08 Feb Championing the Move to Value-Based Care
With the passage of the Affordable Care Act (ACA), the Medicare program embarked on a significant journey toward a value-based payment and care delivery system. The broad goal was to achieve a transformed system focused on the value of the care received by patients over the volume of services furnished by providers.
The ACA included two major initiatives to promote value-based payment: (1) a new Center for Medicare & Medicaid Innovation to conduct modernized testing and iteration of alternate payment models; and (2) the Medicare Shared Savings Program, a voluntary yet permanent program for providers wishing to participate in Accountable Care Organizations.
Ten years in, value transformation is fundamentally changing the way health care is delivered and paid for – both in Medicare and increasingly in Medicaid and commercial insurance too. Greater incentives to coordinate care and financial performance benchmarks have been designed and refined to make care more efficient, less costly, and with better outcomes. The journey is challenging and the work hard, yet the benefits are paying off.
Through the resources that follow, the Health Care Transformation Task Force explains and amplifies how value-based payment and care delivery is changing our nation’s delivery system for the better. We look forward to continued progress over the next ten years!
Policies that Advanced Value-Based Care
The Medicare Access and CHIP Reauthorization Act of 2015: Incentivizing Value Over Volume
MACRA was signed into law on April 16, 2015 and fundamentally changed the methodology for how Medicare pays for physician services to provide greater system stability and promote value-based principles. This bipartisan legislation made critical advancements to transform care delivery by further shifting the Medicare payment paradigm from fee-for-service (FFS) to a modernized, value-based payment system.
The Center for Medicare and Medicaid Innovation: Paving the Way for Value-Based Payment Reform
The Center for Medicare and Medicaid Innovation (CMMI or CMS Innovation Center) was established in 2010 by the Patient Protection and Affordable Care Act to test innovative health care payment and care delivery models that reduce federal health care expenditures while preserving or enhancing the quality of care for Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) beneficiaries. Over the last decade, CMMI has spurred positive reforms in health care delivery by playing a key role in the proliferation of value-based payment and alternative payment models (APMs) that tie reimbursement to the quality and efficiency of care rather than the volume of services provided.
Accountable Care Organizations: A Gateway to a Value-Based Delivery System
Value-based payment policies and models, including Accountable Care Organizations, have contributed greatly to bending the cost curve of national health expenditures over the last ten years. ACOs have contributed to slowing the growth in health care costs, have demonstrated improved care coordination and quality, promote the shift to value-based care, increase the use of preventive care, and improve the health care systems’ ability to respond to emergencies.
Impact of the Medicare Shared Savings Program
The Medicare Shared Savings Program (MSSP) is the largest ACO program operated by the Centers for Medicare and Medicaid Services (CMS). While MSSP has been successful, the total number of MSSP ACOs declined and the growth rate of beneficiaries covered has slowed since the implementation of the Pathways to Success. This trend, combined with the CMS decision to bar new ACO applicants for 2021 in response to COVID, threatens to further slow the momentum of MSSP at a time when the program is showing scalable success.
CMS Innovation Center Models
Success of the Pioneer ACO
The success of the Pioneer ACO demonstration resulted in its certification for permanent inclusion in Medicare. The core of the Pioneer ACO model created a new ACO track under the MSSP program and informed the creation of the Next Generation ACO model.
Impact of the Next Generation ACO Model
Participants in the Next Generation ACO model have demonstrated success in terms of controlling costs for Medicare and improving care for seniors. In the first three years of the program, the Next Generation ACO model produced $358M in net savings through improved care coordination for Medicare beneficiaries. While a perfect value-based payment model has not yet emerged, the alternative to fee-for-service remains an outdated system that is costly, unsustainable and fails to put patients first.
Impact of the Bundled Payments for Care Improvement Advanced Initiative
Bundled payment models play a critical role in the APM ecosystem by engaging specialists on improving quality and reducing costs for specific services or conditions that would be difficult to address through other APM approaches. The Centers for Medicare and Medicaid Services’ decision to iterate on the BPCI Classic model to design the BPCI Advanced model allows providers who invested in episode-based models to continue to pursue their care delivery reform efforts.
Success of the Medicare Diabetes Prevention Program
A major challenge in evaluating prevention programs is the often-lengthy delay between the initial intervention and the full benefits. The demonstrated long-term successes of the diabetes prevention program warrants a renewed discussion within CMS on strategies for evaluating the impacts of CMMI prevention-focused models that extend beyond the model performance period.
Impact of the ACO Investment Model
The AIM ACO demonstration reflects the importance of up-front investment in establishing and operating an ACO. For those interested in participating in small or rural ACOs but without the financial wherewithal to do so, the AIM investment dollars created a win-win-win situation for the participating ACOs, their assigned beneficiaries, and the Medicare Trust Fund.
Impact of the Comprehensive Care for Joint Replacement Model
The CJR Model is a five-year demonstration that is scheduled to end December 31, 2020. In the first two years of the CJR Model, hip and knee replacement episode payments decreased by 3.7 percent, with estimated net savings to Medicare of $17.4 million and gross savings of $146.3 million. Given the favorable evaluations, CMS issued a 2020 proposed rule that would extend the model an additional three years and make other adjustments to the model design, most notably, the addition of outpatient LEJR procedures. If finalized, the model extension will allow for CMS to evaluate these changes and determine whether the model should be further expanded in scope or duration.
Maryland All-Payer & Total Cost of Care Models
CMMI was essential to the reimagining of the 1970’s era Maryland rate setting system. CMMI’s ability to test the unique payment reform approach central to the Maryland All-Payer Model generated valuable data to inform the development of the more mature Total Cost of Care Model, which addresses the challenge of aligning hospitals and primary care.
Home Health Value-Based Purchasing Model
The results of the HHVBP model are promising and the Task Force supports CMS’s notice of intent to expand the model (the new administration has not indicated to date any intent to change plans regarding this model’s expansion plans). CMS should design the expanded model to include new strategies that better engage patients, which would address an important concern raised in recent model evaluations.
Initial Impact of the Accountable Health Communities Model
The Accountable Health Communities Model is the first model to look beyond clinical outcomes to test if identifying and addressing Health Related Social Needs reduces costs and leads to effective (i.e. less unnecessary) health care utilization. The initial results of the Accountable Health Communities Model are promising, showing reduced ED visits for Medicare participants in the Assistance Track of the model.
Impact of the Global and Professional Direct Contracting Model
The Global and Professional Direct Contracting (GPDC) Model was developed to provide greater attention to beneficiaries’ health needs, reduce provider administrative burden, and reward providers for high value care. The model built on lessons learned from the Medicare Shared Savings Program and the Next Generation ACO model and as of 2023 transitioned to the ACO Realizing Equity, Access, and Community Health (REACH) model.
Assessing the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model
Effective January 1, 2023, CMS Innovation Center’s GPDC Model transitioned to the ACO REACH Model. The new model modifies GPDC to advance the Biden Administration’s vision of creating a health system that achieves equitable outcomes.