Comments in Response to CMS RFI on “Direct Provider Contracting Models”

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May 12, 2018

Dear Administrator Verma and CMMI Director Boehler,

The Association of American Physicians & Surgeons (“AAPS”) is a non-profit membership organization of physicians and surgeons who are mostly in small, independent practices.  Founded in 1943, AAPS defends and promotes the practice of private, ethical medicine.  AAPS has members in virtually every specialty and State, and AAPS speaks out frequently about issues concerning patients and medical practice.  HHS favorably cited a comment by AAPS in connection with the landmark Privacy Rule.  65 FR 82462, 82468 (Dec. 28, 2000).  Our legal filings have also been cited favorably by the U.S. Supreme Court and appellate state and federal courts.

Thank you for this opportunity to submit comments in response to the CMS Center for Medicare and Medicaid Innovation Request for Information (RFI) on “Direct Provider Contracting” models.

We appreciate the stated goals of CMS to “empower beneficiaries as consumers, increase choices and competition to drive quality, reduce costs and improve outcomes.”  Increasingly Medicare bureaucracy is harming the quality of patient care, decreasing access to care, and driving up costs.

President Trump has asked for “big and bold” changes. AAPS agrees that such changes will be required in order to achieve these goals. However the RFI announcement indicates CMS may not be headed in a direction that offers the big and bold changes needed to increase the availability of low-cost, high-quality care.

Our concerns about the RFI include the following:

The key ingredient to the success of Direct Primary Care or Direct Patient Care arrangements is mutual agreement between patient and physician about what type of care is expected and how much it will cost.  We are disappointed with the manner in which the RFI announcement turns the concept on its head. The title of the RFI itself signals an unfortunate transformation of DPC from Direct Patient Care into what CMS calls, “Direct Provider Contracting.”

We are concerned that CMS is not encouraging direct arrangements between patients and physicians. The RFI explains that to CMS, DPC means “direct provider contracting (DPC), through which CMS would directly contract with Medicare providers.” In addition, CMS asks for feedback on countless requirements and conditions it is considering imposing on physicians seeking to contract with CMS. To us and our members, this approach by CMS looks much more like yet another third-party-controlled ACO or capitation scheme than anything resembling the agreements Direct Primary Care practices are currently offering their patients.

Top-down payment experiments have a history of falling short of expectations:

A 2018 Avalere study reports: “CBO estimated in 2010 that shared savings ACOs would save the government $1.7 billion from 2013 to 2016. However, the program has increased spending by $384 million over the period.” In addition, capitation and related models reduce accountability to the patient and make each office visit a liability financially.

Further, the constraints on the DPC models CMS appears to favor would circumvent features of DPC which offer significant value for patients (and potentially taxpayers).  Many DPC practices offer patients free, or low cost, access to certain diagnostics and prescription drugs at near wholesale pricing.  For example, a 72-year-old female patient with multiple chronic conditions purchases all nine of her medications through a Direct Primary Care office for $14.63/month. Through her Medicare “coverage” her cost would be $294.25 per month. The current RFI signals CMS is headed in a direction that would significantly curtail, if not block, the ability of DPC practices to offer innovative cost saving services to patients, outside of Medicare red tape and overregulation.

We propose an alternative to empower patients:

We realize it is unlikely that CMS will abandon either ACO models or plans to implement its vision for “direct provider contracting.” Yet, we encourage CMS to also allow models that empower beneficiaries with the ability to spend their Medicare benefits for the doctors and care of their choosing.

“[V]alue is not accurately determined by arbitrary authorities or central planners,” explained Secretary Azar earlier this month in a talk before the World Health Care Congress. We agree, and ask CMS to consider allowing a “big and bold” option to put patients back in the driver’s seat: let patients directly contract with the physicians of their choice at a mutually agreed upon price for desired medical care. The patients could have the option of filing a Medicare claim for reimbursement of the portion of the bill that Medicare agrees to pay. Or CMS could consider crediting direct patient payments to the beneficiaries’ Medicare deductible, or cost-sharing requirements.

Empowering patients in this way would be a small but significant step towards complying with Section 1801 of the Social Security Act:

Sec. 1801. [42 U.S.C. 1395]  Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.

