Healthcare payers and providers are increasingly entering into value-based care coordination arrangements that are based on alternative payment models that feature shared-risk savings.
Joe Swedish, chair, president, and CEO of Anthem Inc., said that 58 percent of the insurer’s reimbursements are currently linked to APMs. Of these, 75 percent are of the shared-risk and savings variety and are linked to population-based management models. Swedish presented his findings at the AHIP Institute & Expo held in Austin, Texas, this past June.
APMs are arrangements made between payers and providers that shift away from fee-for-service and embrace a value-based structure that looks at the entirety of an episode. The main concept is to spare the patient from being overwhelmed by billing complexities and make the overall medical experience more streamlined and less expensive. The more doctors and hospitals take on risk, the more they can potentially earn through quality care savings.
The primary vehicles used for these models are comprehensive primary care, bundled payments, and accountable care organizations. They can encompass Medicare and Medicaid, as well as commercial plan coverage.
Swedish said Anthem is emboldened by the results the APMs have generated to date and by the interest shown in the format by providers; more than 64,000 doctors participate in Anthem’s APMs. The insurer is involved in 159 ACOs, which to date have generated overall per-member, per-month savings, including 6 percent fewer admissions and 10 percent lower lab utilization rates.
Anthem is far from the only insurer involved in APMs, although it seems among the furthest along in terms of generating results. Competitors and national insurers Aetna, Cigna, and UnitedHealthcare are also involved in a series of APMs, including episodes involving cancer, chronic coronary artery disease, colonoscopy, hip and knee replacements/revisions, total joint replacement, and spinal surgery.
The Centers for Medicare & Medicaid Services, meanwhile, has reported that 30 percent of payments were tied to APMs in 2016, up from zero percent in 2011. There are currently 561 Medicare Shared Savings Program ACOs, 120 of which are risk-based. CMS expects that more than 200 MSSP ACOs will be risk-based in 2018.
Looking ahead, CMS will begin testing a new payment design in 2018 that incorporates more-limited downside risk than is currently present in MSSP tracks 2 or 3, with the hope that the change would encourage smaller practices to participate.
The future of value-based arrangements seems secure with new, advanced APMs being touted, such as the Next Generation ACOs that are building off the success of the MSSPs. And new Secretary of Health and Human Services Tom Price is an advocate of value-based programs, showing that leadership in President Trump’s administration is supportive of moving the industry further from fee-for-service.
Chris Silva is a senior analyst at DRG and specializes in information technology, telehealth, and big data, among other topics. Follow him on Twitter at @ChrisSilvaDRG
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