As hospices explore greater participation in alternative payment models, the Medicare Payment Advisory Commission (MedPAC) is urging Congress to reduce and restructure those programs.
Hospice providers have been eying APMs emerging from the Center for Medicare & Medicaid Innovation (CMMI). These models represent an entry point to value-based reimbursement, as well as a means to support additional business lines such as palliative care, PACE and other services.
MedPAC initially called on Congress and CMMI to streamline those models in its June 2021 report. This year, the commission has outlined specific strategies for executing its recommendation.
“APMs typically give health care provider organizations a financial incentive to furnish a more efficient mix of services and improve the care they deliver,” the new report indicated. “The presence of multiple APMs operating concurrently can create unnecessary complexity and may dilute incentives when Medicare beneficiaries are attributed to more than one model simultaneously and/or when providers participate in more than one APM at the same time.”
A vast range of payment and care delivery systems can fall under the APM designation. One common principle is the concept of a population-based reimbursement.
In this approach, a health care provider agrees to accept responsibility for a group of patients in exchange for a predetermined amount, typically with incentives for cost savings and improved quality.
Examples of APMs or related demonstrations include the value-based insurance design demonstration (VBID), the ACO Realizing Equity, Access, and Community Health (REACH) model, the Medicare Shared Savings Program and the Medicare Care Choices Model.
MedPAC recommends reducing the number of ACO model tracks, of which seven currently exist. The tracks that remain could be reoriented around providers of various sizes and involve different levels of financial risk.
“It is important to ensure that providers have strong incentives to participate in APMs. Acknowledging that not all providers are capable of bearing financial risk under population-based payment models, the Commission does not see a rapid transition to mandatory participation in ACOs as practical,” MedPAC wrote in its report. “We do, however, encourage CMS to explore ways to strengthen incentives to participate in population-based payment models, particularly for larger provider organizations.”
The commission’s recommendations included a number of provisions for ACO arrangements, including a move away from periodic rebasing of spending benchmarks informed by those organizations’ actual spending. Instead, the commission proposed using a specific growth factor to rebase payments.
This would ensure that ACOs that successfully reduce spending are not penalized in subsequent years by having their benchmarks “racheted down.” MedPAC also recommended a national Medicare-run, episode-based payment model that would be mandatory for certain providers.
While the U.S. Centers for Medicare & Medicaid Services (CMS) has not yet commented on the report, CMMI has previously shown an interest in streamlining its models.
CMMI last October announced a “strategy refresh” that would guide development of its future payment models.
The center indicated in a document outlining its new strategy that the complexity of payment policies and overlap between payment models can sometimes result in conflicting or opposing incentives for health care providers.
Among the objectives is to drive expansion of accountable care and increase the number of beneficiaries in relationships with such entities.
These could include physician group practices, Medicare Advantage plans, accountable care organizations (ACO), or PACE programs, among many others. In 2020, 67% of Medicare beneficiaries enrolled in Part A and Part B were in MA plans or were attributed to an ACO, according to CMMI.
“Accountable care is to give all participating providers the incentives and tools to deliver high-quality, coordinated, team-based care that promotes health, thereby reducing fragmentation and costs for people and the health system,” CMMI indicated in the document.
