The value proposition comes home: The Jack A. Vennes, M.D. and Stephen E. Silvis, M.D. Honorary Lecture

Value in health care is often defined as “health outcomes achieved per dollar spent,” or “outcomes/costs.” Value encompasses efficiency, but is primarily results oriented and not based on volume. For purposes of comparison and assessment, value assessments apply to patient- and condition-specific episodes of care.

As the dominant driver of value-based reimbursement (VBR), the Center for Medicare & Medicaid Services, has defined a payment taxonomy for coming years based upon the degree of linkage between quality and reimbursement (JAMA 2014;311:1967-8). Four categories of reimbursement extend from traditional fee for service (FFS; Category 1) to FFS with significant reliance on quality measures and outcome (Cat. 2), entirely population-based models with payments stimulated by delivery of care (Cat. 3), and payment based entirely on capitated coverage of individuals over time (Cat. 4).

Category 2 reimbursement for physicians is largely based upon the Physicians Quality Reporting System (PQRS) with Value-Based Payment Modifiers (VBPM). Incentives for participation in PQRS ended in 2014. For select groups of more than 100 physicians, 2015 payments will be based on 2013 PQRS submissions, with a 1% cut for groups that didn’t submit data in 2013. For all physicians, failure to participate in 2015 will result in a downward adjustment of 2% in 2017. Participation will generate bonuses or penalties of 1%-4% in 2017, based on group size, claims-based cost data, and submission of PQRS quality data, via one of three mechanisms. The most attractive option for many groups will be submission of data for 50% of applicable patients via a Qualified Clinical Data Registry, such as the ASGE & ACG’s GI Quality Improvement Consortium (GIQUIC) or the AGA’s Digestive Health Registry (DHR).

Category 3 in the CMS payment taxonomy triggers reimbursement by delivery of care, but links it to episodes of care or to population management, with varied mechanisms for providers to share in the potential benefits and risks of cost extremes. Programs include Accountable Care Organizations (ACOs), medical homes for specified conditions, and shared savings for comprehensive primary care and end-stage renal disease. Presently, most employ a modest potential upside in reimbursement for savings but only limited downside risk. In 2015, ACOs cover about 23 million lives, or 7% of the population of the United States. Estimates suggest coverage of 72 million (22%) by 2020 (Leavitt Partners, Salt Lake, 2015).

In Category 4 of the CMS taxonomy, the Next Generation ACO Model drops all links between reimbursement and actual delivery of care, in favor of reimbursement for the assumption of care of individuals over time frames greater than 1 year, with greater participation in savings and risk. Several inducements and tools are included to enhance participation and the management of care, including: 1) reward to beneficiaries for participation, 2) reimbursement for skilled nursing care without prior hospitalization, and 3) expanded coverage for tele-health and home services. CMS aims to increase Categories 3 (alternative FFS) and 4 (population-based payment models) to 50% of covered individuals by 2018.

VBR by nongovernmental payers lags behind that of federal and state programs. CMS is currently testing more than 20 models for care and reimbursement, with aims to pull private payers into VBR and the final common pathway of management of populations while conserving health care resources (JAMA 2014;311:1967-8).

For gastroenterology, VBR will require practice redesign, with the expectation that physicians will focus their care toward their maximal level of licensure and privileging, while enabling employed advanced practice R.N.’s (certified nurse practitioner, or CNP) and physician assistants to do the same (Clin. Gastroenterol. Hepatol. 2014;12:1584-6 ).

This trend is already well established in many environments. Redesign is also stimulating consolidation of practices to better enable contracts for population management by the group. A second development will be increasing use of risk-bearing contracts for episodes of care, particularly for colorectal cancer surveillance and liver transplantation. Specialty medical homes, as opposed to primary care medical homes, will grow for care of inflammatory bowel disease and perhaps for chronic liver disease patients. Success with these initiatives, with both preservation of adequate reimbursement and appropriate constraint in delivery of care, will require extensive reliance on big data for demonstration of quality and patient engagement for optimizing the frequency and intensity of care.

Dr. Petersen is professor of medicine, Mayo Graduate School of Medicine, Mayo Clinic College of Medicine, Rochester, Minn. He has no conflicts of interest. His comments were made during the ASGE and AGA joint Presidential Plenary at the annual Digestive Disease Week.

