It would have been easy to miss it with the frenzied activity around the Senate health care bills these past few weeks, but on June 20, the Centers for Medicare and Medicaid Services (CMS) released a proposed regulation laying out updated rules for year two of the Quality Payment Program (QPP) that was created by the 2015 passage of the Medicare Access and CHIP Reauthorization Act (MACRA). This rule changes how Medicare pays physicians to shift the focus of their care delivery from volume to value. (If you need a refresher on the QPP, check out our previous blogs on the program here and here).

The release of this rule has been much anticipated, as it provides some of the earliest indications of whether, and how, the Trump administration plans on advancing value-based payments. Coming in at just over 1,000 pages, it’s a long and complex rule, but we’ve read through it so you don’t have to (CMS has released a more manageable fact sheet that lays out some of the proposed changes). There is a lot in there, but we want to draw your attention to a few areas that we feel are of particular importance to consumer advocates and anyone working with populations with complex medical and social needs. Here are our four takeaways from the proposed rule:

1.)    The transition from paying for volume to paying for value continues, albeit a little more slowly.

While it’s still too early to fully judge how aggressively the Department of Health and Human Services plans on pursuing value-based payment under Secretary Price’s leadership, this rule indicates an increased willingness to provide flexibility to clinicians and slow the pace of transition. It increases the number of physicians who are exempt from adopting the Merit-based Incentive Payment System (MIPS) and includes several provisions that simplify requirements for physicians. These include allowing hospital-based physicians to report on quality and cost measures at the facility level, easing electronic health record requirements, and allowing small practices to report as part of “virtual groups.” The implications of this flexibility on consumers is still uncertain and likely to be a mixed bag. Simplifying requirements to make it easier for physicians to participate, particularly physicians in small practices or rural areas could mean more consumers will benefit from efforts to provide higher quality care. However this benefit may be counterbalanced by provisions that exempt additional providers from the program. Additionally, given the new administration’s openness to relaxing QPP requirements, it will be important to continue watching for any further changes that might threaten patient protections and safeguards.

The rule states that CMS expects that the QPP will continue to “evolve” to better meet its goals, so it’s likely that more changes are to come in the future and we’ll continue get a better idea of how the new administration views value-based payment initiatives.

2.)    There isn’t much focus on consumer engagement.

As we’ve stated before, the QPP represents a major shift in how health care is delivered and paid for in the U.S. and it will bring about significant changes in the care millions of consumers receive. The ultimate success of the QPP requires educating consumers about what these changes mean for how their care is delivered, effectively empowering them to engage in their own health care decisions, and engaging them actively in the implementation of new models of care and payment to ensure these will be as patient-centered as possible. This proposed rule does little to strengthen consumer engagement requirements beyond what was in previous rules.

3.)    CMS is still struggling with how to account for patients with complex medical and social needs.

One issue CMS continues to wrestle with in this rule is how to account for patients with complex medical and social needs. It’s important to ensure that payments to clinicians fairly account for patient population characteristics that may affect quality scores or resource use, including clinical factors and sociodemographic factors such as income, race and educational attainment levels. Failure to adequately adjust payments to account for these widely varying factors may result in a shift in resources away from practices that disproportionately serve high-cost high-need vulnerable populations and may, over time, give providers a disincentive to continue serving these patients. At the same time, it is important that any adjustment made not mask disparities and, ideally, encourage providers to make improvements to address health disparities in their practice.

This is a difficult balance to strike and we appreciate that CMS is being thoughtful in how to move forward. The department notes that they are waiting on the results of some forthcoming studies and trials on the subject and ask for public comment on what social factors should be taken into account and which method would be best for accounting for these factors. In the meantime, CMS is proposing a temporary “complex patient bonus” based on medical complexity. Although CMS discusses the possibility of using dual eligibility status as a measure of social complexity as well, they ultimately decided, for simplicity sake, to only use medical complexity in calculating the bonus. While we think the complex patient bonus is an important temporary step in ensuring these patients’ needs are met, the decision not to also use dual status is unfortunate. We know social factors play a large role in determining health outcomes and patients with complex social needs (like the duals population) require additional time and attention from providers. While we are pleased to see CMS is continuing to try and figure out how to best account for patients with complex social needs, we are disappointed that they have not proposed testing a solution within this rule.

4.)    The rule doesn’t go far enough in promoting health equity.

Ensuring that payments adequately account for patients with complex health and social needs is also vital for ensuring health equity. People of color comprise 44 percent of the Medicare-Medicaid enrollee population, compared to 17 percent of the Medicare-only population. Failure to compensate physicians who treat a large number of dually eligible beneficiaries creates a hidden racial bias in the payment formula and could potentially undermine quality of care for people of color.

While properly accounting for patients with complex health needs is important, it is not enough to simply mitigate potential negative impacts on people of color through this indirect connection. The QPP represents a major opportunity to transform the health system in a way that proactively and explicitly addresses the persistent health disparities that exist for marginalized and underserved populations. The new rule proposes four new clinical improvement activities in the health equity subcategory including: clinician leadership in disparities research; providing educational opportunities for new clinicians in underserved areas; engaging new Medicaid patients; and supporting the use of patient-reported outcome tools. While we are supportive of these new activities, CMS could be doing much more to fully capitalize on this opportunity to address health equity. In the past we’ve suggested expanding the list of clinical practice improvement activities to promote cultural competency or implicit bias training. CMS had also previously promised to release best practices for collecting data stratified by demographic characteristics and to consider additional strategies for addressing health equity by incentivizing providers who reduce disparities and by identifying appropriate measures of health equity.

This proposed rule represents just one step in what is sure to be a long transition to a value-based health system and it underscores just how far we still have to go in creating a system that serves all patients, including those with complex health and social needs. This is why it’s so vital that consumer advocates at the federal, state and local level remain engaged in the process, to ensure transformation efforts are focused on keeping patients at the center.