Value-Based Payment

New Administration Sends Positive Smoke Signals About Value-Based Payments

Last week, the CMS announced a delay in publishing the final rules regarding the new mandatory cardiac and joint bundled payment programs. Significantly, the CMS did not dethe start dates of those programs, put them on hold, or cancel them all together. The new bundled payment programs will begin as scheduled, but the new administration will have a chance to make minor tweaks prior to the July 1 start date.

In spite of Secretary Price’s previous objections to mandatory CMMI programs, the green light from CMS foreshadows a continued commitment to value-based payments. A strong case can be made that the delivery system reforms instituted under the Affordable Care Act are a unique example of successful government intervention. There is compelling evidence to show that these programs have improved the quality of care for millions of people, saved hundreds of thousands of lives, and reduced spending by billions of dollars.

The pressure to reform will continue. Every provider needs to engage in value-based payment models today and begin the learning process. Currently, 30% of providers are engaged in value-based models. Provider engagement is expected to increase to 50% by 2018.  Now is the time to move forward or risk falling behind half the providers in America.

Several companies offer low-cost, supported participation in the Medicare Shared Savings Program for the third of physician groups who do not have 5,000 Medicare lives on their own. These companies include Collaborative Health Systems, Aledade, and Caravan Health.

Applications for 2018 are due to CMS on July 31st, with CMS letters of intent due by May 1st. Please reach out to us at if you would like to learn more.



Payment Model a Success for Providers, Patients and Medicare

The Advanced Payment Model demonstration project is complete. The Model was designed to test whether pre-paying shared savings would result in higher participation in the model from independent physicians and rural providers. It also tests whether such participation will lower costs and/or improve the quality of care for Medicare Beneficiaries. The ACO Investment Model (AIM) follows the same principles as Advanced Payment but also allows providers employed by Critical Access Hospitals to participate in the program.


The average Advanced Payment ACO generated $2 million per performance year, almost twice as much savings per year as the average MSSP ACO. Advanced Payment model ACO’s also saved almost five times as much per beneficiary at $241.40 per year, vs. $58.64 per beneficiary per year for all MSSP ACO’s. The program saved the trust fund $21.5 million over three years.


For the 31 ACO’s that remained in the Advanced Payment program for three years, the average quality score increased from 90.2% to 92.9% by the third year.


Thirty-six of the one hundred new MSSP ACO’s in 2016 are ACO Investment Model (AIM) ACO’s, an updated version of the Advanced Payment model, and more than two-thirds of them are solely rural. Most AIM participants say they would not participate in the MSSP without AIM support. The 2016 AIM program increased rural participation in ACO’s five-fold.


ACO participation appears to have more impact in small and rural practices with limited experience in managing care when compared to all MSSP ACO’s. Small and rural ACO participants are likely to avoid penalties under MACRA’s quality payment program. Providing support for these practices at no net cost to the government is in the public interest.

In conclusion, the Advanced Payment model is successful in helping small practices and rural providers participate in the MSSP while improving quality and lowering per capita cost, and provides a net savings to the Medicare Trust fund. The Secretary should exercise her authority under the ACA to make the program permanently available to small and rural practices.

ALL MSSP ALL Advanced Pay
Per ACO Per Year $1,009,871 $1,975,039
Per Beneficiary Year $58.64 $241.40
Average Savings 0.58% 2.28%
Total Beneficiary Years 16,275,327 850,880
Total Savings $954,328,267 $205,404,040
Estimated Total Advanced Pay $80,684,908
Estimated Advanced Pay Repayment $38,369,312
Shared Savings Payments $1,298,712,390 $141,596,556
Net Savings (Loss) -$344,384,123 $21,491,888


CY2017 Physician Fee Schedule Proposed Rule Continues Trend Towards Value-Based Payments

CMS’s 2017 Physician Fee Schedule (PFS) proposed rule offers a lot for organizations interested in transformation to celebrate. In addition to making a number of tweaks to the Shared Savings Program that demonstrate CMS leadership are listening to provider feedback, the proposed rule removes barriers for rural health care organizations to offer more preventative and consultative services.

Most importantly, CMS proposes to remove the requirement for direct supervision in rural health clinics and federally qualified health centers when providing comprehensive care management (CCM) services. When CMS first finalized CCM as a billable service, the agency determined that for rural clinics and federally qualified health centers the primary practitioner must directly supervise all aspects of the care. In the proposed rule CMS  would allow such facilities to use general supervision for services incident to CCM, just as currently allowed in a standard physician office.

CMS also simplified the conditions for practitioners operating in all settings to provide CCM services, removing cumbersome requirements for a comprehensive pre-visit as well as written agreement to receive services and share health information. They also propose important new payments for care coordination and behavioral health integration. Caravan Health will assist you in implementing these new codes once approved.

Additionally, in a significant sign that CMS is thinking about our rural members, two new telehealth codes are proposed that will allow clinicians to offer advance care planning remotely.

CMS also proposes a new program focused squarely on prevention in high risk populations. The Medicare Diabetes Prevention Program would begin January 1, 2018 and offer an opportunity for providers to partner with local community organizations or even host prevention programs themselves. CMS is seeking comments on all aspects of the new program, and we expect to see at least one more round of additional rule-making on this before the program rolls out.

Finally, CMS is proposing a few new quality measures and sun-setting others. They also propose changes to the audit process and are considering beneficiary self-assignment.

Click here to read Caravan Health’s full analysis of the proposed rule.

We will have a webinar to review the proposed rule on Tuesday, Aug. 23 at 9am PT/11am CT/12pm ET. To join, log in to, participant code 5004777. If you are unable to access the web-audio function, dial 303.248.0285.

