News | Payment Models

Newer payment models should be part of holistic transformation efforts, CMS deputy administrator says

News | Payment Models

Newer payment models should be part of holistic transformation efforts, CMS deputy administrator says

  • CMS wants to move toward using innovative payment models to improve healthcare processes and care experiences more broadly rather than implementing models in “silos,” says Jonathan Blum, principal deputy administrator.
  • Among other changes in approach, the agency will look to reduce the number of alternative payment models and do a better job of sharing data from payment pilots.
  • The 2022 payment rule for care of end-stage renal disease illustrates the effort to directly use new payment models in service of a larger goal — in this case, to improve healthcare equity.

Healthcare industry stakeholders can expect a new approach to how federal payment models are formulated, as a recently released rule for Medicare coverage of kidney care illustrates.

The proposed 2022 rule for providers that treat patients with chronic kidney disease and end-stage renal disease (ESRD) seeks to directly address gaps in health equity, marking the first such effort in the 11-year history of the Center for Medicare & Medicaid Innovation (CMMI), according to a news release.

That underlying goal aligns with a broader philosophy articulated this week by Jonathan Blum, principal deputy administrator and COO with CMS. He said a more strategic rationale for new payment models is required.

Payment innovation “really has to inform the core programs that CMS runs,” Blum said during a July 7 webinar hosted by the National Academy of Medicine. “I think for too long, there have been silos.”

The goals and standards of programs such as the Medicare Shared Savings Program and Medicare Advantage should apply to Medicare fee-for-service, state Medicaid programs and (to the extent possible) commercial health plans, he said. And payment model designs shouldn’t be seen as ends in themselves but rather as means to achieve larger objectives.

Looking to transform more than just payment

Innovation efforts at the federal level should extend beyond payment models to the nuts and bolts of healthcare transactions, Blum said. The guiding purpose always should be to simplify and enhance the care experience for beneficiaries.

For example, ongoing work seeks to test approaches to prior authorization in Medicare. Such models “produce huge savings,” Blum said.

“It’s not just the payment model that matters to us,” he added. “It’s how we use the operations, how we change payments, how we build the transactions, how we create data sets that get shared. Those things really happen more behind the scenes.”

Blum echoed recent recommendations to Congress from the Medicare Payment Advisory Commission, which called for streamlining CMMI’s portfolio of alternative payment models (APMs) and ensuring the various models complement one another more effectively.

“The team really is working hard to decide what models work, which models should get stopped, which models may not have achieved [their] full goal but have some really critical, key learnings that can get fed back to our more national programs,” he said.

Operationally, he said, CMS will strive to do a better job of sharing data in the hope that lessons from APMs can be incorporated in private-sector healthcare policy.

Another new area of emphasis will be on bringing innovation and flexibilities to Medicaid programs, which sometimes have taken a backseat to Medicare in policy initiatives.

Finally, Blum said, “We can do a far better job to really build models of care that close healthcare disparities” in access and quality. “I think you'll see a much more conscious program design to really address those.”

New model for kidney care promotes larger goals

The proposed 2022 payment model for ESRD is part of CMS’s push to bridge socioeconomic gaps as Blum described. The rule includes changes to the ESRD Treatment Choices (ETC) model, a mandatory APM that began this year for selected facilities and managing clinicians. Payment adjustments are made on certain claims to encourage home dialysis and transplantation when appropriate for attributed beneficiaries.

The changes to the ETC model “would aim to encourage dialysis providers to decrease disparities in rates of home dialysis and kidney transplants among ESRD patients with lower socioeconomic status,” according to a news release.

One change would boost the scores of participants that demonstrate significant improvement in metrics for beneficiaries who are dually eligible for Medicare and Medicaid or receive the low-income subsidy in Medicare Part D.

Another update would stratify achievement benchmarks to ensure equal footing for participants that see a high volume of lower-income patients.

“Taken together, these two proposed changes acknowledge that socioeconomic disparities in access to alternative renal replacement modalities exist and may impact the ability of ETC participants to perform well in the ETC model, while providing an incentive for all ETC participants to reduce such disparities among their Medicare patients,” CMS stated.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (

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