More evidence shows doctors leery of risk in payment models
- Physician practices, especially those covering multiple specialties and markets, report high levels of financial risk aversion when it comes to adopting new alternative payment models, a just-released RAND-American Medical Association study finds. The problem is particularly acute among practices that have suffered losses in APMs or have little experience managing risk.
- Smaller practices view the debt they incur to fund infrastructure changes to support APMs as yet another form of financial risk — on top of the risks in the model itself.
- Part of the problem may be not enough simple options for doctors. Practice leaders and market observers across the board reported increasing complexity of payment models and accelerating rate of change. The analysis of 31 physician practices in six markets updates a 2014 study that seeks to understand how APMs affect various aspects of physician practice.
APMs are vital in the shift to value-based care. According to a recent report by Health Care Payment Learning and Action Network, slightly more than a third of all healthcare payments in 2017 involved APMs, up 6% from the prior year and 13 percentage points higher than 2015's 23%.
Yet 41% of healthcare spend is still devoted to fee-for-service only care, the report notes. A quarter is wrapped up in fee-for-service with some value-based involvement, while the rest goes to APMs built on FFS foundations or straight population-based payment.
The RAND-AMA report points to persistent findings from the earlier study. Practices have implemented new health IT, data analytics infrastructure and behavioral health capabilities needed for success with APMs. They also continue to adjust APM incentives before passing them along to physicians. "Individual physician incentives based on costs of care were rare, even within practices with strong cost-containment incentives from payers," the report says.
Other continuing themes include increased pressure to have timely, high-quality data and frustration with operational errors in APMs — particularly when they prevent practices from collecting earned bonuses, which erode support for APM participation.
The updated study also revealed new findings. Chief among them is a growing aversion to APM downside financial risk. Some practices have dealt with the issue by shifting the risk back to payers or offloading it to third parties, such as manufacturers.
Respondents in all six markets believe APMs are changing more quickly, partly driven by MACRA's Quality Payment Program. The pace of change is especially challenging for small and independent practices that may rely on outside consultants for advice, the report says, noting consultancies sometimes can't keep up with the changes.
Particularly challenging is when APMs are suddenly discontinued, upending investments and commitments practices made with the belief the payment model would continue, according to the report.
Payments models are also becoming more complex, with more performance measures, confusion about performance thresholds and interactions between different payment models. Understanding the newer payment models requires significant investment, which can be a barrier to participation.
However, for practices that commit to understanding APMs, the return on investment is often well worth it. "Some of these practices found ways to receive more credit for their preexisting quality — without materially changing patient care — by enhancing their documentation and data abstraction practices, thoroughly coding risk adjustment diagnoses, actively managing patient attribution, or purposefully selecting their performance measures to maximize the likelihood of rewards," the report says.
Simpler APMs and a more stable, predictable and measured pace of change could increase physician practice buy-in with APMs, the researchers suggest. They also call for more support to help practices come up to speed with the capabilities and data necessary to succeed with APMs. And they caution against limiting practices' access to upside-only APMs, saying this could scare them off altogether.
CMS is still being tight-lipped about how much it will force physicians to assume downside risk. The agency has proposed an overhaul of the Medicare Shared Savings Program that would shorten the time accountable care organizations have to shift to a risk-bearing model.
This study suggests an aggressive approach to imposing financial risk would not go over well.