Comments on the proposed rule will be accepted by CMS until 5pm EST September 6, 2016. A final rule is expected no later than November 1, 2016.


LeeAnn Hastings
Director of Policy & Compliance
Caravan Health

Comprehensive Primary Care Plus Enrollment: A Window of Opportunity

A comprehensive overview of CPC+, a financially rewarding initiative from the Centers for Medicare and Medicaid Services (CMS), designed to transform your practice towards the community health and the value-based payment systems of the future.

Learn how Caravan Health can guide your practice to full qualification for CPC+ (Track 2) through the CPC+ Boot Camp, including line-by-line application assistance and hard to obtain IT Vendor Letter of Support, all at no cost to you.

Rural Providers Organized Under 23 Medicare ACOs Receive $46 Million AIM Funding From CMMI

I would like to share this news release which was released to the news media today.

Lynn Barr

Rural Providers Organized Under 23 Medicare ACOs Receive $46 Million AIM Funding From CMMI

Additional $31 million also provided by CMMI to prepare rural practices for value-based payments under new Practice Transformation Network

Nevada City, CA, January 12, 2016 — A pioneering group of rural physicians and hospital administrators came together in 2013 to begin the journey toward managing rural population health. Through innovation and collaboration, they sought to transform today’s rural healthcare delivery system into a world-class primary care system that provides professional satisfaction for clinicians, attracts consumers, and provides high-quality acute, post-acute and outpatient services that meet patients’ needs.

These rural thought-leaders joined forces to form the first National Rural ACO (NRACO) and create the NRACO Services Corporation (NSC), which has been supporting rural Medicare ACOs with training, data, analytics, patient satisfaction surveys, and evidence-based medicine programs since 2014. In 2015, NSC organized more than 6,000 providers in 159 rural health systems into 23 Medicare Shared Savings Program (MSSP) ACOs, and obtained $46 million in ACO Investment Model funding to support their ACO operations and local care coordination programs. This group includes 55 rural PPS hospitals, 92 Critical Access Hospitals, 168 Rural Health Clinics, and 39 rural FQHCs serving more than 500,000 Medicare patients.

Working with other key stakeholders like the National Rural Health Association and the National Rural Health Resource Center, the rural hospital CEOs also started the non-profit National Rural Accountable Care Consortium. The Consortium will assist hundreds of rural health systems in their journey toward accountable care, funded by a $31 million cooperative agreement award from the Center for Medicare and Medicaid Innovation (CMMI).

To date, the majority of National Rural ACO participants have demonstrated reductions in per capita spending while improving quality and patient satisfaction. Unexpectedly, this has also resulted in financially strengthening the majority of the participating rural health systems. Participating hospital CFOs are queried monthly on the financial status of their organizations, and none have reported negative effects of being associated with accountable care, while most have described increased revenue and improved staff satisfaction.

According to NRACO founding member Tim Putnam, CEO of Margaret Mary Health in Batesville, Indiana, “there will be significant opportunities to strengthen rural health systems by becoming an ACO or participating in a CMMI innovation model in the next 1-2 years, but providers must prepare.” Co-founder Melanie Van Winkle, CFO of Mammoth Hospital in Mammoth Lakes, California agrees, saying “this is the reason we exist, to take care of the community. The ACO helps us focus on our mission.” Steve Barnett, CEO of McKenzie Health in Sandusky, Michigan adds, “once you begin giving this type of care, you’ll never go back. We are very grateful for the support we have received from CMS, CMMI, MedPAC, and the Federal Office of Rural Health Policy. We wouldn’t be able to organize rural providers under this model without their help.”

Today, rural providers can get all of the support they need to be ready for value-based payments through the Consortium’s Practice Transformation Network, fully funded by CMMI. Medical office staff will be trained in population health management, including care coordination, quality improvement, annual wellness visits, and patient satisfaction, and can begin billing for these professional services.

Spaces are still available to join the Consortium’s Practice Transformation Network. In order to enroll in this federally-funded program that provides a population health infrastructure to rural practices at no cost, go to

Contact: Lynn Barr, Chief Transformation Officer



AHRQ Says Rural Quality is Subpar

So one of the debates out here is how does rural score in quality? Well, according to AHRQ’s Chartbook on Rural Health, not too good. The AHRQ publication released in August 2015 explains that rural counties report “worse” in the four of five NQF priorities: effective treatment, patient safety, healthy living and access when compared to their urban counterpart. Rural scores the “same” in patient centeredness but on no occasion does rural score “better”. In fact the more rural you get, the worse the quality scores. This is not good news for rural providers given the increasing reporting requirements on the horizon.

How does rural score on hospitalizations due to ambulatory care-sensitive conditions (ACSCs) such as hypertension and pneumonia that can be largely prevented if ambulatory care is provided in a timely and effective manner? You guessed it, not too good. According to the report, the rate of potentially avoidable hospitalizations for all conditions for people living in rural counties was higher than for residents living in metropolitan areas.

Same thing with Emergency Department utilization, the further you get away from the city the more people use the ED. AHRQ reports that the rate of ED visits per 100,000 was higher for rural residents when compared with urban. ED visits are costly and may be indicative of poor care management, inadequate access to care, or poor choices on the part of beneficiaries. ED visits for conditions that are preventable or treatable with appropriate primary care lower health system efficiency and raise costs.

This data is very representative of what we see in our NRACO data and it is driving our services. Understanding your quality scores in preparation for value-based payment models must be a priority for all rural healthcare providers. How do you score?


by Sue Deitz, MPH, Regional VP, National Rural ACO