1. William Shrank, MD MSHS
Division of Pharmacoepidemiology and Pharmacoeconomics
Harvard Medical School
Brigham and Women’s Hospital
An Update on Payment Reform
Activities at CMS and How Data
Analytics and Rapid-Cycle
Evaluation Support Transformation

2. The Innovation Center
The charge: Identify, Test, Evaluate, Scale
“The purpose of the Center is to test innovative
payment and service delivery models to reduce
program expenditures under Medicare, Medicaid,
and CHIP…while preserving or enhancing the
quality of care furnished.”
“preference to models that improve the coordination, quality, and
efficiency of health care services.”
Resources: $10 billion funding for FY2011 through 2019
Opportunity to “scale up”: The HHS Secretary has the
authority to expand successful models to the national level

3. Innovation Center Initiatives
Coordinated Care:
Accountable Care Organizations
 Pioneer ACO Model
 Advance Payment ACO Model
Primary Care/Medical Homes
 Comprehensive Primary Care Initiative
(CPCI)
 Federally Qualified Health Center Advanced
Primary Care Practice Demonstration
 Multi-Payer Advanced Primary Care
Practice (MAPCP) Demonstration
Right Care:
• Partnership for Patients
• Community-Based Care Transitions
• Bundled Payment for Care Improvement
Innovation Infrastructure:
• Healthcare Innovation Challenge
• Innovation Advisors Program
State/Medicaid/Duals:
• State Demonstration to Integrate care for
Dual Eligible Individuals
• Financial Alignment to Support State Efforts
to Integrate Care
• Demonstration to Reduce Avoidable
Hospitalizations of Nursing Facility Residents
• Medicaid Health Home State Plan Option
• State Innovation Models
Preventive Care:
• Million Hearts Campaign
• Strong Start
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4. Partnershi
p for
Patients
Bundled Payment
Pioneer
ACOs
Global
Payment
for Dual-
Eligibles
ACOs
-Advance Payment
Comprehensive
Primary Care
Innovation
Challenge
Providers can choose from a range of care
delivery transformations and escalating
amounts of risk, while benefitting from
supports and resources designed to
spread best practices and improve care.

5. Coordinated Care Initiatives
Accountable Care Organizations
• Pioneer ACO Model
• Advance Payment ACO Model
Primary Care/Medical Homes
• Comprehensive Primary Care Initiative (CPCI)
• Federally Qualified Health Center Advanced Primary Care
Practice Demonstration
• Multi-Payer Advanced Primary Care Practice (MAPCP)
Demonstration

6. The Pioneer ACO Model
GOAL: Test the transition from a shared-savings
payment model to a population-based payment.
Designed for health care organizations and providers that are
already experienced in coordinating care.
Focused on improving the health and experience of care for
individuals, improving population health, and reducing the rate of
growth in health care spending.
CMS will publicly report the performance of Pioneer ACOs on
quality metrics.
Awardees announced, programs have begun

7. Advance Payment Model
GOAL: Test whether pre-paying a portion of future shared savings will
increase participation and success of physician-based and rural ACO’s in
the Medicare Shared Savings Program.
Three ways in which participating ACOs may receive payment:
1. Upfront fixed payment
2. Upfront payment based on number of Medicare
patients served
3. Monthly payment based on number of Medicare
patients
Application deadlines were consistent with Medicare Share Savings
Program.

8. GOAL: Test a multi-payer initiative fostering collaboration
between public and private health care payers to strengthen
primary care.
• Requires investment across multiple payers, because individual health plans,
covering only their members, cannot provide enough resources to transform
primary care delivery.
CMS has invited public and private insurers to collaborate in purchasing high
value primary care in communities they serve.
• Medicare will pay approximately $20 per beneficiary per month (PBPM) then
move towards smaller PBPM to be combined with shared savings opportunity.
• 7 markets selected where majority of payers commit to investing in
comprehensive primary care; approximately 75 practices per market.
Comprehensive Primary Care
initiative (CPCi)

9. Multi-payer Advanced
Primary Care Practice Model
GOAL: Test the effectiveness of offering providers a common
payment method from Medicare, Medicaid, and private health plans.
Medicare will participate in existing State multi-payer health reform initiatives.
• Must include participation from Medicaid and private health plans.
Monthly care management fee for beneficiaries receiving primary care from
Advanced Primary Care practices.
Eight states selected: Maine, Vermont, Rhode Island, New York,
Pennsylvania, North Carolina, Michigan and Minnesota.

