growth Rate Formula Conundrum Continues Steps Toward Cost Savings And Care Improvements
James D. Reschovsky ([email protected]) is a senior fellow at Mathematica Policy Research in Washington, D.C.
Congress is again attempting to repeal the Sustainable Growth Rate (SGR) formula. The formula is a failed mechanism intended to constrain Medicare Part B physician spending by adjusting annual physician fee updates. Congress has averted formula-driven physician fee cuts each year beginning in 2003 by overriding the SGR, usually accompanied with last-minute disputes about how these overrides should be paid for. Last year Congress achieved bipartisan and bicameral agreement on legislation to replace the SGR—the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which we refer to as the “2014 SGR fix”—but was unable to find a way to pay for the legislation under current budget rules. Current congressional deliberations appear focused on how to pay for the fix, with wide consensus that the 2014 legislation should remain the basic model for reform. We describe key features of the 2014 SGR fix, place it in the context of both past and ongoing Medicare health policy, assess its strengths and weaknesses as a mechanism to foster improved care and lower costs in Medicare, and suggest further actions to ensure success in meeting these goals. ABSTRACT
T
he Sustainable Growth Rate (SGR) formula, which has been in place since 1998, was intended to constrain Medicare spending by adjusting annual physician fee updates. The adjustments are derived by calculating the cumulative rate of physician spending relative to a target based on growth in the gross domestic product.1 The mechanism has been widely criticized as both ineffective and inequitable. Because the fee updates must be adjusted for the cumulative variance between actual spending and target spending, the next proposed SGR fee cut, which is to take effect on April 1, 2015, would dictate a 21.2 percent cut in physician fees.
Larisa Converse is a research analyst at Mathematica Policy Research. Eugene C. Rich is a senior fellow at Mathematica Policy Research.
Such large physician fee cuts could jeopardize Medicare beneficiaries’ access to their physicians if the lower fees prompted some physicians to stop seeing Medicare beneficiaries. To avoid such a scenario, Congress has consistently overridden the formulaic SGR cuts since a 4.8 percent cut was made in 2002 (Exhibit 1). The lastminute nature of many of these temporary SGR overrides has frequently produced contentious political battles over how to pay for them. Meanwhile, physicians’ fees have not kept pace with inflation, as physicians have received either no fee updates or only small ones.1 The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015 and S. 2000), which we refer to as the “2014 SGR fix,” A p r i l 20 1 5
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Web First Exhibit 1 Updates In The Physician Fee Schedule Mandated By The Sustainable Growth Rate (SGR) Formula And Legislated By Congress, 2003–15
SOURCE Hahn J. Medicare physician payment updates and the Sustainable Growth Rate (SGR) system [Internet]. Washington (DC): Congressional Research Service; 2014 Jun 12 [cited 2015 Feb 28]. Available from: http://greenbook.waysandmeans.house.gov/ sites/greenbook.waysandmeans.house.gov/files/R40907_gb.pdf.
obtained both bipartisan and bicameral support in congressional committees for its substantive features in March 2014. However, the legislation never reached the Senate floor because Democrats and Republicans could not agree on how to pay for its cost. At the time, the Congressional Budget Office (CBO) estimated the ten-year cost of the legislation at $138 billion.2 The CBO’s estimate was updated this year to $174.5 billion.3 Some members of Congress have returned to the SGR fix this year. They appear to be using the 2014 legislation as a framework, although at this writing no new legislation has been introduced in Congress. Some members of Congress contend that the SGR fix should not have to be paid for with offsetting spending cuts or revenue increases. However, such arguments are unlikely to prevail in the current Congress. We describe and critically review the 2014 SGR fix’s provisions and place the legislation in the context of other efforts to reform clinician payment.
