Almost 40% of healthcare dollars spent in the U.S. are tied in some way to value-based payment and goals. The rest remain under fee-for-service models.
On July 24, 2020, the bipartisan Value in Health Care Act (The Value Act) was introduced in Congress and supported by 13 of the nation’s leading healthcare stakeholders, to accelerate Medicare’s move to value-based payments by improving accountable care organizations (ACOs) and other alternative payment models (APMs).
While value-based payments have grown, ACO’s have not kept pace. According to Clif Gaus, Sc.D., president and CEO of the National Association of ACOs, since Centers for Medicare and Medicaid Serives’s (CMS) ‘Pathways to Success’ changes in 2018, there has been a dramatic decline in the formation of new ACOs and a flattening of ACO participation. “This bill addresses several critical issues that will reignite ACO growth.”
Jeff Micklos, executive director of the Health Care Transformation Task Force, said the health care industry realizes the drawbacks of ongoing reliance on fee-for-service. “The Value Act offers thoughtful reforms to existing value programs and provides meaningful incentives for providers to adopt and succeed in patient-centered alternative payment models.”
The Value Act
The Act, say the groups, “provides appropriate shared savings rates, modifies risk adjustment methodologies, removes barriers to participation, ensures fair and accurate benchmarks, and provides educational and technical support for ACOs.”
Specifically, the proposed legislation increases shared savings rates, updates risk adjustment rules, eliminates the artificial distinction between “high” and “low” revenue ACOs, addresses ACOs’ “rural glitch,” and restarts the ACO Investment Model. The bill also reinforces the shift to value-based care by extending the 5% Advanced APM bonus for an additional six years, modifying the threshold to achieve that 5% bonus, and authorizing a study of the overlap of various Medicare APMs.
The proposal also extends and modifies Advanced APM bonuses and addressing aspects of APM overlap. “These reforms will ensure that value-based care models continue to be viable for physician and hospital participants.”
The 13 groups supporting the Value Act are:
- American Academy of Family Physicians
- American College of Physicians
- American Hospital Association
- American Medical Association
- America’s Essential Hospitals
- America’s Physician Groups
- AMGA
- Association of American Medical Colleges
- Federation of American Hospitals
- Health Care Transformation Task Force
- Medical Group Management Association
- National Association of ACOs
- Premier
The news is not that The Value Act might become law, as it still requires a long process of House and Senate approvals and a presidential signature. What is noteworthy is that that so many stakeholders are on the same page over value-based payments.
As Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, wrote: “Medical group practices remain committed to the central tenants of value-based payment reform. This legislation makes important updates to the ACO model and improves upon incentives for participating in value-based reimbursement models.”
