Report shows value-based care payments on the rise

February 19, 2019

Leona Rajaee

In 2015, the U.S. Department of Health and Human Services (HHS) launched a public-private partnership known as the Health Care Payment Learning & Action Network (HCP LAN). That same year, HHS announced its goal of tying 30% of fee-for-service (FFS) Medicare payments to quality or value through Alternative Payment Models (APMs) by 2016 and 50% by 2018. An APM is a payment approach that gives added incentive payments for high-quality and cost-efficient healthcare services.

The HCP LAN has collected data among payers to track the progress of the value-based payment numbers. The report released in October 2018, “Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Fee-for-Service Medicare Programs,” found a steady increase in healthcare payments tied to APMs.

The results of the 2017 data collection “show progress, with 34% of total U.S. health care payments tied to alternative payment models (APMs) in 2017, a steady increase from 23% two years ago.” The report highlights include:

41% of health care dollars in Category 1 (e.g., traditional fee-for-service (FFS) or other legacy payments not linked to quality)
25% of health care dollars in Category 2 (e.g., pay-for-performance or care coordination fees)
34% of health care dollars in a composite of Categories 3 and 4 (e.g., shared savings, shared risk, bundled payment, or population-based payments)

The collected data shows “a continued move away from a fee-for-service system that reimburses only on volume, and towards patient- and value-centered APMs.”

LAN’s data collection began on May 15, 2018, and ended on July 15, 2018, using “metrics to determine the extent of APM adoption, asking health plans and states to report dollars paid in either CY 2017 or in the most recent 12 months for which it had data.” Data collection participants included “61 health plans, 3 managed FFS Medicaid states, and Medicare FFS, representing approximately 226.3 million of the nation’s covered lives and 77% of the national market.”

Healthcare payers participating in the data collection were optimistic about the future of value-based care and payments tied to APMs. In fact, the researchers found that “90% of health plans believe that APM adoption will increase in the next 24 months.”