As healthcare systems shift to value-based care models at the encouragement of the Centers for Medicare and Medicaid Services (CMS), alternative payment models (APMs) are on the rise. In June 2019, members of TKG attended the National Accountable Care Organization (ACO), Bundled Payment, and Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Summit in Washington, D.C. At the summit, healthcare leaders from payers, health systems, technology companies, and government agencies delivered sessions on the current state and future reach of alternative payment models.
Current State of Alternative Payment Models
CMS is still very committed to alternative payment models, evidenced through the plethora of model options made available to organizations. However, some stakeholders expressed concern over the abundance of models and changing payer rules that give healthcare organizations little time to restructure. The most successful value-based payment models remain those that are simple, reliable, predictable, have transparent data, and incorporate a multi-payer approach.
When evaluating payment models, it is important to evaluate the measures you want to control. Leaders expressed a need to focus on prevention through new models such as the ‘Primary Care First’ model and manage high-spend categories, including ESRD + Kidney and oncology. Another key factor is evaluating who is participating in the models; while CMS prefers voluntary models, they also consider mandatory iterations for high-cost disease states in order to avoid selection biases. New stakeholders also continue to play key roles, with private investors placing money and resources into re-engineering the care delivery system.
Future State of Alternative Payment Models
Leaders recognized that the transition to value takes time, with some leaders estimating as many as four years to realize the impact of new systems of care. The current trajectory towards successful global capitation models is supported by the rise of better, more reliable data when compared to that which was available in the 1990s. For example, reliable data enabled Hawaii Primary Care to recently redesign care to a successful capitated model with a focus on patient engagement, 11 quality measures, and total cost of care.
Critical success factors in alternative payment model design include:
- Quality measures: consolidate measures to a manageable amount so that providers can make a targeted impact
- Patient engagement: encourage shared decision-making to activate patients in their care
- Incentive alignment: tie a significant amount (e.g., 25%) of the provider’s salary to risk to make it meaningful
Lastly, APM model overlap will continue to be a concern and systems should look at satisfying the key components of all these models to not continuously reinvent the wheel. Presenters at the summit were hopeful that major overhaul of the system would occur in the next 10 years.
A new generation of bundled payments will bring other providers into the mix as well as a bigger focus on effective partnerships. The secret to bundled success is engaged physicians, clear workflows, strong analytics, and strategic post-acute networks. CMS is currently studying how they can make episodic models more preventative rather than trigger or event based. Because many healthcare organizations do not trust the targets they are given to meet, target price transparency will be important in creating cohesion. Furthermore, there is a plan to add additional quality measures to BPCI-A model 3, keeping in mind that striking the appropriate balance is important.
Quality measures for ACOs and MIPS should be valid, reliable, and indicate good care outcomes. There has been a shift in payer-provider relationships as value-based care programs have created collaborative relationships between the stakeholders. Health systems are beginning to indicate which measures are important to them based on their current value-based contracting arrangements, and payers are working with them to align their measures accordingly. Commercial payers are increasingly creating value-based programs. For example, Blue Cross Blue Shield NC aims to have 50% of its members seen by a provider who participates in APMs by 2020. Ultimately, most groups recognize that you cannot wait until you are 100% ready to take on risk to jump in. Organizations must start implementing changes now in order to succeed in future markets.
Overall, healthcare leaders encouraged looking past the flaws of certain data to find workable solutions. The path to integrating alternative payment models is changing to fit the needs of stakeholders—health systems, ACOs, providers, payers, and patients.