The 2014 SGR Fix: Background The 2014 SGR fix affects what it calls “eligible professionals,” which include physicians, physician assistants, nurse practitioners, clinical nurse specialists, and therapists who treat Medicare patients. We use physicians as a shorthand 69 0
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term, since they bill for about 73 percent of Medicare Part B spending on professional services.4 The 2014 SGR fix presents physicians with two payment pathways: one for those paid primarily by fee-for-service reimbursement and one for those whom the 2014 SGR fix describes as “significantly” involved in value-based alternative payment models, such as accountable care organizations (ACOs), bundled payment arrangements, and patient-centered medical homes. Provisions of the 2014 SGR fix encourage the second pathway. Details are available in the online Appendix.5 In both pathways, the 2014 SGR fix would replace the SGR with statutorily specified fee increases: There would be 0.5 percent annual fee increases from 2014 to 2018. Between 2019 and 2023 there would be no annual fee increases, but physicians on the alternative payment model pathway would receive a 5 percent bonus on their Medicare payments. Finally, from 2024 onward, fee-for-service pathway physicians would receive annual fee increases of 0.5 percent. Those on the alternative payment model pathway would receive annual increases of 1 percent—twice as large. For this analysis, we have used the dates in the 2014 SGR fix. Dates will likely be moved forward one year if legislation similar to that is passed in 2015.
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Physicians on the fee-for-service pathway would be subject to the merit-based incentive payment system, a new pay-for-performance program that would enhance and consolidate three current Medicare physician incentive programs, as described below. Most physicians on the alternative payment model pathway would be required to receive “significant” revenue through certified payment or delivery mechanisms that require the use of electronic health records (EHRs) and quality performance standards and that involve financial risk based on cost performance. (For physicians on this pathway, significant revenue is defined as 25 percent of Medicare revenue in 2018, increasing in 2022 to 75 percent of either Medicare revenue or total revenue.) In other words, payments could be adjusted down or up if patient costs were higher or lower, respectively, than benchmark values (typically based on comparable risk-adjusted fee-for-service costs). Physicians on this pathway who participate in medical homes would not be required to bear downside risk (that is, they would not have to forgo revenues if costs exceeded benchmarks). However, they would still be required to meet other value-based criteria. Repeal of the SGR would give physicians certainty concerning payment and would rid Congress of a failed cost control policy that has turned into a political and budgetary albatross. In addition to repealing the SGR, the 2014 SGR fix would encourage physicians to abandon traditional fee-for-service reimbursement in favor of value-based payment arrangements that promise to improve care and lower costs. Yet future cost savings did not figure into the CBO’s estimates of the legislation’s costs. The legislation’s potential to improve care and lower costs depends on whether the proposed merit-based incentive payment system is capable of reducing cost growth and improving care for patients treated by physicians on the fee-forservice pathway, whether physicians on the alternative payment model pathway will succeed in achieving improved care quality and lower costs, and whether incentives are sufficient to move physicians to that pathway.
