“Lead Dogs” was a term Senator Sheldon Whitehouse used when opening America’s Physician Groups’ (formerly CAPG) Value-Based Colloquium in Washington DC on October 11th. While many hospitals, IDNs, and medical groups are fearful of moving from fee-for-service to value-based care, a number of progressive physician organizations are fully embracing, and even pushing, for this change. Senator Whitehouse’s “lead dogs” reference was used to describe these progressive healthcare organizations that are driven to move this country towards better payment models, to lead by example, to improve quality, and to more effectively manage risk. APG leadership and membership are living and embracing this "lead dog" mentality in many ways but most noticeably via their proposed Third Option–a proposed alternative Advanced Payment Model (APM) within MACRA.
These groups want CMS to provide more advanced APM (value-based) options, as well as to address weaknesses they see within the accountable care organization program. To meet this need, the APG has designed a new payment model that they refer to as the Third Option. (They see traditional Medicare as one option, Medicare Advantage as the second, and their new proposed plan as the Third). The Third Option features prospective, capitated payments, robust quality measurement, and active beneficiary engagement. In 2018, APG highlighted the Third Option in response to a request for information issued by the Center for Medicare & Medicaid Innovation (The Innovation Center) on direct provider contracting models and underscored the importance this forthcoming model will play in advancing the value movement. APG is pressing for this new model in which globally capitated contracts would be created between CMS and capable, quality physician groups that truly operate as clinically integrated organizations. Beneficiaries would be asked to actively enroll, select, and commit to a medical group that they already know and trust; differential cost-sharing strategies would incentivize the beneficiaries to stay within this network. These would be qualifying APMs within MACRA.
APG’s proposed Third Option represents an alternative that offers similarities to the overwhelmingly popular Medicare Advantage program, most notably a capitated arrangement based on the patients’ health risk (determined by HCC coding), and the ability to innovate on ways to provide proactive and coordinated care. Like the direct contracting model being considered by CMS, the payments would flow directly to the medical groups to manage. APG appears to be on the right track and has data to support their findings. Their goals are aligned with what this country needs, namely better quality healthcare at a lower cost. I would stay tuned as they elicit more support across the country and in Washington, DC.
