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News Clips
JAMA: The Promise and Challenge of Value-Based Payment (5/20) – Fee-for-service (FFS) systems pay physicians and health care institutions based on the number of services provided, whereas value-based payment (VBP) links payment to quality and outcomes. Similarly, the flagship Medicare Shared Savings program yielded more than $8 billion of net Medicare savings since inception, and $1.8 billion (nearly three percent of spending) in 2022, with improved quality performance. These successes highlight both VBP’s feasibility and promise. Yet, debates persist about whether VBP is delivering on its promise. One significant factor is that VBP still constitutes only a small portion of physician payment. Only 20 percent of total health care payments carry downside risk and 20 percent have only upside risk. Furthermore, a recent Congressional Budget Office report estimated that payment models tested by the CMS Innovation Center delivered minimal savings, costing an additional $5.4 billion after including the Center’s operational expenses.
Milbank Memorial Fund: Defining the State Role in Primary Care Reform (5/20) – States play a key role in shaping the local environment for primary care, through both action and inaction. Whether investing in the state’s primary care infrastructure and workforce, mandating or incentivizing alternative payment approaches, or promoting administrative alignment across payers, states have multiple levers to influence the sustainability and quality of primary care. At the same time, it’s challenging for states to define their role and prioritize activities. To help states with this process, the Virginia Center for Health Innovation, in partnership with Milbank Memorial Fund, has developed a Primary Care State–Federal Alignment Tool outlining federal primary care initiatives and offering a template for systematically evaluating a state’s alignment with each policy. In conjunction with the tool, states should consider activities to prioritize resources and use their authority most effectively.
Health Affairs: Equity Through Episode-Based Payment: Features Of The Transforming Episode Accountability Model (5/22)
– Over the past several years, CMS has reevaluated its approach to value-based payment models. Recent emphasis has been to expand population-based models, such as accountable care organizations (ACOs) and primary care programs. However, it has been less clear how policy makers will advance episode-based payment models beyond ongoing programs. Episode-based bundled payment models have been successful in their own right, and greater engagement of specialists remains a major need—both for overall payment policy and to promote greater care delivery and incentive alignment with population-based models. That policy direction is now clearer. Last month, CMS announced the Transforming Episode Accountability Model (TEAM), a new program that will begin in January 2026 after the conclusion of the nationwide Bundled Payments for Care Improvement Advanced program.
Health Affairs: The Need For Holistic Policy Thinking In Medicare (5/23) – Policymakers should also look to equalize the treatment of MA and FFS Medicare, promote value-based care, and differentiate between good and bad actors. If policymakers are concerned that MA is coded differently than FFS, regulators should look to improve coding accuracy for both programs. Solutions could include using artificial intelligence to crawl charts as a means of equalizing payment. In conjunction, policymakers could budget for thorough chart audits of FFS and MA populations to better measure differential coding. While MA is imperfect, population-based payment provides the flexibility to meet the varying needs of America’s increasingly diverse population while creating a long-term framework for continuing the transition from volume to value.
Fierce Healthcare: Site-neutral payments draw blanket, bipartisan support at House Budget hearing (5/23) – Rampant consolidation within the health care industry is proving to be a rare point of unity among Republican and Democratic lawmakers in the House. A House Budget Committee hearing held Thursday was largely devoid of interparty finger pointing, and more than a few times saw lawmakers applauding health policy decisions of administrations hailing from the opposing party. The lawmakers similarly weren’t shy about directing their questions to witnesses representing think tanks typically on the opposite side of the ideological spectrum. Each brought testimonies and responses warning of unsustainable spending, dwindling independent providers and patient access concerns. Site-neutral payments are a “no-brainer” and “corrects a fundamental distortion” in the Medicare payment system that is driving practice acquisitions, Families USA’s Tripoli added while noting The Medicare Payment Advisory Commission’s longstanding support for the policy. The CBO’s White said that a lack of site-neutrality is “a heavy thumb on the scale” toward consolidation, and named it alongside stronger federal antitrust capacity as federal policies the office projects would slow provider consolidation “by up to a quarter.”
The Hill: How noncompete ban could shake up health care landscape (5/23) – The Federal Trade Commission’s (FTC) vote to ban noncompete agreements is set to have an outsized impact on the health care sector, empowering clinicians and raising anxiety among private practices who worry it will compound staffing problems. Lisa Stand, director of policy and regulatory advocacy at the American Nurses Association, said her group was pleased with the rule and surprised by “how strong it is.” “It absolutely will make job mobility easier,” Stand said. “We’re nurses, and we think that ultimately this is good for patients as well, as there is more sort of robust competition for clinical talent and an expanded access to more choices of provider and provider setting.” But some private practices worry not enough thought has been put into how a change like this will affect the care they provide to patients. “It truly unbalances the ability of those organizations, especially private practices which are already under siege and being decimated by hospital employment, for them to be able to maintain and be able to compete with hospitals that have no restriction on noncompetes,” said Feltz.
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