Value in health care is often defined as “health outcomes achieved per dollar spent,” or “outcomes/costs.” Value encompasses efficiency, but is primarily results oriented and not based on volume. For purposes of comparison and assessment, value assessments apply to patient- and condition-specific episodes of care.

As the dominant driver of value-based reimbursement (VBR), the Center for Medicare & Medicaid Services, has defined a payment taxonomy for coming years based upon the degree of linkage between quality and reimbursement (JAMA 2014;311:1967-8). Four categories of reimbursement extend from traditional fee for service (FFS; Category 1) to FFS with significant reliance on quality measures and outcome (Cat. 2), entirely population-based models with payments stimulated by delivery of care (Cat. 3), and payment based entirely on capitated coverage of individuals over time (Cat. 4).

Category 2 reimbursement for physicians is largely based upon the Physicians Quality Reporting System (PQRS) with Value-Based Payment Modifiers (VBPM). Incentives for participation in PQRS ended in 2014. For select groups of more than 100 physicians, 2015 payments will be based on 2013 PQRS submissions, with a 1% cut for groups that didn’t submit data in 2013. For all physicians, failure to participate in 2015 will result in a downward adjustment of 2% in 2017. Participation will generate bonuses or penalties of 1%-4% in 2017, based on group size, claims-based cost data, and submission of PQRS quality data, via one of three mechanisms. The most attractive option for many groups will be submission of data for 50% of applicable patients via a Qualified Clinical Data Registry, such as the ASGE & ACG’s GI Quality Improvement Consortium (GIQUIC) or the AGA’s Digestive Health Registry (DHR).

Category 3 in the CMS payment taxonomy triggers reimbursement by delivery of care, but links it to episodes of care or to population management, with varied mechanisms for providers to share in the potential benefits and risks of cost extremes. Programs include Accountable Care Organizations (ACOs), medical homes for specified conditions, and shared savings for comprehensive primary care and end-stage renal disease. Presently, most employ a modest potential upside in reimbursement for savings but only limited downside risk. In 2015, ACOs cover about 23 million lives, or 7% of the population of the United States. Estimates suggest coverage of 72 million (22%) by 2020 (Leavitt Partners, Salt Lake, 2015).

In Category 4 of the CMS taxonomy, the Next Generation ACO Model drops all links between reimbursement and actual delivery of care, in favor of reimbursement for the assumption of care of individuals over time frames greater than 1 year, with greater participation in savings and risk. Several inducements and tools are included to enhance participation and the management of care, including: 1) reward to beneficiaries for participation, 2) reimbursement for skilled nursing care without prior hospitalization, and 3) expanded coverage for tele-health and home services. CMS aims to increase Categories 3 (alternative FFS) and 4 (population-based payment models) to 50% of covered individuals by 2018.

VBR by nongovernmental payers lags behind that of federal and state programs. CMS is currently testing more than 20 models for care and reimbursement, with aims to pull private payers into VBR and the final common pathway of management of populations while conserving health care resources (JAMA 2014;311:1967-8).

For gastroenterology, VBR will require practice redesign, with the expectation that physicians will focus their care toward their maximal level of licensure and privileging, while enabling employed advanced practice R.N.’s (certified nurse practitioner, or CNP) and physician assistants to do the same (Clin. Gastroenterol. Hepatol. 2014;12:1584-6 ).

This trend is already well established in many environments. Redesign is also stimulating consolidation of practices to better enable contracts for population management by the group. A second development will be increasing use of risk-bearing contracts for episodes of care, particularly for colorectal cancer surveillance and liver transplantation. Specialty medical homes, as opposed to primary care medical homes, will grow for care of inflammatory bowel disease and perhaps for chronic liver disease patients. Success with these initiatives, with both preservation of adequate reimbursement and appropriate constraint in delivery of care, will require extensive reliance on big data for demonstration of quality and patient engagement for optimizing the frequency and intensity of care.

Dr. Petersen is professor of medicine, Mayo Graduate School of Medicine, Mayo Clinic College of Medicine, Rochester, Minn. He has no conflicts of interest. His comments were made during the ASGE and AGA joint Presidential Plenary at the annual Digestive Disease Week.

