In 2017, the shift from a fee-for-service model to value-based payments took a bit of a pause due to decisions handed down by the Centers for Medicare & Medicaid Services (CMS), in addition to the distractions caused by efforts to repeal and replace the Affordable Care Act (ACA).

Value-based healthcare in 2018

Will 2018 be a year focused on new initiatives towards value-based healthcare payments, or will it be a repeat of last year?

What does the future hold for value-based payments? We review recent news and the anticipated direction of performance-based reimbursement and penalties in 2018.

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In November 2017, CMS rescinded a rule that mandated the participation of more providers in the Comprehensive Care for Joint Replacement initiative. Furthermore, the scheduled Episode Payment Models and Cardiac Rehabilitation Incentive Payment model (both were to begin on January 1, 2018) – were also removed. Another action taken in the opposite direction of value-based healthcare was the exemption of more physicians from participating in the Quality Payment Program.

Modern Healthcare reports that according to Dr. Ashish Jha, a professor of health policy at the Harvard School of Public Health:

“(The CMS) didn’t retract and didn’t move forward. The move towards value isn’t a one time do it and done. It needs constant refreshing and re-tweaking, and I feel like that didn’t happen this year because I think the administration was distracted by other issues.”

Provider Advocates Push for More Value-Based Payment Models

While some groups of physicians are inclined to pull away from the value-based payment models, others advocate for more opportunities. Health Payer Intelligence reports, “The American Academy of Physicians, Aledade, the Texas Medical Association, Iora Health, and the Medical Group Management Association (MGMA) are among provider advocates urging CMS to create more opportunities for providers interested in value-based payment models with higher financial risk.”

These healthcare organizations collaborated on a letter that was sent to the CMS administrator, Seema Verma. In their statement, they argued that physicians are currently positioned well to excel in payment models designed to reward and penalize healthcare providers financially based on performance. As stated in the letter:

“Physicians — especially independent physician practices — are the linchpin of our nation’s health care system. They have repeatedly demonstrated their superior ability to generate positive results in value-based care arrangements, both in improved health outcomes and reduced costs. They are the most powerful tool we have to foster an affordable, accessible system that puts patients first.”

Within their letter, the organizations encouraged the following from CMS:

  1. Maintain a priority on advanced alternative payment models (AAPMs) led by physicians and accountable care organizations (ACOs) that are physician-led to improve outcomes, value, and independence within the clinical practice
  2. Promote patient choice and competition by leveling the playing field with local markets
  3. Lower barriers to entry through physician-led groups to injecting competition into the Medicare Advantage markets
  4. Support consumer-directed care with programs that offer rewards to encourage beneficiaries to take a more active role in the decisions made in their healthcare plans

Are Value-Based Payments Modifier Programs Fair?

Since the implementation of programs that offer financial rewards to physicians based on performance, there has been concern backed by trends that show disparities could create unfair outcomes for physicians that treat the sicker populations.

A study from Annals looked at the Value-Based Payment Modifier and the implications for disparities:

“The VM (Value-Modifier) was not associated with differences in performance on program measures. Performance differences between practices serving higher- and those serving lower-risk patients were affected considerably by additional adjustments, suggesting a potential for Medicare’s pay-for-performance programs to exacerbate health care disparities.”

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We will continue to monitor and report on the status of value-based payments in healthcare throughout the year.