Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Value-Based Care News

Make Value-Based Reimbursement Implementation Easier, AMGA Says

Value-based reimbursement implementation is critical to reducing costs, but a lack of data access, standardization, and risk-based products is hindering participation.

Value-based reimbursement implementation

Source: Thinkstock

By Jacqueline LaPointe

- Promoting the implementation of risk- and value-based reimbursement models is key to reducing healthcare costs in the US, AMGA recently told policymakers.

“The rising cost of healthcare in this country is an unnecessary burden on all American families and especially impacts vulnerable patient populations. We need to find a way to lower costs while continuing to provide high-quality, value-based care,” AMGA President and CEO Jerry Penso, MD, MBA, stated in response to a Senate Health, Education, Labor, and Pensions (HELP) Committee request.

“Policymakers have made it clear they want to transform the way US healthcare is financed. Ensuring success in value-based arrangements, where providers are accountable for total cost of care, is the best way to accomplish that goal.”

Healthcare spending in the US is unsustainable, stakeholders have argued. CMS actuaries recently predicted national healthcare costs to total almost $6 trillion by 2027 and account for about 19 percent of gross domestic product (GDP).

The American population is quickly aging into the Medicare program, putting significant pressure on the healthcare industry overall.

READ MORE: Best Practices for Value-Based Purchasing Implementation

However, value-based reimbursement can help stakeholders bend the healthcare cost curve and improve outcomes for the aging population, AMGA contended in the March 1 letter.

“A shift toward a value-based approach and away from the fee-for-service system is the most effective way to lower overall costs. We need to align payments with the goals of the healthcare system, and the best way to do this is to reduce the barriers to success in value-based care arrangements,” the association representing approximately 17,000 physicians wrote.

“If it were simpler for practices to participate and succeed in risk, more would adopt the models that incentivize outcomes – better care quality, improved patient experience, and lower costs – rather than volume of services provided.”

Through the association’s annual risk-readiness surveys, AMGA identified access to claims data as a significant challenge to value-based reimbursement implementation. Members of the association have reported in several surveys that the majority of payers do not share claims data with them.

“Without this data, it is challenging to manage the cost and quality of a population of patients, which is a goal of moving to value-based care. In order to accelerate the transition to value, Congress should require federal and commercial payers to provide accurate, timely access to all administrative claims data to healthcare providers in value-based arrangements,” AMGA advised.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

In addition, Congress should also require private payers and providers to standardize data submission and reporting requirements to advance value-based reimbursement implementation, the association recommended.

“Even when providers have access to data, they frequently spend an unnecessary amount of time and resources translating data sets from different types of payers. Different contracts require medical groups to submit varying types of data in various formats, creating a massive administrative burden and a diversion of resources from providing care to reporting data,” AMGA explained.

Value-based reimbursement models require providers to submit large volumes of data to payers, so the insurers can translate outcomes into payments. But the administrative burden of getting data to payers is impeding implementation of value-based models and resulting in higher costs to providers.

For example, a recent AMGA survey showed member groups had to hire 17 IT professionals for every 100 physicians practicing in the medical group.

Additionally, a lack of value-based reimbursement models in the commercial market is a challenge, AMGA stated.

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

Over one-half of providers (59 percent) in the most recent AMGA risk-readiness survey said they have little to no access to commercial value-based reimbursement models involving some level of financial risk in their local market.

“While the percentage represents an increase in payer involvement since our first survey in 2015, it also demonstrates that commercial payers are still largely not engaged in the risk market,” the association wrote.

“Although many of the reasons for this lack of engagement are beyond the control of the health plan, to truly move the healthcare system to value, we need more engagement in the commercial environment. Payers and providers need to develop risk-based arrangements that result in decreased costs and service utilization, improved care, and a more fully aligned financing model for care delivery.”

While AMGA highlighted value-based reimbursement challenges in the commercial market, the association also pointed to public payers. Specifically, AMGA criticized CMS’ implementation of MACRA, the landmark regulation that created the Merit-Based Payment Incentive System (MIPS) and Advanced Alternative Payment Models (APMs).

MACRA programs intend to shift Medicare providers to value-based reimbursement. However, CMS was concerned that the transition away from fee-for-service would negatively impact small practices and solo practitioners.

Therefore, the agency planned to gradually include Medicare providers. For example, approximately 59 percent of providers are currently excluded from MIPS participation in 2019.

But AMGA argued that high-performers suffer from increased exclusions.

“Because MIPS is budget neutral, these exclusions result in insignificant payment adjustments to high-performing providers. For example, it is estimated that high performers will receive an aggregate payment adjustment in 2019 of 1.1 percent, compared to a potential 4 percent allowed in the statute,” the association wrote.

“MIPS no longer rewards providers for superior performance and provides no return on the investments made to improve patient care while saving the system money. Instead of a way to transition to value, MIPS has become an expensive regulatory compliance exercise with little to no impact on quality or cost.”

Congress should no longer permit MIPS exclusions to advance value-based reimbursement implementation. Policymakers should also create policies that promote Advance APM participation to truly move providers to models that effectively reduce costs and improve outcomes through financial risk.

AMGA sees value-based reimbursement implementation as the key to lowering healthcare costs across the industry. The association also called for regulatory relief, patient engagement, and care delivery innovation as other ways to bring down healthcare spending.

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