Though value-based payment programs have doubled since 2015, a Healthcare Financial Management Association (HFMA) survey of 117 senior financial executives found that commercial payers have been slower in launching value-based programs than expected.
Nearly three-quarters of executives surveyed said their organizations achieved positive financial results, including return on investment, from value-based payment programs.
The report, which was sponsored by payer Humana, said providers plan to focus on external and internal interoperability in the coming years. Providers will focus in that area due to “current shortcomings, anticipated future need and the increasing demand for access to various sources of data.”
The new report found that both value-based payment adoption and return on investment have improved since 2015.
The survey reported that health plans’ use of value-based mechanisms doubled since 2015 from 12% to 24%. Though that’s encouraging, the result is actually well below what providers expected in 2015. At that time, respondents predicted that value-based mechanisms would reach 50% by 2018, which shows that progress has been slower than expected.
Concerning government plans, the survey found that 26% of negotiated government plans, such as Medicare Advantage and managed Medicaid, were value-based. That’s better than 21% of traditional Medicare and 14% of non-managed Medicaid plans. Plus, it’s better than commercial plans (24%).
Of value-based programs with some form of risk-based compensation from commercial payers, more than 80% of respondents said the program was either bonus-only or a combination of bonus and value-based payments. more than 50% of respondents said the programs were bonus-only, which meant no risk to providers. Only 17% said they were strictly value-based, which meant providers took on risk.
Though a higher percentage of respondents (74%) said their organizations received positive financial results in value-based programs, there is still uncertainty about value payments. Nearly three-quarters of respondents said regulatory uncertainty, such as MACRA rule changes, “has a negative effect on their ability to forecast the financial impact on value-based payment.”
Also, there are barriers to value-based payments, such as lack of resources, inconsistencies among payers and lack of physician alignment and support.
The HFMA study reported similar findings to another Humana-backed study in 2017 by the American Academy of Family Physicians. The AAFP found that value-based payments “based on achieving quality and/or outcome measures” have more than doubled since the last study two years ago. More than half of family physicians in the AAFP study said they were participating in value-based payment models and half believed value-based payments will bring better collaboration between primary care physicians and specialists.
However, much like the HFMA report, the AAFP survey found barriers remain, including lack of staff time, transparency between payers and providers, standardization of performance measures and uniform performance reports from payers.
The move into value-based payments is just beginning. More value-based contracting is expected in the coming years with both private payers and the federal government interested in paying for value rather than volume.
The CMS continues to show interest in value-based payments, though not in mandatory programs, such as the one the CMS canceled late last year for cardiac and hip fracture episodes. In January, the CMS announced a new voluntary bundled payment model that will cover 32 clinical episodes, including 29 inpatient and three outpatient. Providers can consider the Bundled Payments for Care Improvement Advanced program an advanced alternative payment model for MACRA reporting.