10. Federally Qualified Health Center
Advanced Primary Care Demonstration
GOAL: Evaluate impact of the advanced primary care practice
model in the Federally Qualified Health Center (FQHC) setting.
Open to FQHCs that have provided medical services to at least 200 Medicare
beneficiaries in previous 12-month period.
FQHC receives care management fee for each Medicare beneficiary enrolled.
Striving to meet NCQA level 3 medical home status.
500 FQHCs were selected.
Performance year started Nov 1st 2011.

11. Right Care Initiatives
• Partnership for Patients
• Community Based Care Transitions Program
• Bundled Payment for Care Improvement

12. Improving Patient Safety
GOAL: Testing intensive programs of support hospitals as they
make care safer.
• Provide training, support, and technical assistance for hospitals and other
care providers.
• Establish and implement a system to track and monitor hospital progress
towards attaining quality improvement goals.
• Engage patients and families in the process of improving patient safety.
• Establish a network of “Vanguard Hospitals” to work on new ways to
reduce all-cause harm in hospitals.
$500 million for hospitals and other providers to improve patient safety.
Awards given in the late 2011.

13. Partnership for Patients:
Better Care, Lower Costs
New nationwide public-private partnership to tackle all forms of harm to
patients.
GOALS:
40% Reduction in Preventable Hospital Acquired Conditions over three years.
 1.8 Million Fewer Injuries
 60,000 Lives Saved
20% Reduction in 30-Day Readmissions in Three Years.
 1.6 Million Patients Recover Without Readmission
 $35 Billion Dollars Saved in Three Years
Over 3,800 hospitals have signed pledge.

14. Community-based Care
Transitions Program (CCTP)
$500 million available for community-based organizations partnered
with hospitals to reduce 30-day hospital readmissions.
GOALS:
• Improve transitions of beneficiaries from inpatient hospitals to home or
other care settings.
• Reduce readmissions for high risk beneficiaries.
• Document measurable savings to the Medicare program.

15. Bundled Payments for Care
Improvement
•
•
•
•

16. Innovation Infrastructure
• Healthcare Innovation Challenge
• Innovation Advisors Program

17. Health Care Innovation
Awards
To identify and support a broad range of innovative service delivery
and payment models that achieve better care, better health and lower costs
through improvement in communities across the nation.
Round 1: Around $900 million committed, with individual awards ranging from
approximately $1M to $30M.

18. Innovation Advisors
Program
GOAL: Support the Innovation Center’s development
and testing of new models of payment and care delivery
in their home organizations and communities.
•Opportunity to deepen key skill sets in:
o Health care economics and finance
o Population health
o Systems analysis
o Operations research and quality improvement
 1 year commitment; 6 months of intensive training.
 Up to $20K Stipend available to home organizations.
 Up to 200 individuals will be selected within the first year.
 For further information, see: www.orise.orau.gov/IAP
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19. State/Medicaid/Duals
Initiatives
• State Demonstration to Integrate Care for Dual Eligible
Individuals
• Financial Alignment to Support State Efforts to Integrate
Care
• Demonstration to Reduce Avoidable Hospitalizations of
Nursing Facility Residents
• Medicaid Health Home State Plan Option

20. Financial Models to Support State
Efforts to Coordinate Care for
Medicare-Medicaid Enrollees
GOAL: Align financing and improve care for dual eligible
populations
Two models:
Capitated Model
• State, CMS, and a health plan enter into three-way contract.
• Health plan receives a prospective blended payment.
Managed Fee-for-Service Model
• State and CMS enter into an agreement.
• State could benefit from savings resulting from initiatives designed to
improve care for dual eligible beneficiaries.
 All states that meet program standards and conditions will have the option to
pursue either or both of these models.

