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What We’re Watching: April 23, 2019


In a speech to the National Business Group on Health, HHS Secretary Alex Azar prodded employers to play a leadership role in the transition to value. Azar highlighted the potential of engaging in direct contracting with health systems and providers, utilizing centers of excellence, giving employees tools to choose high-value care and avoiding plans with “backdoor rebates” for pharmaceuticals. Azar cited the finding that the percentage of large employers directly contracting with health providers is expected to rise from 3 percent to 11 percent in 2019, respectively.

What we’re saying: We are starting to see more partnerships between local health systems and national employers in their communities to manage employee wellness and overall healthcare costs. As Premier COO Michael Alkire noted in The Health Care Blog earlier this month, these two groups are bypassing traditional third-party payers to pursue a new financial and care delivery model focused on affordability, quality and convenience.


CMS just announced two new alternative payment models that are intended to move healthcare providers away from fee-for-service and toward value-based care. CMS’s Innovation Center will test new direct contracting models that allow capitated payments and global budgets, as well as a set of voluntary five-year payment model options called Primary Care First that are based on the underlying principles of the existing CPC+ model design.

What we’re saying: Premier is encouraged that the direct contracting model has a number of elements for which we’ve advocated for over the years, including allowing primary care capitation and global budgets for providers who are ready for greater risk. We’re also pleased that the models will provide a quality bonus, coordinate with PACE and Medicaid, focus on chronic care and allow a testing year for participants. We are looking forward to getting more details and helping CMS refine the models, particularly to ensure that the approach to benchmarking and addressing overlap with existing models enables their success.


CMS announced the Office of the National Coordinator for Health IT (ONC) granted a 30-day extension for comments on the health information technology interoperability and patient access to data rules. The new submission deadline is June 3, 2019.

What we’re saying: Given the complexity and far-reaching implications of the proposed rules, Premier led a group of 20 organizations in urging for such an extension. We commend CMS and the ONC for moving forward with this extension.


CMS released four separate post-acute care FY20 payment rules. Each proposed rule is slated to take effect on October 1, 2019:

What we’re saying: On the subject of rules, Premier reviewed the Medicare Advantage (MA) regulatory changes in the 2020 Rate Announcement, Call Letter and Final Rule in a webinar last week. The rule includes a higher-than-expected 2.5 percent rate increase, flexibility to add new supplemental benefits and risk adjustment changes. It also underscores the administration’s focus on growing MA, which is growing at 8 percent in 2019 and currently providing healthcare coverage for approximately 22 million people (34 percent of Medicare beneficiaries).


What We’re Watching is a weekly blog focused on the current events Premier is following and their relevance to the work of Premier and its members.

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