Merit-Based Incentive Payment System The merit-based incentive payment system— which would cover physicians not on the alternative payment model pathway—aims to weaken perverse fee-for-service incentives through an enhanced value-based pay-for-performance component that would also encourage practice improvements to make future participation in
the alternative payment model pathway easier. The merit-based incentive payment system would consolidate and enhance three current programs. The first two impose penalties for physicians who fail to report quality measures and those who fail to use EHRs that meet meaningful-use requirements. The third is the valuebased payment modifier, established by a provision of the Affordable Care Act (ACA). Starting this year, the modifier adjusts payments to physicians in some physician groups based upon a combination of their group’s relative quality and the relative cost of the care they provided during a performance period. The merit-based incentive payment system assigns a single composite score to each physician that incorporates components from the programs it replaces (cost, quality, and meaningful use) and a new component, practice improvement—which includes activities such as installing patient registries. Payment adjustments would be made based on how a provider’s score compares to others’ composite scores. Prior attempts to improve fee-for-service care through pay-for-performance programs have an unimpressive and inconsistent track record in terms of improving patient outcomes or lowering health care costs.6 But such programs mostly target primary care physicians and offer small bonuses for providing preventive services. The merit-based incentive payment system would differ from past pay-for-performance efforts in important ways, such as including specialty groups, which makes assessments of its likely impact difficult. Features of the merit-based incentive payment system that could bolster its effectiveness include the development of more robust and specialty-specific performance metrics addressing quality, resource use, and clinical practice improvement. In addition, the system would continue to encourage the use of EHRs meeting meaningful-use requirements. Furthermore, the development of quality measures is supposed to be consensual in nature, including participation by professional associations. Physicians would receive positive or negative payment adjustments under the merit-based incentive payment system if their composite score was higher or lower than others’ scores, respectively. Average performers would receive no payment adjustment. This structure is similar to that of the current Medicare value-based payment modifier described above. Moreover, incentive size matters, and incentives in the merit-based incentive payment system would be larger than was the case in most predecessor pay-for-performance programs, including the current value-based payment modiA p r i l 20 1 5
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Web First fier. In this case, incentives would range from −4 percent to 4 percent in 2018 and would increase to a range of −9 percent to 9 percent in 2021, with additional increases for the highest performers between 2018 and 2023.7 Incentives also depend on how important a payer is to the practice. Medicare is the largest payer in the United States, accounting for around 30 percent of physician revenues overall and far more for physicians in certain high-cost specialties such as cardiology, hematologyoncology, and nephrology.8 We think it likely that other payers would emulate the merit-based incentive payment system, which would magnify its incentive effects. Finally, public reporting of physician performance through the Physician Compare website of the Centers for Medicare and Medicaid Services (CMS) could further motivate physician improvement. However, physicians’ response to the meritbased incentive payment system could depend on whether the information provided on cost and quality performance was actionable and whether performance scores were considered credible. The complexity of the composite score could affect whether physicians perceive it as actionable. The methodological challenges to producing fair scores across physicians in different specialties, serving different patient populations, and in organizations of different sizes could lead to questions about its credibility and fairness. Finally, there is growing recognition that quality measurement can sometimes be counterproductive. Overly prescriptive process measures of quality have been criticized as insufficiently patient centered or evidence based. Critics also argue that the measures may divert physicians’ attention from less easily measured, but more important, aspects of clinical care and may diminish physicians’ intrinsic rewards from practicing medicine and their motivation for improvement.9,10 The lawmakers who crafted the 2014 SGR fix prioritized the development of specialty-specific quality metrics that focused on clinical care, safety, care coordination, patient and caregiver experience, and population health and prevention. However, most effective would be a limited number of meaningful, clinically relevant outcome measures, such as registry-based outcomes for specific procedures, tracking of patient-reported outcomes for commonly treated conditions, and patient experience of care.11
Alternative Payment Models The push by payers to embrace alternative payment models reflects recognition of the failings 69 2
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A missing piece in the proposals to fix the SGR is the failure to undertake fundamental work to revise the flawed fee schedule.