21. CMS State Innovation Models
 Purpose : To test whether new payment and service delivery
models will produce greater results when implemented in the context
of a state-sponsored Comprehensive Health System Transformation
Plan.
 States are expected to:
 Apply all state policy levers, including things such as scope of practice
credentialing, provider licensing, public health activities;
 Ensure multi-payer participation in new integrated payment and service delivery
models;
 Drive transformation of state hospitals and medical schools;
 Coordinate multiple ACA-supported activities, including insurance exchanges,
CMMI models, and Medicaid waiver activities; and,
 Promote prevention and integrate community health services to address the
determinants of poor health.

22. Preventive Health: Strong Start
 Strong Start I
 A nationwide public awareness effort working to improve the health of moms and
babies by encouraging mothers and practitioners to let labor begin on its own:
CMMI based initiative
Goal: Reduce incidence of early elective deliveries (scheduled induction or cesarean
without medical indication before 39 weeks)
 Strong Start II
 MIHOPE-SS (home visiting through Nurse Family Partnership and Healthy
Families America)
 HRSA project with ACA mandate; evaluation funds from CMMI
 Three approaches to enhanced prenatal care: CMMI based initiative
Goal: Reduce incidence of preterm birth among high risk Medicaid beneficiaries

23. Preventive Care Initiatives
• Million Hearts Campaign

24. Rapid-Cycle Evaluation
 “Be part of the solution”: Gather information and leverage
our claims data to promote and support continuous quality
improvement in the marketplace.
 Speed: Improve our data systems and our ability to use data so
that we can frequently and rapidly assess effectiveness and
provide feedback to providers.
 Rigor: Use advanced epidemiologic methods to measure
effectiveness to meet a high standard of evidence and allow for
certification.

25. No “Turnkey” Solutions
 The models require fundamental changes
in the structure of healthcare delivery
 Realigning incentives for health systems,
primary care, hospitals, home-care
 Substantial learning and adaptation will be
necessary before achieving the greatest
efficiencies
 Healthcare delivery in these models will be
maturing once implemented
 RCTs not feasible in most cases

26. Blurring the Lines Between Formative
and Summative Evaluation
 Feedback to clinicians includes
comparisons against controls and other
participants
 Impact assessments early after
implementation in hopes of identifying and
scaling successful programs as soon as
possible

27. Key Features of Formative
Evaluation and Feedback
 Understand the context: Gather qualitative data from providers
and health systems to assess perceptions/barriers/enablers of
success
 Study the process: We will ask providers to report how they
implement different models
 Regularly measure performance: Frequently apply automated
measurements of effectiveness using claims data
 Developing capacity to perform these analyses faster
in-house

28. Key Features of Formative
Evaluation and Feedback
 Provide frequent feedback and reports to
providers/systems:
 Collaborate with Learning and Diffusion team to deliver
data to providers in ways that can be easily interpreted
 Deliver data to promote more helpful self-evaluation
 Develop learning collaboratives to spread effective
strategies for each model as well as to identify failing
approaches

29. Summative Evaluation – Speed
without Sacrificing Rigor
 Program Design: Evaluation team participates in all
phases of design
 Sample selection for intervention (generalizability)
 Availability of control groups
 Sample size (power)
 Measurement:
 Standardized priority outcome metrics across models
 Unique metrics for each intervention
 Patient and provider experience metrics
 Develop population-based metrics; equity; access
 Specific metrics unintended consequences

30. Summative Evaluation – Speed
without Sacrificing Rigor
 Methods: Time-series analyses that allow us
to assess both changes in level and slope of
improvement
 Includes transition phase to account for time to
“learn”
 Partnership: Communicate early and often
with the actuaries
 Consider how soon we can expect changes and
when a model can be deemed certifiable

31. New Methods
 Automating and improving performance
reporting
 Selecting comparison groups
 Aligning, improving and harmonizing measures
 Establishing clear thresholds for evidence
standards needed to scale models
 Developing a “kill switch” for failing programs
 Disentangling multiple program effects
 Adjusting for multiple sources of selection bias

32. Primary Goal: To Promote
Value in Healthcare
 At the core of our models a fundamental
realignment of incentives to promote:
 Improved Quality
 Greater Efficiency
 Less Waste and Variability
 And NOT Greater Volume