News | Value-Based Payment

Healthcare industry leaders share ideas with CMMI for improving value-based payment models, with benchmarking a top concern

News | Value-Based Payment

Healthcare industry leaders share ideas with CMMI for improving value-based payment models, with benchmarking a top concern

  • During a recent call with healthcare stakeholders, leaders with the Center for Medicare & Medicaid Innovation heard various ideas for improving value-based payment models.
  • Upfront payments would allow a wider array of providers to participate in models.
  • Benchmarking needs to be overhauled if CMMI is to meet its goal of using VBP models to advance health equity.

CMS and the Center for Medicare & Medicaid Innovation (CMMI) should do a better job of ensuring providers can participate effectively in value-based payment (VBP) models, industry stakeholders told CMMI leaders during a recent call.

CMMI conducted the November call to get a better sense of how it can accommodate stakeholders as it seeks to implement a revamped vision for VBP models. The vision was detailed in a blueprint published in October, and implementation is expected to begin with new and updated models in 2022.

Among the goals of the new strategy is to establish a system that fosters the delivery of whole-person, integrated care. CMS projects that every Medicare beneficiary and most Medicaid beneficiaries will be in accountable care relationships by 2030.

“This means a focus on models that can facilitate accountable care relationships between patients and providers, such as advanced primary care,” said Ellen Lukens, director of CMMI’s Policy and Programs Group.

Stakeholders on the call offered various recommendations for improving VBP models. Among them:

Make participation less cost-prohibitive

“As they are currently designed, the resources required to participate in models are too great for many hospitals to bear while simultaneously executing their core mission of providing care to all who need it,” said Joanna Hiatt Kim, vice president of payment policy with the American Hospital Association.

Roadblocks to participating could be overcome by offering higher upfront payment amounts to certain providers, better incorporating glide paths to higher levels of risk and ensuring risk adjustment methodologies “take into account the many factors that contribute to healthcare outside the control of providers,” Kim said.

CMMI’s Lukens responded that the agency will look at developing model variations that would allow providers to take on lower risk initially and receive upfront payments.

Kate Freeman, manager of payments and care transformation with the American Academy of Family Physicians, said primary care practices would benefit from VBP payments that are risk-adjusted “to accurately reflect the patient’s clinical diagnoses … to ensure practices aren’t penalized for caring for patients with increased needs.”

Help providers with logistics

Kim said vendors should be encouraged to make IT platforms “automatically and out-of-the-box ready for APMs [alternative payment models] so that participants do not have to expend additional resources building that capability in-house.”

CMMI also should offer technical assistance to help prepare providers to participate in APMs, said Jeff Micklos, executive director of the Health Care Transformation Task Force, a nonprofit consortium of patients, providers, payers and purchasers. The ACO Investment Model, a three-year initiative that ended in 2018, could serve as a template, he said.

Data from CMMI on a provider’s patient population needs to be more timely and actionable, Kim also said, and providers should have better access to analytic tools that help them apply the data.

Said Lukens, “We agree that data needs to be actionable and as real-time as possible.”

Administrative burden is another concern, Kim said, and could be mitigated by automating some reporting requirements and offering relief for model participants from processes such as prior authorization and from regulations that “hamper providers’ ability to place beneficiaries in the clinical settings that they see fit.”

Administrative and regulatory requirements also muddle the process of choosing whether to participate in models in the first place. Lukens admitted that participation agreements “seem extremely complex, and we have heard from providers that in a short period of time, they can’t make that kind of decision.”

Improve benchmarking

Micklos was among various stakeholders on the call who said benchmarking methodologies should be overhauled. Approaches “that are based on historical spending with periodic rebasing create a disincentive for APM participants to fully maximize potential savings, and ultimately can drive providers to drop models,” he said.

Instead, “CMMI should focus efforts on developing benchmarking methodologies that support appropriate spending levels on care, limit rebasing and do not penalize model participants for the savings they achieve for their assigned populations.”

New benchmarking approaches also would help CMMI achieve its recently stated goal of using VBP models to boost health equity, Micklos said.

“Current benchmarking approaches generally fail to adequately account for equity in that they assume that historical spending and utilization should or can be lowered while maintaining or improving quality,” he said. “This is generally not a realistic expectation for underserved individuals and communities where providing appropriate care would likely require spending and utilization above the historical average.

“CMMI should develop benchmarking and risk adjustment methodologies that establish reasonable expectations for the cost of providing efficient and high-quality care and that can adjust for historical underinvestment in communities and among specific populations.”

Aisha Pittman, vice president of policy with Premier, said the current benchmarking approach “really prevents certain types of providers and patient populations from being included in the models. Providers who are paid at cost, like critical access hospitals, cannot achieve savings on top of their historical spend.”

The current format also may discourage providers from serving patients with complex medical needs in population health models. As an example, Pittman cited Part B drug spending for oncology patients, saying it’s a “significant deterrent to including oncologists and the patients that they serve in total-cost-of-care arrangements.”

Said Lukens, “We are committed to establishing benchmarks that are fair and accurate for our models.”

About the Author

Nick Hut

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

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