Practices should take gradual approach to value-based pay, Alliance of Community Health Plans says
Group says current physician payment system is inadequate and that reforms should be developed as primary care practices evolve.
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Current physician payment models are placing too much pressure on managers to convert quickly to value-based payment, a new report by the Alliance of Community Health Plans claims, and instead should more gradually impose risk models so that practices have time to make the needed investments.
Gradual phasing in of value-based models is only one of the recommendations made on Monday by the nonprofit advocacy group, which said the change is needed as a result of new rules. Between 2016 and 2019, the Medicare Access and CHIP Reauthorization Act will give physicians a fee increase of 0.5 percent per year. But from 2020 to 2025, no across-the-board fee increase will be granted, because physicians treating Medicare beneficiaries will have been asked to choose between two newly designed payment paths. Both base payment on performance and quality metrics and participation in efforts to improve care and restrain cost growth.
[Also: Doctors must drive quality as providers move from volume to value, expert says]
A few providers are already seeing the benefit of a gradual approach to risk-sharing.
Tufts Health Plan in Watertown, Massachusetts, for example, introduces risk along a spectrum and individually evaluates provider groups at each step to assess their readiness to assume more risk. A path is tailored for each provider group, with the idea that the transfer of risk is a step-by-step process from fee-for-service to full provider risk.
Depending on the practice structure, Tufts found that it takes a practice at least two to three years to move from fee-for-service to some degree of risk-sharing, and at least five years to transition to a full-risk, capitated payment -- which may not be a linear process.
Group Health Cooperative in Seattle customizes the approach, meeting groups where they are in terms of readiness, clinical leadership, reporting infrastructure and total cost of care alignment. The group rewards incremental improvements, too. Providers are ranked on a scale from A to D, and rewards are paid out based on both high performance and effort. Providers with an 'A' ranking, for instance, have a score higher than 80 percent and are therefore eligible for larger bonus payments. For lower-performing groups, Group Health identifies a set of clinical targets meant to foster early and immediate improvement.
Tailoring measures to the performance improvement goals of physician practices allows them to account for infinite variations in healthcare systems across the country.
"Understanding what constitutes quality and how it is rewarded requires a set of measures that reflect desired outcomes such as fewer hospital readmissions or heart attacks," the group wrote in its analysis; but the volume and type of measures, it said, vary from market to market.
For instance, Security Health Plan in Marshfield, Wisconsin, with many payers in its market, employs the Five-Star Quality Rating System used by the Centers for Medicare and Medicaid Services; using the same guidelines as the federal government enabled providers "to more easily accept alternative payments from a variety of plans in the region, without placing an undue administrative burden on the practice," ACHP said.
UPMC Health Plan in Pittsburgh, Pennsylvania, has only two major payers, and the plan has an affiliated delivery system, so they took a different approach. Because high numbers of health plan enrollees are cared for within the UPMC delivery system, plan leaders decided to collaborate directly with providers to develop measures reflecting the needs of payers, providers and patients.
[Also: Private accountable care organizations take off; What to know about these value-based models]
Another ACHP-suggested strategy is to develop actionable performance data, which includes quality, cost and patient experience. The data, said ACHP, should highlight clear improvement targets and a path for reaching them. The group argues that health plans are essential in this process, and should hold regular meetings with physician practices to review data, pinpoint improvement opportunities and share best practices.
Because provider groups differ in their data analytics capabilities, HealthPartners in Minneapolis, Minnesota, developed a tool endorsed by the National Quality Forum to examine performance on individual patient and population-based measures like hospital admissions and readmissions, orders for high-tech radiology and emergency department visits. The reports allow clinicians to identify areas for improvement.
ACHP is also calling for a system in which clinicians are rewarded at the individual level, rather than the practice level. If they're not, the group said, it's possible that while a large physician group or hospital may be paid under a new value-based approach, the individual providers will still be reimbursed on a fee-for-service basis.
"Payment reform that truly changes the trajectory of healthcare costs in the U.S. depends on a broad national policy that can be tailored to the unique needs and structures of local communities," ACHP said.
Twitter: @JELagasse
