Alternative Payment Models Aim to Reward Value-Based Care

The American health care system is moving from paying physicians for the volume of services they perform to the value of care they provide. This movement toward “value-based payment” has greatly accelerated in recent years to address the high level of Medicare spending and has been furthered by advances in technology—especially the proliferation of electronic health records (EHRs) and payer incentive programs to encourage the use of EHRs. The goal of this evolution is summed up in the Triple Aim: better patient experience of care, better population health, and lower per capita cost of health care.

This article focuses on alternative payment models.

Q: What are Alternative Payment Models (APMs)?

A: APMs are systems of care and models for payment specifically designed to deliver value-based care by rewarding high-quality, low-cost care. APMs include, among other models, accountable care organizations (ACOs), patient-centered medical homes, and bundled payment models for specific conditions and procedures.

Q: What is driving the creation of APMs?

A: The Affordable Care Act (ACA) has played a key role. The ACA created the Medicare Shared Savings Program (MSSP), a program designed to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service (FFS) beneficiaries and reduce unnecessary costs. Eligible providers, hospitals, and suppliers may participate in the Shared Savings Program by creating or participating in an Accountable Care Organization (ACO).

The ACA also established the Center for Medicare and Medicaid Innovation, or CMMI, to encourage and evaluate new models of care for Medicare, Medicaid, and even private payers.

For Medicare, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, encourages psychiatrists and other physicians to participate in new models of care. The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule implementing MACRA, and a final rule is due out in November. APA has delivered comments to CMS in response to the proposed rule.

Q: How does MACRA affect the payment of physicians working in APMs?

A: Many details of this program are very technical and subject to revision in the final rule and in coming years. But here is what is known so far.

• MACRA creates a new pathway within Medicare for physicians to earn substantial bonuses for participating in certain new “advanced” APMs. From 2019 through 2024, “qualifying” physicians with a substantial percentage of revenue (or patients) tied to services received through these “advanced” APMs can earn a 5 percent annual bonus. They are also exempt from reporting under the Merit-Based Incentive Payment System, or MIPS, a payment system that replaces the current Medicare quality programs. The percentage of revenue or patient percentage ranges from 25 percent the first year to 75 percent in later years. Bonuses will be based on participation two years earlier, so 2017 participation will determine 2019 bonuses. These APMs, for which the government has set very stringent standards, focus only on Medicare in the early years, but there is an all-payer APM option later on.

• Physicians with slightly less revenue or patients in “advanced” APMs are not eligible for the bonuses, but they can opt out of MIPS reporting. For those who wish to qualify for MIPS bonuses, CMS plans to develop a reporting mechanism that could automatically transfer relevant APM data into the MIPS reporting system to avoid double reporting.

• Physicians who do MIPS reporting can also receive credit for APM participation. Physicians who report under MIPS (and do not qualify for APM bonuses) can receive credit for their APM participation in the MIPS “clinical practice improvement activity” performance category.

• MACRA also established a new Physician-Focused Payment Model Technical Advisory Committee to advise and support physicians in developing new models of care and to review proposals. The committee has held two public meetings to date.

Q: Are there APMs specifically focusing on mental illness and substance use disorders?

A: New payment models are evolving to address behavioral health. Most Medicare models target primary care, physical conditions, or procedures. But Medicaid and private insurers are leading the way in developing new models that focus on behavioral health. A prime example is the collaborative care model developed by the AIMS Center at the University of Washington in which primary care practices have a behavioral health care manager who manages care for their patients with behavioral health conditions, and a psychiatrist consults with the practice to review patient progress and make recommendations for adjusting treatment. The state of Minnesota developed the first Medicaid ACO, which has emphasized improving behavioral health care.

Q: Are psychiatrists currently involved in new models of care?

A: The collaborative care model was developed by psychiatrists. Many psychiatrists—particularly those who work with integrated health systems or large, multispecialty practices—are seeing patients who are part of ACOs and other APMs. Some ACOs have a psychiatrist as their medical director or in a similar leadership position.

Q: What is APA doing to help psychiatrists participate in new models of care?

A: One of the most important activities that APA is doing is participating in the CMS Transforming Clinical Practice Initiative (TCPI). The TCPI aims to improve patient outcomes, reduce costs, and transition 75 percent of clinician practices to APMs. As a TCPI Support and Alignment Network, APA offers psychiatrists the opportunity to receive free integrated care training. APA can also connect psychiatrists with Practice Transformation Networks that can provide quality improvement, workflow redesign, data collection, and optimization of electronic health records to assist in the transition to new models of care. For more information about TCPI, click here.

APA is also working for its members in other ways:

• APA is coauthor, with the Academy of Psychosomatic Medicine, of the recent report “Dissemination of Integrated Care Within Adult Primary Care Settings: The Collaborative Care Model.” The report includes a working set of principles defining evidence-based integrated care implementation and highlights the importance of primary care integration through the collaborative care model.

• The MACRA pathway for new models of care should support the development of models for behavioral health and reward psychiatrists for participating in those models. APA’s MACRA comments will point out that it will be very difficult for new APMs that focus on behavioral health to meet the proposed “advanced” APM criteria. APA will also urge CMS to give psychiatrists the credit they deserve for caring for patients who are part of ACOs and other “advanced” APMs.

• APA will be working with APA member experts to explore new opportunities for psychiatrists to develop and participate in “advanced” APMs, including possible approval for the collaborative care model. More information will be provided to APA members as these efforts evolve. ■