Task Force Calls on CMS to Encourage Alternative Payment Models

Some strategies are showing promise but require time for real change to occur. Recent CMS moves may be slowing the momentum.

The Center for Medicare and Medicaid Services (CMS) should continue refining existing alternative payment models that are showing genuine long-term promise, says an industry consortium of patients, payers, providers and purchasers.

The Health Care Transformation Task Force (HCTTF) says finding alternatives to the prevailing fee-for-service payment system should be a top priority as CMS reorients the Center for Medicare & Medicaid Innovation’s (CMMI) agenda.

The task force comments came in a letter responding to a CMS request for information about new directions for CMMI, the agency’s test lab for value-based payment models. HCTTF pushed for more innovation, noting that there are attractive private sector models that warrant consideration for testing in Medicare and Medicaid, while also cautioning that the agency should not abandon promising current models.

The healthcare industry has made progress that should be encouraged, says Jeff Micklos, HCTTF’s executive director.

“Transformation of this magnitude takes time, and the results from the current models are paying off,” he says. “The most determinative factor of success in value-based arrangements is the length of time in which a provider participates. More time allows for greater improvements in care delivery.”

CMS recently released the 2016 results of four Medicare Accountable Care Organization (ACO) programs, which reduced gross Medicare spending by $836 million that year, returning $70.6 million in net savings to the Medicare Trust Fund. HCTTF also urged CMS to recognize the major investments stakeholders have made in models such as the accountable care and bundled payment programs as it weighs its program mix going forward.

The task force also asked CMS to refine models to make a better business case for delivery system innovation, noting that providers who have already implemented measures to control cost and improve quality should receive credit when setting future benchmarks.

Even with data showing the benefits of value-based care, healthcare systems are adopting the approach at a modest pace, notes Neil Smiley, CEO of Loopback Analytics, a company that assists healthcare organizations with managing outcome-based care. Systems have been optimized for years around the way people get paid, and that creates a certain inertia, he says.

People are naturally wary of changing established systems upon which their livelihoods depend, he says. Most health systems that have affiliated ACOs or other value-based strategies are doing it as an R&D project, Smiley says, transforming care and gathering data only on parts of their population rather than on a large scale.

The organizations showing the best metrics from value-based care still have the largest part of their business in the more traditional fee-for-service world, Smiley says.

 “The fee-for-service model, love it or hate, is not dying. The organism has adapted,” Smiley says. “For those that were aggressive early adopters of value-based care and really believed what they were hearing, and have gone fully after value-based care, some of them may feel a little exposed. If they go too hard too fast, they may suffer economically if they misjudge the pace at which this moves.”

In 2015, HHS set a goal of tying 30% of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as ACOs or bundled payment arrangements by the end of 2016, and tying 50% of payments to these models by the end of 2018.

With the recent unwinding of mandatory bundled payments, there is reason to question whether the commitment is still there to move to a value-based payment models, Smiley says. The bundled payments spurred significant movement toward value-based care among healthcare organizations, but the CMS backtracking has many thinking they moved too soon, he says.

“The pace at which CMS committed to rolling out value-based care is fundamentally different from the pace we’re currently seeing,” Smiley says. “The progress toward value-based care, instead of this steady momentum they expected, is more of a herky jerky fashion.”