of fee-for-service reimbursement. Fee-for-service creates incentives to provide more services— especially high-profit ones—while failing to encourage high-quality, coordinated care. Alternative payment models incentivize highquality care at lower cost by taking a middle road between capitation (fixed payment per patient per time period) and fee-for-service payment.Yet the evidence on alternative payment models is mixed, which in part reflects the fact that many of these models remain in the testing and development phase. Some studies of alternative payment models have suffered from inadequate statistical power.12 A sample of evaluation studies from Medicare and other payers with key results are summarized in the online Appendix.5 Most alternative payment model initiatives will take years to realize their full effects. It will take time for provider organizations to make necessary infrastructure investments, hire new staff, develop care processes and quality reporting systems, and negotiate contractual arrangements. Moreover, clinicians may need to alter their mind-set and approach to patient care, evolving from responders to the clinical problem in front of them to participants in teams that proactively manage the constellations of patients’ health challenges. Provider organizations might not be able to achieve this change in perspective quickly. For example, Intermountain Healthcare—an integrated delivery system widely identified as a low-cost, high-quality provider—has continually worked to improve its quality and cost performance since 1988.13 Successful prepaid group practices like Kaiser Permanente have been perfecting their unique approaches to care delivery for even longer. Nevertheless, widespread interest in alternative payment models among commercial payers and state Medicaid programs will likely hasten
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the movement within Medicare to alternative payment models and may improve the prospects for their success. Because aligning providers’ incentives across multiple payers is likely to hasten change and encourage participation, several of CMS’s demonstrations are designed to be multipayer instead of just single payer (Medicare) for this reason. If multiple payers are involved in alternative payment models, the incentives physicians face to change to more valuebased practice are more uniform across payers, and hence stronger, while the fixed costs of transforming care delivery are spread over a greater share of their patients than if Medicare interventions operated in isolation. Accountable Care Organizations ACOs are organized groups of providers that take responsibility for the quality and costs of care for a defined patient population. There are 424 Medicare ACOs in forty-seven states, which collectively serve 7.8 million beneficiaries. CMS has reported $417 million in program savings since 2011.14 Despite interest among providers, implementation has proved slow and difficult. The organizations selected by CMS to participate in the Pioneer ACO program were those deemed most likely to succeed under payment arrangements in which they were at risk of losing or gaining money if costs exceeded or fell below benchmarks, respectively—an arrangement similar to that proposed in the 2014 SGR fix. Nonetheless, about a third of the Pioneer ACOs have dropped out of the program. Most of those ACOs have shifted to the Medicare Shared Savings Program, an ACO program that shares savings with the participants if costs fall more than 2 percent below benchmarks, but in which participants bear no financial liability if costs are above benchmarks during initial years of operation.15 Only about a quarter of the ACOs in this program have realized shared savings.16 Yet some commercial-sector ACOs have seen greater success in achieving value-based goals.17 Bundled Payment Bundled payment refers to arrangements in which payment is tied to all care delivered to patients being treated for a specific episode of care. Evaluations of bundled payment demonstrations have been mostly observational in nature. They provide mixed results, but most show cost savings.18 An early Medicare bundled payment demonstration found a 14 percent reduction in program costs associated with coronary bypass procedures.19 The current CMS bundled payment demonstration, the Bundled Payments for Care Improvement initiative, uses hospitalizations for forty-eight conditions to define bundles of services in four different models. Two cover care
only while the patient is hospitalized. The third adds services during the postdischarge period, and the fourth covers only care during the postdischarge period. The greatest interest among applicants has been in the third and fourth models, which suggests that many see opportunities for savings through better care transitions and improved management and use of postacute care.20 Evaluation results are not yet available. However, bundled payment also encourages a proliferation of bundles.18 This proliferation is likely to be an increasingly serious concern as CMS extends bundled payment to outpatient episodes of care. Medical Homes Studies have shown that robust primary care can achieve lower costs and superior patient outcomes, compared to what is achieved by the fragmented, specialty-oriented US health care system.21,22 Patient-centered medical home initiatives are intended to strengthen primary care for Medicare beneficiaries, especially for those with chronic conditions. Medical home evaluation results have also been mixed.12 First-year results from two large CMS multipayer medical home demonstrations were recently released.23 The Comprehensive Primary Care initiative of the Center for Medicare and Medicaid Innovation showed surprisingly strong results among 345,000 Medicare patients, with cost reductions that mostly covered the $10 per member per month care management fees paid to participating practices. In contrast, the Multi-Payer Advanced Primary Care Practice Demonstration showed very mixed results, although it achieved $4.2 million in cost savings across 400,000 Medicare beneficiaries. Some of the medical home initiatives that commercial payers and state Medicaid programs have implemented have also shown early promising results.24
Expanding Alternative Payment Models Current Medicare alternative payment models have not opened up opportunities for all specialties, physician groups, or locales. For instance, current bundled payment demonstrations are largely triggered by an inpatient admission, which excludes substantive participation by surgeons who predominantly provide outpatient procedures. Similarly, most patient-centered medical home models exclude specialists such as cardiologists and endocrinologists, who may be the principal physicians managing patients with relevant chronic conditions. ACOs may wish to limit participation to physicians actively managing patients with expensive conditions, contracting with other specialists when A p r i l 20 1 5
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45
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After accounting for inflation, Medicare physician spending per beneficiary rose 45 percent between 2000 and 2012.
