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As CMS Pauses, Providers Must Move Forward with Risk-Based Payments

Under the Biden administration, the Centers for Medicare & Medicaid Services has paused its 2021-22 contracting cycle for Medicare Direct Contracting and is assessing its other alternative payment programs. While many are busy trying to read the tea leaves as to which programs will survive and which will be cut, two patterns are clear:

  1. Programs that rely on underlying fee-for-service payments, including Next Generation ACOs, Medicare Shared Savings ACOs and Medicare bundled payments, have produced only modest success. Not so surprisingly, the administration announced on May 21 that 2021 is the last year for NextGen ACOs.
  2. Other models that rely on some capitation, or per member per month payments, such as Medicare Advantage, have shined.

Further, value-based payments (VBP) are the right chassis to address health equity and social determinants of health (SDOH), a Biden Administration focus. Thus, while the VBP movement remains an evolution, not a revolution, payers and providers do not have the luxury of taking a break on building out their platform and experience in risk-based contracting.

What to do now

Health care organizations can continue moving forward by developing competencies and launching limited risk arrangements.


1. Identify strategic sweet spots

Organizational strategy and execution regrettably must continue to straddle the ‘one foot in each canoe” conundrum. To move forward with VBP, pick one or two populations, such as high-needs patients. Most providers are inadequately compensated with fee-for-service (FFS) payments for caring for high-need patient populations. By agreeing to make this ‘at-risk’ revenue, providers can focus on improving care management to deliver higher-quality care while reducing total cost of care. Lessons learned from managing high-need patients can be leveraged and inform additional population health management and risk-based contracts.

Another option is to target other Medicare FFS alternatives, although deadlines for applying are fast approaching. To learn more, please see Medicare Direct Contracting Pivot: Act Quickly to Capitalize on Alternatives, Medicare Shared Savings Program fact sheet, and CMS Accountable Care Programs comparison table.


2. Invest in capturing data that will drive key metrics

Much of the trepidation around moving to risk-based models is based on an inability to accurately assess the financial and other impacts on an organization. Many continue to ‘guesstimate’ because crucial information is not being captured. Providers need to invest in the information systems and tools to collect, collate and analyze data. Such data is a prerequisite for identifying and addressing the needs of ‘at-risk’ patient sub-populations, whether health risk profiles, care gaps, or SDOH needs.

While systems do a good job of capturing health issues and treatment, coding systems are essentially designed for healthcare providers to be paid. The ICD-10 codes established to identify SDOH are in the early stages of implementation and do not track consistently across all settings. An even more significant challenge is documenting treatment and interventions targeted to influence SDOH.

Complicating matters, community-based organizations (CBOs) that provide food, housing, and social services have operated outside of the medical system. There are no widely used code sets to capture the interventions and the information is not captured consistently for analysis.

Systems and workflows must align to capture data that will support future decision-making. Healthcare organizations need to begin to collect this information to measure their impact on the total cost of care. One place to begin is creating coding documenting and interventions with the one or two patient populations under risk contracts, such as high-need care-managed patients.


3. Assess your network, including ability to integrate behavioral health and non-medical community-based care (CBC) services into primary care

Based on your goals for the population(s) you want to take risk for and the geographies you want to cover, assess and develop a plan to close any gaps. It should include not only primary care for empanelment but also specialty care, hospitals, surgery centers, skilled nursing facilities, home care and other provider types depending on what is required for the target population(s) and geography(s).

In addition to ensuring overall network adequacy and optimization for care, keep in mind that health providers, in the way most are structured today, cannot meaningfully address the myriad social and economic inequities that affect disadvantaged communities. Organizations that have not integrated CBC into primary care and developed care management processes that follow patients in the community need to develop best-practice care management programs for high-risk populations, integrate CBC services into primary care wherever possible and where data points to SDOH gaps for attributed populations and screen community-based organizations as potential network referral partners.


4. Reorient organizational culture for VBP

Providers drive the value-based culture train. And sadly, most continue to be rooted in a culture of fee-for-service. Why does this matter? To paraphrase the adage, culture eats strategy for lunch. The only way to succeed with a VBP strategy is to create a culture that leverages skill sets, understands the cost of care decisions, and supports VBP success in care management, referral patterns, and patient-perceived quality of care. Failure to get providers at all levels on board will neuter efforts to shift to a risk-based model that rewards the right care, in the right place, at the right time.


Please contact us for help in designing or executing a VBP roadmap at info@copehealthsolutions.com.

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