Too often, Section 1801 is brushed aside by CMS and Congress; it is past time to seek solutions to rein in past overreach to benefit patient care and the practice of independent, high-quality medicine.

Additional solutions to foster direct patient contracting:

In addition to consideration of the above proposition, we also ask CMS, as it moves forward with launching new models, to resolve existing friction points for physicians already serving Medicare- and Medicaid-enrolled patients outside of those programs. Especially given the current unsustainable fiscal trajectory of government health spending, it is in the public interest to reduce barriers that impede the choice of beneficiaries to spend their own money for care.

There are three items in particular which we ask CMS to address:

1) Remove Red Tape for Patients of Physicians Opted Out of Medicare

We ask that 42 CFR § 405.415(h) and (o) be revised to better comply with the administrative simplification directives of the Trump administration and statutes as revised by MACRA. In fact, if CMS is looking for a regulation to revoke in accordance with the Executive Order on “Reducing Regulation and Controlling Regulatory Costs,” which requires the elimination of two regulations for every new regulation, then 42 CFR § 405.415(o) is an excellent regulation to consider for deletion.

The MACRA statute reduces regulatory burdens on physicians opted out of Medicare, but corresponding regulations on private contracts between opted out physicians and their patients were not properly revised in past rulemaking.  It is no longer proper, or statutorily justified, for a contract between a patient and opted out physicians to be required to be tied to a 2-year period. The private contract could be valid for an indefinite period, as long as the physician remains opted out, and if mutually agreed upon by both the patient and physician.

The elimination of 42 CFR § 405.415(h) and (o) would advance the goal of “reducing barriers to choice and competition and increasing the availability of high-quality care at affordable prices.”

2) Enforce Rules Allowing Physicians Opted-Out of Medicare to Order and Refer

While CMS has issued clear rules allowing physicians who are opted out of Medicare to order, prescribe and refer for their Medicare patients (42 CFR §424.507 and §423.120), the contractors administering Part B often fail to properly follow these rules.  Patients of Medicare opted-out physicians are frequently finding that Medicare contractors are rejecting claims for services ordered by their doctor.  We ask CMS to hold the contractors accountable for following the rules and processing claims for these patients’ care.

3) Revise and clarify Medicaid rules harming Medicaid patients’ access to independent physicians

ACA Section 6401(b) requires physicians ordering and prescribing for Medicaid patients to be enrolled in Medicaid. This creates barriers for Medicaid patients who wish to self-pay to receive medical care from a Direct Primary Care (or other 3rd party free physician) but wish to use their Medicaid benefits for prescriptions, labs, imaging or other needed diagnostics. This is particularly a problem for Medicaid patients seeking treatment for opioid addiction.

In prior rulemaking, CMS has stated the following: “State Medicaid agencies may implement a streamlined enrollment process for those providers who only order or refer, that is, who do not bill for services, similar to the CMS–855–O process in the Medicare program. ”

Page 5905: https://www.gpo.gov/fdsys/pkg/FR-2011-02-02/pdf/2011-1686.pdf

However, some states still claim their hands are tied by CMS, and these states are refusing to allow cash-based physicians the opportunity to enroll solely for the purposes or ordering, referring, and prescribing.  Medicaid patients are thereby losing flexibility to consult a doctor of their choice, even if they are willing to pay for the physician out of pocket. Blocking these patients’ ability to work with direct-pay physicians is harmful to these patients and is bad public policy as it increases costs to taxpayers.

We ask CMS to clarify guidance and regulation to encourage and expand the ability of direct-pay practices to serve these patients, who are too often unable to access care within the Medicaid system.

Similarly, certain states hold the position that cash-pay physicians are summarily prohibited from privately contracting with Medicaid patients.  We know of no federal regulation or statute prohibiting this and we ask CMS to encourage states to allow increased freedom of physician choice for Medicaid patients.

Conclusion

Thank you for considering our foregoing comments. To increase choice and competition, reduce costs, and improve outcomes, we request that CMS make regulatory changes that would transfer control to patients in a significantly more meaningful manner.

Respectfully submitted,

Jane M. Orient, MD
Executive Director
Association of American Physicians and Surgeons
[email protected]
520-327-4885

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