Lawmakers recently introduced the Value in Health Care Act, which, if enacted, could create inroads toward improved palliative care reimbursement.
A new version of the Value in Health Care Act includes updates to program parameters of Alternative Payment Models (APMs) to incentivize participation in Accountable Care Organizations (ACOs).
These changes are designed to increase participation in value-based payment programs designed to improve quality outcomes and lower costs of care.
One potential impact of the legislation is to align palliative care payment in value-based reimbursement systems, according to Allison Silvers, chief health care transformation officer at the Center to Advance Palliative Care (CAPC).
“The act is talking about doing a better alignment between payers and better clarity around what outcomes providers are trying to achieve,” Silvers told Palliative Care News. “With that alignment, palliative care has a stronger case to greatly improve quality and reduce spending. The more providers focus on that value, the more it becomes feasible for them to align palliative payment so it’s not these dribs and drabs of reimbursement here and there.”
The bipartisan legislation was introduced in December 2023 by Sens. Sheldon Whitehouse (D-R.I.), Dr. John Barrasso (R-Wyo.), Peter Welch (D-Vt.), Thom Tillis (R-N.C.), Bill Cassidy (R-La.), John Thune (R-S.D.) and Marsha Blackburn (R-Tenn.).
The Value in Health Care Act includes updates around current incentives for health care providers to participate in certain risk-bearing alternative payment models such as ACOs. The legislation proposes to extend a 5% one-time payment incentive for palliative physicians and other clinicians who take on increased financial risk through participation in advanced APMs and ACOs.
The bill builds upon the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, designed to speed transitions to patient-centered, value-based care. MACRA established the 5% incentive, with Congress later passing a 3.5% extension of MACRA’s advanced APM incentive in the Consolidated Appropriations Act of 2023, which expired at the end of last year.
The Value in Health Care Act would extend the 5% incentive into 2024 and 2025 — a move that could foster greater opportunities for palliative care providers working in alternative payment systems, according to David Pittman, director of communications and regulatory affairs at the National Association of ACOs (NAACOS).
“This extra payment is a valuable incentive to transition to payment models that reward providers for focusing on quality improvement and cost-lowering efforts,” Pittman told Palliative Care News in an email. “It helps offset the costs of rebuilding care teams, installing information technology and redesigning work flows to be successful in these models. Success in alternative payment models comes by improving access to care and proactive outreach to patients with multiple chronic conditions. This takes time and resources, which the 5% incentive payment helps offset.”
If enacted, the legislation could also help the U.S. Centers for Medicare & Medicaid Services (CMS) develop more transparent financial benchmarks that account for regional variations in health care spending, Pittman added.
It would direct CMS to establish a voluntary, full-risk payment track within the Medicare Shared Savings Program (MSSP). Doing so would offer a “better steppingstone” for providers to participate in MSSP, among others such as the ACO Realizing Equity, Access, and Community Health (REACH) model, he stated.
“Many Medicare Advantage plans and ACO REACH organizations are indeed exploring palliative care and/or concurrent hospice care, and as efforts expand in those areas – and perhaps if this bill aligns MA and CMS efforts – there may be more rapid diffusion as time goes on,” Silvers said. “It gets problematic because of the funds. If an ACO invests in supporting palliative care and giving additional money to the palliative care program because of its potential impact on spending, then they have to give that money right now.”
After a performance year goes by, a hospice may wait six months or longer to receive their portions of the shared savings, according to Silvers.
According to Sen. Whitehouse’s Office, the Value in Health Care Act would make the following changes to the APM and ACO parameters:
- Incentivize participation in Advanced APMs by extending the annual lump sum participation bonus for an additional two years.
- Correct arbitrary thresholds for Advanced APM qualification to better reflect the existing progress of the value-based movement and to encourage bringing more patients into this model of care.
- Establish guardrails for CMS to ensure that the process to set financial benchmarks is transparent and appropriately accounts for regional variations in spending to prevent arbitrary winners and losers.
- Remove barriers to ACO participation by eliminating arbitrary program distinctions so all participants are participating on a level playing field.
- Support fair and accurate benchmarks by modifying performance metrics so participants aren’t competing against their own successes in providing better care.
- Provide greater technical support to ACO participants to cover the significant startup costs associated with program participation.
“There’s a lot of quality improvement in care that can be had from end-of-life care,” Pittman said. “That opens the door to great potential for palliative care. If those providers can prove they can improve patient outcomes and lower the cost of care, then they can either benefit existing ACOs or form their own ACOs.”
Companion legislation of the bill with similar provisions was introduced on the House floor in July 2023 by Reps. Darin LaHood (R-Ill.), Suzan DelBene (D-Wash.), Brad Wenstrup, (R-Ohio), Earl Blumenauer (D-Ore.), Dr. Larry Bucshon (R-IN) and Dr. Kim Schrier (D-Wash.).
These regulatory efforts are focused on breaking down barriers within the nation’s health care payment system that prevent utilization of quality services, according to Blumenauer. If enacted, the Value in Health Care Act could strengthen financial performance tied to quality rather than the quantity of services, he said.
“For too long, our health care system has prioritized volume over value,” Blumenauer said. “This is unsustainable for providers, patients and the federal government. It is time we move toward a future that lowers costs while maintaining high-quality care for patients.”