Value in health care is often defined as “health outcomes achieved per dollar spent,” or “outcomes/costs.” Value encompasses efficiency, but is primarily results oriented and not based on volume. For purposes of comparison and assessment, value assessments apply to patient- and condition-specific episodes of care.

As the dominant driver of value-based reimbursement (VBR), the Center for Medicare & Medicaid Services, has defined a payment taxonomy for coming years based upon the degree of linkage between quality and reimbursement (JAMA 2014;311:1967-8). Four categories of reimbursement extend from traditional fee for service (FFS; Category 1) to FFS with significant reliance on quality measures and outcome (Cat. 2), entirely population-based models with payments stimulated by delivery of care (Cat. 3), and payment based entirely on capitated coverage of individuals over time (Cat. 4).

Category 2 reimbursement for physicians is largely based upon the Physicians Quality Reporting System (PQRS) with Value-Based Payment Modifiers (VBPM). Incentives for participation in PQRS ended in 2014. For select groups of more than 100 physicians, 2015 payments will be based on 2013 PQRS submissions, with a 1% cut for groups that didn’t submit data in 2013. For all physicians, failure to participate in 2015 will result in a downward adjustment of 2% in 2017. Participation will generate bonuses or penalties of 1%-4% in 2017, based on group size, claims-based cost data, and submission of PQRS quality data, via one of three mechanisms. The most attractive option for many groups will be submission of data for 50% of applicable patients via a Qualified Clinical Data Registry, such as the ASGE & ACG’s GI Quality Improvement Consortium (GIQUIC) or the AGA’s Digestive Health Registry (DHR).

Category 3 in the CMS payment taxonomy triggers reimbursement by delivery of care, but links it to episodes of care or to population management, with varied mechanisms for providers to share in the potential benefits and risks of cost extremes. Programs include Accountable Care Organizations (ACOs), medical homes for specified conditions, and shared savings for comprehensive primary care and end-stage renal disease. Presently, most employ a modest potential upside in reimbursement for savings but only limited downside risk. In 2015, ACOs cover about 23 million lives, or 7% of the population of the United States. Estimates suggest coverage of 72 million (22%) by 2020 (Leavitt Partners, Salt Lake, 2015).

In Category 4 of the CMS taxonomy, the Next Generation ACO Model drops all links between reimbursement and actual delivery of care, in favor of reimbursement for the assumption of care of individuals over time frames greater than 1 year, with greater participation in savings and risk. Several inducements and tools are included to enhance participation and the management of care, including: 1) reward to beneficiaries for participation, 2) reimbursement for skilled nursing care without prior hospitalization, and 3) expanded coverage for tele-health and home services. CMS aims to increase Categories 3 (alternative FFS) and 4 (population-based payment models) to 50% of covered individuals by 2018.

VBR by nongovernmental payers lags behind that of federal and state programs. CMS is currently testing more than 20 models for care and reimbursement, with aims to pull private payers into VBR and the final common pathway of management of populations while conserving health care resources (JAMA 2014;311:1967-8).

For gastroenterology, VBR will require practice redesign, with the expectation that physicians will focus their care toward their maximal level of licensure and privileging, while enabling employed advanced practice R.N.’s (certified nurse practitioner, or CNP) and physician assistants to do the same (Clin. Gastroenterol. Hepatol. 2014;12:1584-6 ).

This trend is already well established in many environments. Redesign is also stimulating consolidation of practices to better enable contracts for population management by the group. A second development will be increasing use of risk-bearing contracts for episodes of care, particularly for colorectal cancer surveillance and liver transplantation. Specialty medical homes, as opposed to primary care medical homes, will grow for care of inflammatory bowel disease and perhaps for chronic liver disease patients. Success with these initiatives, with both preservation of adequate reimbursement and appropriate constraint in delivery of care, will require extensive reliance on big data for demonstration of quality and patient engagement for optimizing the frequency and intensity of care.

Dr. Petersen is professor of medicine, Mayo Graduate School of Medicine, Mayo Clinic College of Medicine, Rochester, Minn. He has no conflicts of interest. His comments were made during the ASGE and AGA joint Presidential Plenary at the annual Digestive Disease Week.