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Web First needed. This limits the pool of providers across whom savings might be shared. The 2014 SGR fix called for the development of new alternative payment models that provide opportunities for specialists and those in small practices. CMS and specialty societies are considering new alternative payment model possibilities across many specialties.25 CMS is already testing an ACO-like model for patients with endstage renal disease, and commercial payers have tested oncology care ACOs.26 Bundled payment pilots for these two types of care are also being tested by Medicare and UnitedHealthcare, respectively.27 Consideration, however, should be given to the interaction of the alternative payment models. In particular, will specialty- or condition-specific models fragment care delivery and interfere with the development of ACOs’ whole-person population-based focus? Providing opportunities for small physician practices—particularly those in rural areas—to participate in alternative payment models will remain a challenge. Combining small practices into larger virtual organizations may hold some promise. The 2014 SGR fix would fund some technical assistance to small practices to improve merit-based incentive system scores or transition to alternative payment models. However, the limited resources that many small practices have to finance care transformation may require direct financial assistance or greater in-kind resources such as practice facilitators or care coordinators.28
Correcting Medicare’s Fee Schedule The reimbursement that physicians receive for specific clinical services is largely based on relative value scales, which are measures of the time and effort required by an efficient provider to perform different services. Relative values were originally developed in the late 1980s. CMS updates them annually, adding new services and revaluing others—for example, because physicians have become more efficient at performing a procedure with experience or as a result of new technology. But CMS relies heavily on recommendations from the American Medical Association’s Relative Value Update Committee, and most observers agree that relative values have become increasingly distorted over time.29 Fixing inaccurate valuations in the Medicare fee schedule will be vitally important to the success of the 2014 SGR fix. It is generally accepted that cognitive services (that is, evaluation and management visits) are undervalued in the fee schedule, while many procedures performed by specialists are overvalued.29–31 This adversely 69 4
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affects primary care physicians the most and hinders medical home development.31 Other proposals to fix the SGR have specifically addressed the undervaluation of primary care services.30 Inaccurate valuations would make it easier for some physicians, particularly specialists, to maintain incomes in the fee-for-service pathway by shifting the mix of services they provide to favor high-profit procedures, despite low fee updates.32 History has shown that despite the fact that inflation-adjusted Medicare fees, for instance, fell between 2000 and 2012, Medicare physician spending per beneficiary has risen rapidly—more than 45 percent, after accounting for inflation.33 The proposed merit-based incentive payment system would reduce the return on using inaccurate fee schedule valuations and other methods to increase fee-for-service revenues, because the highest-cost providers would be penalized up to 2.7 percent of their revenue by 2021. However, some physicians may still prefer to increase their Medicare revenues this way, instead of taking the alternative payment model pathway. Correcting service valuations would help close this avenue. Correcting valuations would also ensure the proper operation of alternative payment models. This is because fee-for-service remains the base payment method under alternative payment models. Inaccurately valued services could continue to distort clinical decisions at the point of care among those participating in alternative payment models, reducing cost and quality improvement potential—particularly if physicians earn fee-for-service income for services they personally render but share in the rewards or penalties of their organization’s cost performance. Moreover, benchmarks for assessing shared savings or costs in alternative payment models are based on patient expenditures under fee-forservice. Inaccurate valuations in the fee schedule can thus distort alternative payment model benchmarks and consequently incentives and opportunities for realizing cost savings.31 The 2014 SGR fix contained language that set targets for CMS’s identification and adjusting of inaccurately valued services. (This provision was incorporated into the Protecting Access to Medicare Act of 2014.) However, the act appropriated few funds for CMS to improve the accuracy of the fee schedule. Other experts have long urged CMS to be more proactive in identifying and correcting inaccurately valued services.34 Correcting fee schedule valuations will be a substantial and controversial undertaking. But it is one that is vitally important to the SGR fix’s prospects for success and requires greater focus and support. Finally, the low annual fee updates could prove
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unsustainable to ensure beneficiary access. Alternative payment models will need to ensure that physicians’ revenues can keep up with costs, and physicians unable to get on the alternative payment model pathway may need special consideration.
