MedPAC likely to recommend CMS simplify alternative payment models

A congressional advisory panel will likely recommend that CMS improve coordination among its alternative payment models and reduce the total number of models it operates, including accountable care organizations and bundled payments.

During a Medicare Payment Advisory Commission meeting on Thursday, experts said the changes would encourage providers to deliver care more efficiently and might lower Medicare spending, depending on how Congress and CMS carry out the recommendation. The commission’s staff found that more effective payment models could boost care coordination, improve health outcomes and potentially reduce premiums and out-of-pocket costs for Medicare beneficiaries.

In addition, providers would probably benefit from a simpler, more coordinated group of models, which could ease reporting requirements, reduce and consolidate quality measures, or create clearer financial incentives for providers.

But the specific impacts of the draft recommendation remain hazy, even though there’s broad agreement that CMS needs to simplify its approach.

“We all assume that it’s our favorite model that isn’t going to get cut,” MedPAC commissioner Brian DeBusk said.

Several commissioners worried MedPAC’s draft recommendation wouldn’t go far enough, arguing that there should be a greater focus on prioritizing the most effective models. But all of them said the recommendation would be a step in the right direction and that they would support it. Commissioners will vote on the recommendation at MedPAC’s April meeting.

MedPAC will continue to study alternative payment models in the coming years, including whether it should recommend more mandatory participation in risk-bearing models.

The commission’s research found that alternative payment models have had a limited impact on healthcare spending and quality. While some approaches like accountable care organizations have had more success than others, even the most successful models have produced relatively small savings.

Some experts think alternative payment models have had positive effects, but there’s limited evidence to support those claims. For example, providers might deliver more efficient care to all their patients, even if they aren’t in an alternative payment model. Likewise, experimental payments could lower healthcare spending in Medicare Advantage because those payments are tied to fee-for-service Medicare spending.

MedPAC’s staff identified several issues that could prevent alternative payment models from living up to their promise. But providers’ continued ability to practice fee-for-service medicine is likely the biggest hurdle for CMS’ Center for Medicare and Medicaid Innovation to overcome.

According to MedPAC, CMMI has put 54 model models into practice during the past decade. But only four of them have met the criteria for expansion. CMS will likely offer 13 alternative payment models in 2021, including more than 30 tracks for providers.

Research shows that providers might have weaker incentives to deliver high-value care if they take part in several models. That’s because each model might have different financial incentives and operating requirements for providers. In addition, performance payments from one model could increase total spending in another model, making it tougher to meet spending targets.

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