COVID-19 Makes Alternative Payment Models More Appealing

The COVID-19 pandemic has had many unintended consequences: Zoom calls, working from home, telehealth, Sarah Cooper’s rise to fame and fortune. In healthcare, one of the most significant may have been to show providers the advantages of alternative payment models instead of relying on fee-for-service payment, according to Kelly Eng Macmillan, a senior vice president at Archway Health, healthcare consulting firm in Boston that specializes on giving advice about value-based care

“Providers in capitated or semi-capitated arrangements that had predetermined amounts to care for their patients — they were actually faring much during the public health emergency and were financially better equipped to provide care for their patients and implement telehealth and weren’t forced to furlough their staff like many providers who were reliant on fee-for-service revenue,” said Macmillan in an video interview this week with Peter Wehrwein, senior editor of Managed Healthcare Executive,® and Briana Contreras, the associate editor.

Macmillan noted that CMS has launched a group of several alternative payment models recently (models that include some degree of capitation)“COVID-19, in many ways, makes some of these alternative payment models more attractive.”

Because of COVID-19, many providers made technology and other investments to support telehealth and other services.

“In a way,” Macmillan said, “participating in these alternative payment models could be a way for them to cash in on some of that investment, so to speak, that they were forced to put in place because of Covid.”

Macmillan also discussed Value in Health Care Act, a bill introduced in the House in late July that would make various changes to MACRA (the Medicare Access and CHIP Reauthorization Act) and CMS’ alternative payment models.

Many provisions are designed to make participation in the payment models and the Medicare Shared Savings Programs (MSSP)ACOs more appealing— which is to say less risky for the providers and more rewarding if they achieve financial and quality benchmarks set by CMS,

Here are a few of key provisions of the Value in Health Care Act that Macmillan discussed:

• Putting the sharing savings rates in the MSSP Basic track back to 50%.
• Rising the risk adjustment cap for the ACOS from 3% to 5%
• Extend the Advanced alternative payment model bonus of 5% on Medicare Part B payments another six years. Currently, it is scheduled to drop to 0.75% after 2024.
• Keep the threshold for becoming an eligible “qualified provider” who can earn the alternative payment model bonus at the current level of 50% of their Part B payments coming through an advanced payment model. The threshold is scheduled to increase to 75% in 2021, and MacMillan said that is “essentially impossible” for the vast majority of providers to meet.