Conclusion The 2014 SGR fix, which failed to become law last year, contained important, though incremental, changes to current efforts to introduce a valuebased component into fee-for-service Medicare and to promote alternative, value-based payment models. As we have argued, a missing piece in the proposals to fix the SGR is the failure to undertake fundamental work to revise the flawed fee schedule. Mark McClellan and colleagues have also noted that incentives are expressed as percentage changes to fee-for-service payments, counteracting the goal of the legislation to weaken the influence of fee-for service.11 Making fundamental changes to the health care system will inevitably be a slow, uneven, and difficult evolutionary process. CMS has not stood still during the past year, however. It continues to refine its implementation of the
value-based payment modifier authorized in the ACA. Medicare also has existing authority to fine-tune the implementation of alternative payment models and to change provider payment to support beneficial services. The recent proposed changes to the Medicare Shared Savings Program and the implementation in 2015 of the chronic care management fee (to reward care coordination for patients with chronic illnesses) are examples of CMS’s ability to strengthen alternative payment models and reform the physician payment schedule without legislative action.35,36 Furthermore, CMS has broad authority to test alternative payment models that, if they prove effective in controlling costs and enhancing quality, can become the basis for broader provider payment reform. Accordingly, the Department of Health and Human Services recently announced ambitious goals for the expanded testing and application of alternative payment models.37 Nonetheless, the 2014 SGR fix, if passed, would provide CMS with substantive additional mechanisms and resources it could use to hasten the development of alternative payment models that hold the promise of lowering costs and improving care. ▪
The authors thank the Commonwealth Fund for its financial support, and Timothy Lake, Stuart Guterman, and Mark Zezza for their review and helpful comments on an earlier draft of this article. [Published online March 11, 2015.]
NOTES 1 Hahn J, Mulvey J. Medicare physician payment updates and the Sustainable Growth Rate (SGR) system [Internet]. Washington (DC): Congressional Research Service; 2012 Aug 2 [cited 2015 Feb 25]. Available from: http://thornberry.house.gov/ uploadedfiles/r40907.pdf 2 Elmendorf DW. Letter to Fred Upton [Internet]. Washington (DC): Congressional Budget Office; 2014 Feb 27 [cited 2015 Feb 25]. Available from: http://www.cbo.gov/sites/ default/files/hr4015.pdf 3 Congressional Budget Office. Medicare’s payment to physicians: the budgetary effects of alternative policies relative to CBO’s January 2015 baseline [Internet]. Washington (DC): CBO; [corrected 2015 Feb 3; cited 2015 Feb 25]. Available from: https://www.cbo.gov/sites/default/ files/cbofiles/attachments/49923SGR_Options.pdf 4 Author’s calculation based on 2012 Medicare Part B professional services claims data. 5 To access the Appendix, click on the
