HHS Goals for Alternative Payment Models and Value Based Payment, Where Are We Now?

on Tuesday, 05 February 2019. All News Items | Medicare Coverage | Documentation | Billing

Better Care, Smarter Spending, and Healthier People

“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and then starting on the first one.”

  • Mark Twain

January 26th marked the four year anniversary of the Department of Health and Human Services (HHS) announcing specific measurable goals and timeline to move Medicare and the health care system at large away from payment based on quantity of care towards payment based on quality. CMS noted this was the first time in the history of the Medicare program that HHS had set explicit goals for Alternative Payment Models (APMs) and Value Based Payment (VPB).

Alternative Payment Models (APMs) Goal
Percent of Medicare Payments in APMsYear
30% By end of 2016
50% By end of 2018
Examples of APMs: Medicare Shared Savings Program (MSSP), Pioneer Accountable Care Organizations (ACOs), Bundled Payment for Care Initiative and the Comprehensive Primary Care Initiative

Value Based Payments Goal
Percent of Medicare Fee-for-Service Payments Tied to Quality or ValueYear
85% By 2016
90% By 2018
Examples of Programs that tie Hospital Payment to Quality of Value: Hospital Value Based Purchasing (VBP) Program, Hospital Readmission Reduction Program (HRRP) and the Hospital-Acquired Condition (HAC) Program

Value Based Payments GoalPercent of Medicare Fee-for-Service Payments Tied to Quality or ValueYear85%By 201690%By 2018Examples of Programs that tie Hospital Payment to Quality of Value: Hospital Value Based Purchasing (VBP) Program, Hospital Readmission Reduction Program (HRRP) and the Hospital-Acquired Condition (HAC) Program

At the same time HHS announced the creation of the Health Care Payment Learning & Action Network (HCP-LAN) aimed at serving as a forum for payers, providers, employers, purchasers, state partners, consumer groups and the individual consumer to discuss how to transition towards alternative payment models emphasizing value.

Just 2 days after the HHS announcement, on January 28th, 2015, the Health Care Transformation Task Force challenged providers and payers to join them in their commitment to put 75 percent of their business into value-based arrangements focusing on the Triple Aim of better health, better care and lower costs by 2020. Four years later where are we now?

Health Care Payment Learning & Action Network Update

CMS’ Innovation Center includes a web page dedicated to HCP-LAN. This webpage includes a background about the network, initiative details, a twelve page document of participating organizations, and notes this is an ongoing model categorized as an initiative to speed the adoption of best practices.  Ahead of the year end 2016 goal, posted on this web page is the March 3, 2016 milestone of 30 percent of Medicare payments now being tied to quality through APMs. 

LAN Measurement of the Health Care Payment Landscape

Annually the HCP-LAN has released a report based on a national data collection effort aimed to measure the implementation of APMs. Before the annual reports, a first step taken was to convene a work group to develop the APM Framework. The Framework was refreshed in 2017 and contains four categories. Categories 2 through 4 also has sub-categories.

APM Framework

  • Category 1: Fee-for-Service – No Link to Quality & Value
  • Category 2: Fee-for-Service – Link to Quality & Value
    • 2A: Foundational Payments for Infrastructure & Operations (e.g., care coordination fees and payments for HIT investments)
    • 2B: Pay for Reporting (e.g., bonuses for reporting data or penalties for not reporting data)
    • 2C: Pay-for-Performant (e.g., bonuses for quality performance
  • Category 3: APMs Built on Fee-for-Service Architecture,
    • 3A: APMs with Shared Savings (e.g., shared savings with upside risk only)
    • 3B: APMs with Shared Savings and Downside Risk (e.g., episode-based payments for procedure and comprehensive payments with upside and downside risk)
  • Category 4: Population Based Payment
    • 4A: Condition-Specific Population-Based Payment (e.g., per member per month payments, payments for specialty services, such as oncology or mental health)
    • 4B: Comprehensive Population-Based Payment (e.g., global budgets or full/percent of premium payments)
    • 4C: Integrated Finance & Delivery System (e.g., global budgets or full/percent of premium payments in integrated systems)

2018 APM Measurement Effort

The 2018 APM Measurement Effort published in October of 2018 was a collaborative effort between the HCP-LAN, America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association (BCBSA), and CMS. Look-back data for CY 2017 collected at the Category Level included “Seventy (70) health plans, 3 managed FFS Medicaid states, and Medicare FFS, representing almost 241 million of the nation’s covered lives and 82% of the national market.” The combined data revealed the following Category Level payments made in CY 2017 in all lines of business:  

  • 43% of health care dollars in Category 1 (Fee-for-Service – No Link to Quality & Value),
  • 24% of health care dollars in Category 2 (Fee-for-Service – Link to Quality & Value),
  • 29% of health care dollars in Categories 3 (APMs Built on Fee-for-Service Architecture), and
  • 4% of health care dollars in Category 4 (Population-Based Payment).

The 2018 Report was the first time the HCP-LAN reported payment data by line of business.

  • Medicare Advantage had 49.5% of health care dollars in Categories 3 and 4
  • FFS Medicare had 38.3% of health care dollars in Categories 3 and 4
  • The Commercial Line of business had 28.3% of health care dollars in Categories 3 and 4, and
  • Medicaid had 25% of health care dollars in Categories 3 and 4.

A related Press Release notes “this granular data provides more actionable insights into the state of APMs in the commercial, Medicaid, Medical Advantage, and FFS Medicare markets. When comparing APM adoption across different market segments, it is clear which markets are driving the overall adoption of value-based payments.”

Health Care Transformation Task Force

As previously mentioned, the Health Care Transformation Task Force (HCTTF) and its members are committed to the goal of having 75% of their business operating under value-based payment arrangements by the end of 2020. They define value-based arrangements as those that “successfully incentivize and hold payers and providers accountable for the total cost, patient experience, and quality of care for a population of patients, either across an entire population over the course of a year or during a defined episode that spans multiple sites of care.”

In December 2018, the Task Force announced that its provider and payer members had nearly half (i.e., 47%) of their business in value-based payment arrangements at the end of 2017. This continued the positive trend of participation in value arrangements of 30% in 2015 to 41% in 2016.

American Hospital Association

In January 2019 the American Hospital Association (AHA) posted an infographic highlighting the significant time and resources hospitals and health systems have invested in Accountable Care Organizations saving “millions of dollars for patients and for Medicare while delivering high quality, coordinated care.”

So, where are we now? It appears the HCP-LAN, HCTTF, and Hospitals nationwide understand Mark Twain’s secret of getting ahead.

 

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-eight years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. 

In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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