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CMS Says Alternative Payment Models Still Have a Way to Go

The transition from traditional, fee-for-service reimbursement to value-based alternative payment models is doable, CMS says. But there is still room for progress.

By Jacqueline DiChiara

- Leading healthcare experts are speaking out about whether or not the healthcare industry is making progress in regard to alternative payment models. The healthcare industry is apparently on the right track thus far.

alternative payment models

Thirty percent of all Medicare payments will be tied to value instead of traditional, fee-for-service reimbursement by the end of this year, announced Sylvia M. Burwell, Secretary of the Department of Health and Human Services, early last year.

Within the next two years, half of all payments to Medicare are to be assessed according to value over volume.

“The goal is straightforward but ambitious: Replace the nation’s reliance on fragmented, fee-for-service care with comprehensive, coordinated care using payment models that hold organizations accountable for cost control and quality gains,” explained a report from the State Health Care Cost Containment Commission.

According to the Centers for Medicare & Medicaid Services (CMS), this historical value-based objective for Medicare is indeed doable.

Earlier this month, healthcare leaders shared their views at a panel sponsored by The Hill.

“We think we’ll reach that goal,” stated Patrick Conway, MD, MSc, CMS Chief Medical Officer, to The Hill last week.

The healthcare industry has been more focused over the past several years on promoting transparency and the creation of “a public-private partnership,” he said.

“Delivery system reform truly is, and should be, a bipartisan issue that we can communicate clearly,” Conway added. 

“I don’t think we’ve communicated this well. I don’t think the average consumer across America really gets it at the level that we need to. We’re not there yet.” 

“We’re just at the beginning of a sea change,” asserted Marc Boutin, CEO of the National Health Council, during the panel.

“We are now beginning to ask patients for the first time: What is value to you?” 

Conway’s recent comments echo ones he made several months ago regarding how alternative payment models may bring about industry progress and advancement.

“The last five years have seen the most positive delivery system improvements in our nation’s history, and we are committed to accelerating that progress,” Conway wrote on CMS’s blog last November.

“These new approaches, part of the bipartisan Medicare Access and CHIP Reauthorization Act, will give physicians and other practitioners the opportunity to be rewarded for providing high quality care at lower costs, will reduce administrative burden, and will enable doctors to spend more time with their patients.”

There has, nonetheless, been some pushback regarding how effective alternative payment models actually are for physicians.

According to a recent report from the Center for Healthcare Quality and Payment Reform, the Merit-Based Incentive Payment System (MIPS) presents several disadvantages for physicians compared to other payment  models, such as the shifting of financial risk from payers to physician practices.

"Many of the alternative payment models currently being implemented in Medicare not only fail to solve the problems in the current payment system, they can actually make things worse for physicians who want to improve care and reduce spending,” stated Harold D. Miller, CHQPR’s President and CEO.

“MACRA does not require that a payment model has to have been tested and evaluated by the Center for Medicare and Medicaid Innovation (CMMI) or expanded nationally in order to qualify as an alternative payment model,” he stated.

David Muhlestein, PhD, Senior Director of Research of Development at Leavitt Partners, expressed similar ideas about alternative payment models’ possible limitation to last March, following Burwell’s announcement.

“In the short term, there is definitely opportunity to focus on the volume of services, but in the longer term it’s about reducing the need for higher-acuity service,” Muhlestein stated.

Although value-based models are not necessarily “going to be the silver bullet that solves all of the healthcare cost problems in America,” they may help slow the increase of healthcare expenditures, he added.

“If you really are providing better care at a lower acuity setting then you’re going to end up with better health outcomes. Value-based payments have a modest opportunity to lower the costs and a stronger opportunity to improve the quality of care.”

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