Rural hospital takes advanced payment path

A rural Oregon hospital, Sky Lakes Medical Center, is jumping into the Centers for Medicare & Medicaid Services’ Advanced Alternative Payment Models, which are the elite track of Medicare’s new clinician payment system, the Quality Payment Program. Providers in Advanced APMs must be capable of managing sizable financial risk in exchange for 5 percent incentive payments.

As David and Goliath stories go, this one involves not just one giant but two. The 176-bed Sky Lakes, in Klamath Falls, will be participating in two Advanced APMs in 2017:

• The Medicare Shared Savings Program, Track 3: Under this Medicare accountable care organization program, providers assume upside and downside risk. While they share in any Medicare savings, they are also responsible for covering a significant portion of any Medicare spending that exceeds the target.
• Comprehensive Primary Care Plus: This primary care medical home model has two tracks: Track 1 is for beginner to intermediate medical homes with certified electronic health record technology and basic population health functions. Track 2 is for advanced medical homes with certified EHR technology and broader population health experience. Under Track 2, fee-for-service payments are replaced with a hybrid payment. A percentage of the payment is a fixed fee that can be applied to nonoffice-based evaluation and treatment; the rest is standard fee for service.

CMS estimates that only 70,000 to 120,000 clinicians will take part in the Advanced APMs in 2017. The number of small rural providers currently capable of meeting performance demands under these models will likely be small, American Hospital Association policy directors say.

Sky Lakes President and CEO Paul Stewart says he recognizes the challenges inherent in Advanced APMs but that his hospital is philosophically committed to this approach. “We believe the current system of paying for volume is not sustainable, nor does it reward the right behaviors. We agree we need to take proactive steps to transform the system to focus more on value,” he says.

History of population health management

Sky Lakes has been building toward value-based population health for decades, caring for Medicaid patients under fully capitated arrangements, deploying an electronic health record, and actively investing in community wellness initiatives to prevent and manage disease.

One Sky Lakes clinic, Cascades East Family Medicine, has been a certified patient-centered medical home for several years and is now set to enter Track 2 of CPC Plus. Sky Lakes is using what it’s learned at Cascades East throughout its other clinics, many of which will be in CPC Plus Track 1.

Providing needed support staff to these small clinics will be key, says Grant Niskanen, M.D., Sky Lakes’ vice president of medical affairs. “Some of our very sick patients live in very rural areas of a few hundred people. It’s mostly ranches out there,” he says. “We are using social workers and case managers to coordinate whatever services are available for those people. It’s hard for one physician with maybe one nurse to do all that. But with a team approach, we have been able to do well by these patients.”

A partnership turned ACO

Although independent, Sky Lakes formed a collaborative with six other Oregon hospitals and health systems: an academic medical center, two large tertiary facilities, and three other small rural hospitals. Named Propel Health, the partnership enables the six organizations to remain independent while supporting one another, particularly in information technology and data analytics efforts.

The partnership also led to the formation of a joint ACO, the Oregon ACO, which is entering MSSP Track 3 in January.

With the ink barely dry on the agreement letters with CMS to participate in CPC Plus and MSSP, Stewart and Niskanen are still weighing what needs to be done to succeed under two Advanced APMs. One of their first tasks will be to determine any synchronicities between the two programs, such as shared performance metrics. “We’re still sorting through how the CPC Plus program interfaces with the MSSP program,” Stewart says.

Maggie Van Dyke is a freelance writer based in suburban Chicago.