Nearly 35% of total healthcare payments in 2017 involved alternative payment models, rising 6 percentage points from a year earlier, according to a report released Monday by the public-private partnership Health Care Payment Learning and Action Network at its 2018 Summit. The percentage of healthcare payments tied to such APMs has increased steadily from just 23% in 2015.
But 41% of healthcare dollars still go to solely fee-for-service care, the report notes. A quarter of spend resides in FFS with some link to value-based systems and the remaining 34% is in APMs built on FFS infrastructure or pure population-based payment. The majority of money in the latter group focuses on shared savings.
The report, touted as the largest measurement effort of its kind encompassing 77% of covered Americans, notes there are continued opportunities to boost episode- and population-based payments with additional risk, as only 12.5% of overall payments in 2017 involved APMs in that category.
Alternative payment models are key to the future of value-based payment reform as the government touts that track of MACRA and pushes providers to take on more risk.
America's Physician Groups on Monday launched a task force to develop future advanced APMs. The models can include anything from shared savings, shared risk, bundled payments and population-based reimbursement and were the focus of annual conference of the group launched by HHS in 2015 to drive the shift toward APMs.
Along with its findings on value-based payment allotment, the report also compares APM adoption across different market segments.
Half of the dollars that went into Medicare Advantage were spent on some form of APM in 2017, while FFS Medicare saw only 38% of the spend in that category. Commercial business had 28% of healthcare dollars in APMs and Medicaid just 25%.
Steven Farmer, senior advisor and senior medical officer at the Center for Medicare and Medicaid Innovation, said he was particularly surprised by the "tremendous" amount of FFS money flowing in Medicare, a fact that showed in his opinion that commercial bodies have "more nimbleness" than the government in moving to APMs.
Messages were mixed about the role of government in fostering APM adoption, however.
CMS Administrator Seema Verma, HHS Secretary Alex Azar and CMMI director Adam Boehler all pointed to the private sector as the primary driver for change.
But a poll from a morning session of roughly 40 attendees found that government was in one of the strongest positions to speed up the transition to value-based payment.
"I think the government is a leader in these things," said Danielle Lloyd, senior VP for private market innovations and quality initiatives for clinical affairs at America's Health Insurance Plans. "The new CMS proposed rule has really charted the course to risk."
More risk, please
Although shared savings gets people comfortable with the models, organizations that are truly committed to value-based payment models need to be willing to put their money where their mouth is, said Seth Morris, director of network development at Anthem.
"There's no downside" risk, Morris said.
Mark McClellan, a former CMS administration under President George W. Bush and co-chair of the LAN guiding committee echoed that sentiment.
"While we celebrate the increase in overall APM adoption, we also know further progress on payment reform will be important to ensure healthcare dollars flow through models that have more risk," McClellan said in his opening comments.
But not all industry groups are as starry-eyed. Reception (and message) is mixed from CMS around forcing risk payments, and Verma provided no clear answers in a pre-recorded introduction for the summit.
She did, however, use her opening speech to introduce a new CMS initiative called the AI Health Outcomes Challenge. The program urges data scientists, entrepreneurs and other parties to develop new quality measures and reporting strategies that will reduce unnecessary regulatory burden on providers — and it will incentivize them with a prize. The public can expect more details on the program "over the coming weeks," Verma said.