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Payments tied to alternative payment models climb as value-based barrels forward

In 2016, the total national spending on pay-for-quality hit $354.5 billion.

Beth Jones Sanborn, Managing Editor

The shift from volume to value is in full swing, according to a Tuesday report from the Health Care Payment Learning and Action Network that showed an uptick in healthcare payments tied to alternative payment models.

In 2016, about 29 percent of healthcare payments were tied to APMs compared to 23 percent in 2015, said LAN , a public-private partnership launched in 2015 to push the adoption of new value-based payment models.

[Also: A third of Shared Savings ACOs earned more than $700 million in savings]

"Payment reform plays a critical role in building a healthcare system that results in better accessibility, quality, affordability, empowerment and innovation. Results were in line with the goals of the LAN to tie 30 percent of total U.S. health care payments to APMs by 2016 and 50 percent by 2018," the LAN said.

The report used data from the LAN, America's Health Insurance Plans, the Blue Cross Blue Shield Association and the Centers for Medicare and Medicaid Services across commercial, Medicaid, Medicare Advantage, and fee-for-service Medicare market. The report analyzed more than 80 participants, accounting for nearly 245.4 million people, or 84 percent of the covered U.S. population. The findings were assigned to four categories.

[Also: Most ACOs in Next Generation, Pioneer models saved money, earned payments for 2016]

Results showed traditional fee-for-service and other legacy payments not linked to quality still owning the majority with 43 percent of healthcare dollars, compared to 62 percent in 2015, a drop of almost 20 percent. Pay-for-performance or care coordination fees, garnered 28 percent of healthcare payments compared to 15 percent in 2015. Finally, 29 percent of healthcare payments came from shared savings, shared risk, bundled payments, or population-based payments, the LAN report said, compared to 23 percent in 2015.

The increase brought the total APM national spending to approximately $354.5 billion. LAN said there could be several factors fueling the increase, including the increasing prevalence of ACOs thanks to the Next Generation ACO program and more health systems, hospitals and provider groups joining the Medicare Shared Savings Program. Also, growth for ACOs in the private sector was apparent from the first quarter of 2016 to the first quarter of 2017, with 92 organizations becoming ACOs, bringing the nationwide total to 923.3. Also, many payment arrangements with ACOs start with a shared savings approach, which falls into Category 3, and ACO contractual arrangements often move to shared risk payments after a few years of operating under shared savings arrangements. Finally, MACRA implemented major financial incentives for physician participation in Advanced APMs.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

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