MedPAC: CMMI Should Consider a ‘Smaller, More Harmonized’ Portfolio of Alternative Payment Models

To reduce redundancies and confusion in the Medicare system, health care policymakers should consider implementing “a smaller, more harmonized” portfolio of alternative payment models (APMs).

That’s according to the Medicare Payment Advisory Commission (MedPAC), which released its regular June report to Congress on Tuesday.

“In many cases, providers participate in multiple [alternative payment models] simultaneously, and Medicare beneficiaries are attributed to multiple models at the same time,” the report notes. “This overlapping participation can have unintended consequences.”


For the most part, APMs are operated by the Center for Medicare and Medicaid Innovation (CMMI), the entity established in 2010 by the Affordable Care Act (ACA) to study and launch new care delivery mechanisms. The biggest exception to that is the Medicare Shared Savings Program, which was created as a permanent program by the ACA.

There have been several successful — and unsuccessful — alternative payment models over the years, from the Comprehensive Care for Joint Replacement Model and the Independence at Home Demonstration, to the Next Generation ACO Model and others.

The general goal of APMs is to lower costs and improve quality, but there are plenty of other reasons to explore new payment models as well, according to MedPAC.


“First and foremost, APMs allow CMS to experiment with changing how Medicare pays providers — to create stronger incentives to control overall costs than exist in traditional [fee-for-service] payment systems, while maintaining or improving quality,” Tuesday’s report explains. “At their core, well-designed APMs can give providers who are interested and able to provide care more efficiently the opportunity to do so with some financial reward.”

In its first decade, CMMI has tested out at least 54 models. Part of the U.S. Centers for Medicare & Medicaid Services (CMS), the innovation hub’s usual practice is to operate a model for about five years, then either abandon it or relaunch a revised version under a new name.

In 2021, CMS expects to operate at least 12 APMs offering 25 distinct tracks for providers to choose from that involve different payment options and risk arrangements.

“A few other APMs were previously announced but are now under review by the new administration or have been otherwise delayed,” the report continues.

Home health providers have participated in many of the past and present APMs, with the Home Health Value-Based Purchasing (HHVBP) Model being one of the most direct. First implemented in 2016, HHVBP is currently active in just nine states, though that may soon change, as CMMI revealed expansion plans in January.

Home health providers were largely supportive of that news.

“The upside has been good for us. It’s generally quite positive,” Amedisys Chairman and CEO Paul Kusserow previously told Home Health Care News. “But we feel the curve is too clustered toward the center. It is very hard to get the full rewards or to get the full penalties.”

Some home-based care organizations like Landmark Health, Lifesprk and Humana Inc. (NYSE: HUM) are participating in the newer direct-contracting models from CMMI. Those are among the projects now under review, however.

In addition to creating redundancies and confusion, too many APMs happening at once can also lead to diminished returns.

“For instance, savings that are generated for a beneficiary served by different sets of providers participating in different APMs can be allocated to providers in only one of these models, thus diluting financial incentives in the other models,” MedPAC wrote in its report.

CMS and CMMI aren’t always on the same page as MedPAC, but increased harmony among APMs is an issue with widespread support.

In fact, CMMI chief Liz Fowler has been thinking about the country’s value-based care “crossroads” since taking over in her role earlier this year.

“We want the CMS Innovation Center model tests to work, to lower costs, improve quality of patient care and better align payment systems to promote patient-centered practices,” Fowler said during a National Association of ACOs (NAACOS) virtual event in April. “But we also need to be honest about the nature of innovation, that not everything is going to be a home run. Some things will work, others won’t.”

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