Medicare Must Remain Cautious with Alternative Payment Models
CMS should proceed with caution when It comes to producing new regulations as it will take more time for healthcare providers to better navigate the new value-based reimbursement system such as alternative payment models.
By - The federal government has brought a tremendous amount of focus on reforming provider-payer reimbursement in order to reduce the rising healthcare expenditure around the country. New regulations have been implemented to improve medical care as well as stabilize these rising costs. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is one such regulation that was passed last year to reform healthcare reimbursement and adopt alternative payment models.
According to a company press release, AMGA Chair Elect of the Board of Directors Jeffrey Bailet, M.D., co-president of Aurora Health Care Medical Group, spoke in front of the House Energy and Commerce Health Subcommittee about MACRA as well as the ongoing transition at the Centers for Medicare & Medicaid Services (CMS) to transition to value-based care reimbursement within the Medicare program.
Dr. Bailet stated that doctors are at different stages of preparation for taking on financial risk contracts with payers.Additionally, the expert explained that CMS should proceed with caution when It comes to producing new regulations as it will take more time for healthcare providers to better navigate the new value-based reimbursement system such as alternative payment models or bundled payments.
Dr. Bailet mentioned that it is important for CMS to engage with the healthcare community at large and that the federal agency can take certain steps to better engage with hospitals and clinics. This could lead more providers to innovate and prepare for participating in alternative payment models.
First, CMS could assist providers by ensuring they have full access to reviewing claims data. Additionally, it is beneficial for formats to be standardized when exchanging information. The risk-adjustment and physician attribution methodologies will also need to be strengthened.
Within the statement made by Bailet, it is discussed that the Medicare program is slowly shifting away from the traditional fee-for-service payment model toward one that is value-based and patient-centered. Doctors and hospitals are being held more accountable for improving patient health outcomes.
This move to value-based care reimbursement is meant to overcome the many financial challenges associated with a payment system based on volume instead of value. However, Bailet cautioned that regulators will need to move forward more carefully when transitioning the healthcare industry toward value-based care reimbursement and adopting alternative payment models, as this is a major transformation for the medical space. Greater flexibility in particular is advised.
“Providing an incremental approach that includes flexibility and rational exposure to financial risk will be vital in ensuring a successful transition to value-based payment. Congressional oversight of this process would be needed and welcomed,” the letter stated. “Physicians whether they are in small group practices, larger multispecialty medical groups or high performing integrated care delivery systems, must make significant investments to succeed in a risk-based environment.”
“This includes implementing information technology and electronic health record systems, migrating to team-based care delivery, redesigning care processes as well as the physical care environment, and, perhaps most importantly, developing highly engaged physicians and caregivers to embrace and thrive in a culture that emphasizes continuous quality improvement.”
Some providers and hospitals need additional time to review their revenue cycle before moving forward with value-based care initiatives such as the Medicare Shared Savings Program. Payers will need to also proceed with caution when signing onto risk-based contracts with providers, as these contracts may need additional flexibility to ensure hospital revenue maintains optimal levels.
“With the enactment of MACRA, physicians and the larger healthcare community recognize and are preparing for a Medicare payment system that is transitioning away from an unsustainable fee-for-service model based on the volume and intensity of services provided to one that is value based, patient centered and accountable,” Bailet’s statement mentioned.
“Aurora and likeminded medical groups, physician practices and health systems appreciate that this transformation of care delivery is pressing both to enhance the quality of patient care and to address the financial challenges inherent in our current volume based system. It is equally important, however, that regulators appreciate the need to proceed cautiously during this transition. Medicare largely has been based on fee-for service payments since its inception and many physicians are in various stages of readiness for a value-based payment system.”
In order to succeed in moving forward with alternative payment models and value-based care initiatives, CMS and private, commercial payers will need to engage more strongly with the healthcare community and proceed more slowly before requiring providers to take on additional risk.
