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Stakeholders Offer Key Principles for Alternative Payment Models

Dozens of healthcare organizations sent a letter to the new administration showing support of alternative payment models.

Value-Based Care Reimbursement

Source: Thinkstock

- More than 100 medical organizations sent a letter to President Trump and Vice President Mike Pence on behalf of supporting the healthcare industry’s transition to alternative payment models. The letter outlined the complexities and hindrances caused by the fee-for-service payment system. Fee-for-service has brought difficulties for physicians looking to reduce costs, improve quality, and enhance population health outcomes.

However, in recent years, healthcare payers and providers have been moving toward advancing alternative payment models and implementing value-based care programs. The process toward changing payment structures in the healthcare field has come with bipartisan support over the last two decades including the most recent passage of the  Medicare Access and CHIP Reauthorization Act (MACRA), the letter states.

“I am confident that the migration toward value-based care will continue regardless of what happens in the next few months,” Michael O. Leavitt, Chairman and Co-founder of Leavitt Partners, said in a public statement. “There is a remarkable amount of bipartisan agreement when it comes to payment and delivery reforms, as evidenced by legislation like MACRA, and the Republican Congress has established a clear pattern of supporting the transition from fee-for-service to value payment.”

Additionally, value-based alternative payment models have led to significant benefits such as better quality and lower costs. The letter calls on for lawmakers to continue to support value-based care reimbursement instead of shifting away from new healthcare payment structures.

The undersigned healthcare organizations including Aetna, the McKesson Corporation, the American Medical Association, and the Healthcare Financial Management Association stated their commitment to advancing value-based care reimbursement and supporting Congress in creating the “next generation of healthcare policy.”

The letter urges the new administration to support patient-centered healthcare delivery aimed at reducing medical costs while improving patient safety and quality. The organizations positioned a number of principles upon which value-based care reimbursement could be truly successful.

First, patient engagement and educating patients is a vital principle for advancing value-based care. Engaging patients in developing quality metrics that are relevant to their interests should help payers reimburse providers in ways that lead to better health outcomes.

Another important principle to strengthen alternative payment models is ensuring timely access to accurate claims data between payers and providers. Understanding patients’ social factors and socioeconomic status will also help payers overcome challenges related to covering their members’ cost of care.

“As a purpose-driven organization, Aurora Health Care is committed to improving the health and well-being of the people and communities we serve in eastern Wisconsin,” said Nick W. Turkal, MD, President and CEO of Aurora Health Care. “As a participant in a Medicare ACO, we have achieved top performance in clinical quality, while sharing in associated cost savings with the federal government.”

“We have also shared the insights we have gained nationally through Premier’s population health collaborative. We strongly believe that alternative payment models can effectively align incentives to improve clinical quality and reduce costs, and have demonstrated this in our ACO performance.”

With more than 100 medical organizations showing support for alternative payment models through this letter, many stakeholders may need to consider the abilities of providers to meet some of the requirements of value-based reimbursement such as MACRA legislation.

The Advisory Board released a survey that shows 70 percent of polled physicians throughout 30 medical organizations are “concerned” about meeting the requirements of MACRA regulations. Many stated that the regulations are overly complex with only 20 percent feeling confident about reaching MACRA’s quality benchmarks. However, 50 percent of those polled did state that they predict to be prepared for reporting quality data for MACRA regulations over the 12 months of 2017.

Merritt Hawkins for The Physicians Foundation performed another survey in 2016 showing that only 20.6 percent of primary care doctors and 19.5 percent of specialists are “very or somewhat familiar” with the requirements of MACRA legislation. More than 17,000 physicians were polled and more than 55 percent stated that they were “very or somewhat unfamiliar” with MACRA requirements.

Physician practice owners showed more knowledge in MACRA legislation with 18.5 percent of self-employed doctors familiar with the new payment structures while 15.5 percent of employed physicians reporting understanding the reimbursement system.

With large numbers of healthcare organizations supporting the advancement of alternative payment models, federal government agencies as well as commercial health insurers will need to work with providers to ensure success in value-based care reimbursement.

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