On Demand Webinar | Basic | Coronavirus
<div>As COVID-19 pandemic materialized and spread, it has changed so much about healthcare delivery, how we prepare, and how we go about our daily lives.&nbsp; We are reminded how fragile our health and the healthcare system can be. As an i...
Save
On Demand Webinar | Intermediate | Coronavirus
The COVID-19 pandemic is ravaging healthcare facilities, which is partly due to a lack of personal protective equipment (PPE) and other critical supplies.&nbsp; Vulnerabilities in the supply chain have been exposed. As such, hospitals shoul...
Save
On Demand Webinar | Basic | Coronavirus
In the wake of COVID-19, many healthcare providers that traditionally relied on physical office space had to quickly adapt their operations to meet regulatory guidelines and ensure the safety of their employees by shifting to remote work. O...
Save
On Demand Webinar | Basic | Coronavirus
Relying on aggressive financial policies and collection tactics won't help your organization adapt to the "patient as payer" model, especially after the pandemic.&nbsp; Instead, you need a strategy that helps patients easily navigate the fi...
Save
On Demand Webinar | Basic | Coronavirus
<div>The COVID-19 pandemic is causing major economic disruptions and has left many health systems struggling to find ways to drive cash supply and forecast budgets. The ability to pivot and prepare a financial operating plan that provides a...
Save
News | Coronavirus

Where are Medicare value-based payment models headed after COVID-19?

News | Coronavirus

Where are Medicare value-based payment models headed after COVID-19?

The COVID-19 pandemic has opened up new opportunities and created new challenges for providers participating in various Medicare value-based payment (VBP) models, industry advisers say.

CMS on June 3 unveiled a range of generally worded changes to various models, aiming to limit financial risk for provider participants during the pandemic and related shutdowns. But hospitals and other providers already are looking beyond the pandemic at how their performance in the models may be drastically affected by COVID-19-related Medicare policy changes, constraints on provider capabilities and evolving patient attitudes.

The suspension of downside risk for many of the models was necessary, in part, because many patients have been either unable or unwilling to seek needed preventive care, and so their conditions worsened, sometimes catastrophically. Without changes, many provider participants would have been facing steep penalties as a result.

Patient reluctance to obtain needed care due to COVID-19 fears is likely to continue after the pandemic and the temporary grace period offered by CMS, said Andrei Gonzales, MD, associate vice president for Change Healthcare.

“It’s going down, but the public perception is still, ‘Avoid the hospital,’” said John Kalamaras, business intelligence analytics manager at DataGen.

One workaround for providers is to continue to expand their use of telehealth. That tactic will depend on CMS’s willingness to maintain expanded permissions and increased payment for telehealth services, Gonzalez said. Those changes have been instituted during the public health emergency.

Providers may rethink VBP participation

Changes in the post-COVID-19 healthcare landscape will include providers that have suffered massive financial losses, mainly from the suspension of elective procedures. Data from the American Hospital Association (AHA) estimated that hospitals will lose a cumulative $202.6 billion in revenue between March 1 and June 30 ($50.7 billion per month).

Financially weakened organizations will weigh whether they have the strength to carry the financial risk of downside models, in which participation comes with huge operating costs even for organizations that succeed in them.

Continued participation in VBP models will depend on the reopening strategies of individual organizations and whether a second COVID-19 wave hits in the fall, said Aisha Pittman, vice president of policy for Premier, which advises more than 200 ACOs.

“The jury is still out; people are waiting and evaluating,” Pittman said.

The impact of the pandemic on a participant also likely will affect continued participation in VBP models such as bundled payments, Kalamaras said.

“For any hospital, it’s [about] reevaluating the risk of these bundled payments for the future,” Kalamaras said. “Overall, participants that are in these bundles will stay in the bundles in some manner because they are very persistent, and they are in these bundles to make change.”

Health systems in more advanced VBP models, such as global capitation or full capitation, found their revenues remained steady during the pandemic, Pittman said. In contrast, fee-for-service care suffered steep losses as patient volumes dried up.

“If anything, there might be a little more appeal to value-based models that compensate providers for caring for a patient, rather than just for caring for a patient when they show up at your office,” Gonzalez said.

Advanced-model participants also had valuable experience in capitalizing on the temporary flexibilities allowed by CMS, such as expanded use of telehealth and close coordination with skilled nursing facilities, Pittman said.

However, the increased staffing and revenue challenges unleashed by the pandemic may make it harder for providers to enter VBP models if they lack experience, Gonzales said.

The pandemic has not shaken the commitment of commercial health plans, which mainly operate upside-only VBP models, to continue with such approaches, Gonzales said.

ACOs seek changes to target-setting

Gonzalez said many ACOs will have the same concerns as before the pandemic about their ability to take on downside risk. Much of that concern has stemmed from the way CMS sets performance or budget targets.

“There is concern in the market that if you are a top-performing ACO and your target is set against your own performance, it is very difficult to move the dial even further,” Gonzalez said.

Instead, ACOs want CMS to use regional benchmarks to set targets. CMS has started to incorporate such changes, Gonzalez said.

Although CMS pushed back the end of the Next Generation ACO model by a year to December 2021, Gonzalez still expects participants to migrate to various options in the new Primary Care First (PCF) model, with some options now starting in April 2021. The PCF models include fewer quality measures and better fit the capabilities of larger-scale organizations, he said.

 

About the Author

Rich Daly, HFMA senior writer and editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Advertisements

Related Articles | Coronavirus

News | Managed Care

Healthcare News of Note: Payers push back on CMS prior-authorization rule

Healthcare News of Note for healthcare finance professionals is a roundup of articles from the past week, including why payers are pushing back on the prior-authorization rule and information on HHS funding to support the nation's response to the COVID-19 pandemic.

News | Price Transparency

Appeals court rejects hospitals’ objections to new price transparency policy

An appeals court panel rejected hospitals’ effort to halt the Jan. 1 requirement for hospitals to begin posting the rates they negotiate with health plans.

News | Price Transparency

Hospitals seek reversals of Trump policies, among various requests of Biden

Hospitals are urging a range of policy changes, including halting the new price transparency rules, by the incoming Biden administration.

News | Price Transparency

CMS warns a common hospital price transparency approach is noncompliant with new requirements

Many hospitals are using a rate-averaging approach to meet transparency requirements, which CMS recently deemed noncompliant.