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Appendix link in the box to the right of the article online. Sorbero ME, Damberg CL, Shaw R, Teleki SS, Lovejoy SL, Decristofaro AH, et al. Assessment of pay-forperformance options for Medicare physician services: final report [Internet]. Santa Monica (CA): RAND; 2006 May [cited 2015 Feb 25]. (Working Paper). Available from: http://www.rand.org/content/dam/ rand/pubs/working_papers/2010/ RAND_WR391.pdf Jha AK. Time to get serious about pay for performance. JAMA. 2013; 309(4):347–8. Lasser KE, Woolhandler S, Himmelstein DU. Sources of U.S. physician income: the contribution of government payments to the specialist-generalist income gap. J Gen Intern Med. 2008;23(9): 1477–81. Berenson RA, Pronovost PJ, Krumholz HM. Achieving the potential of health care performance measures [Internet]. Princeton (NJ): Robert Wood Johnson Foundation;
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2013 May [accessed 2015 Feb 25]. Available from: http://www.rwjf .org/content/dam/farm/reports/ issue_briefs/2013/rwjf406195 Cassel CK, Jain SH. Assessing individual physician performance: does measurement suppress motivation? JAMA. 2012;307(24):2595–6. McClellan M, Berenson R, Chernew M, Kramer W, Lansky W, Milstein A. Medicare physician payment reform: securing the connection between value and payment [Internet]. Washington (DC): Brookings Institution; 2015 Jan [cited 2015 Feb 25]. (Health Policy Issue Brief). Available from: http://www.brookings.edu/~/ media/research/files/papers/2015/ 01/012715-medicare-physicianpayment-refom-web.pdf Peikes D, Zutshi A, Genevro JL, Parchman ML, Meyers DS. Early evaluations of the medical home: building on a promising start. Am J Manag Care. 2012;18(2):105–16. James BC, Savitz LA. How Intermountain trimmed health care costs through robust quality improvement
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efforts. Health Aff (Millwood). 2011; 30(6):1185–91. CMS.gov. Fact sheets: better care, smarter spending, healthier people: improving our health care delivery system [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; 2015 Jan 26 [cited 2015 Feb 25]. Available from: http:// www.cms.gov/Newsroom/Media ReleaseDatabase/Fact-sheets/2015Fact-sheets-items/2015-01-26.html Evans M. Medicare’s Pioneer program down to 19 ACOs after three more exit. Modern Healthcare [serial on the Internet]. 2014 Sep 25 [cited 2015 Feb 13]. Available from: http://www.modernhealthcare .com/article/20140925/NEWS/ 309259938 CMS.gov. Fact sheets: Medicare ACOs continue to succeed in improving care, lowering cost growth [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; 2014 Sep 16 [cited 2015 Feb 25]. Available from: http://www.cms .gov/Newsroom/MediaRelease Database/Fact-sheets/2014-Factsheets-items/2014-09-16.html Song Z, Rose S, Safran DG, Landon BE, Day MP, Chernew ME. Changes in health care spending and quality 4 years into global payment. N Engl J Med. 2014;371(18):1704–14. Hussey PS, Mulcahy AW, Schnyer C, Schneider EC. Bundled payment: effects on health care spending and quality: closing the quality gap: revisiting the state of the science [Internet]. Rockville (MD): Agency for Healthcare Research and Quality; 2012 Aug [cited 2015 Feb 25]. (AHRQ Publication No. 12-E007EF). Available from: http://www .ncbi.nlm.nih.gov/books/n/ erta208v1/pdf/ Cromwell J, Dayhoff DA, Thoumaian AH. Cost savings and physician responses to global bundled payments for Medicare heart bypass surgery. Health Care Financ Rev. 1997;19(1): 41–57. CMS.gov. BPCI initiative episodes: details on the participating health care facilities [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; [cited 2015 Feb 25]. Available from: http:// innovation.cms.gov/initiatives/ Bundled-Payments/ParticipatingHealth-Care-Facilities/index.html Friedberg MW, Hussey PS, Schneider EC. Primary care: a critical review of the evidence on quality and costs of health care. Health Aff (Millwood). 2010;29(5):766–72.
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