Experts: Payers Will Forge Ahead with New Pay Models

— But the feds must commit value-based care, they urge

MedpageToday

WASHINGTON -- While alternative payment models (APMs) may have a mixed track record, the government's commitment to value-based care must remain firm, according to healthcare industry experts.

"Regardless of what happens on the federal side," the push for payment reform will continue on the commercial side, noted Emily Roesing, director of business development at the Catalyst for Payment Reform, a nonprofit which consults on healthcare issues for employers, during an Alliance for Health Policy press briefing Monday, sponsored by the Jayne Koskinas Ted Giovanis Foundation for Health and Policy.

Another panelist agreed, pointing out that commercial payers are firm in their resolve to advance new models.

"Market momentum is all about perception, and perception is the summation of individual impressions," said Mai Pham, MD, MPH, vice-president of Provider Alignment Solutions for Anthem. Pham was previously with the Centers for Medicare and Medicaid Innovation (CMMI) under the Obama administration.

Individual actions by the Centers for Medicare and Medicaid Services (CMS), such as scrapping mandatory models, serve as a "micro signal." she explained. For instance, there's the late roll-out for the next version of the Bundled Payments for Care Improvement initiative. Also, the uncertainty of the CMMI timeline for responding to the recommendations from the physician-focused Payment Technical Advisory Committee (P-TAC) regarding which APMs the committee believes the center should pilot. Finally, there is the mounting exemptions for providers from the Merit-based Incentive Payment System (MIPS).

Pham noted that "these little signals ... they do add up to a market perception."

In March 2016 the U.S. Department of Health and Human Service's (HHS) Health Care Payment Learning and Action Network (LAN) reported that 30% of Medicare payments now flow through APMs. Anthem now has 49% of its healthcare dollars flowing through APMs, Pham said.

"While the rest of us [employers, payers, providers] will continue to march on in this direction, it would be a lot easier if the federal government were to continue to exert that pressure; that hand behind people's backs to continue to convince people that you have to continue in this direction," she stated.

Pham and Roesing also stressed the importance of fixing the fee schedule.

Fee-for-service payments is "the elephant [in the room], which I think will crush us all if we ignore it," Pham said.

All APMS are built on a fee-for-service framework, she said. In other words, the spending targets set within these new APMs models are based on the historical amount spent for a patient, "which is the sum of all the fee-for-service prices that you have paid for that patient. So we have locked into all of our current alternative payment models, a poisonous, price-distorted fee-for-service system of relative prices," Pham stated.

This means that high-budget services, such as procedures, will continue to be overvalued, while low-budget services, such as talking through care decisions with patients, will remain undervalued, Pham argued.

In short, the underlying structural issues in the prices for these individual services, need to be re-evaluated, she emphasized.

For more on this topic see "Physician Fee Schedule: Use it Or Lose It."