The case for integrating Medicare Advantage, ACOs

Though Medicare Advantage plans are not included in the federal government's goal to transition Medicare to a value-based payment system, they should be, according to a recent Health Affairs blog post.

Part of why the Department of Health and Human Services' (HHS) goals don't include MA may be that some stakeholders would argue that its fully capitated payments are already value-based, writes healthcare research and policy consultant David Introcaso, Ph.D. Yet HHS also may not have known enough about how MA plans reward physicians for providing quality and value, he adds, as there is little to no reason for plans to provide this information.

Whatever the reason though, the exclusion of MA plans from the government's goal ignores "substantial and rapidly growing" MA spending and therefore should be corrected, Introcaso argues. With MA expected to have more than 25 million enrollees and overall Medicare spending set to reach $1.05 trillion by 2024, it will mean about 30 percent of all Medicare payments will be left out of HHS' value-based payment initiative.

The best way to rectify this issue would be to integrate alternative payment models--especially accountable care organizations (ACOs)--into MA plans, the post says. But the concept would be unlikely to happen on its own, as MA plans and ACOs have substantial regulatory differences.

That's where the Medicare Access and CHIP Reauthorization Act comes in, as it requires HHS to submit a report to Congress by July 2016 that examines how feasible it would be to integrate alternative payment models in the MA payment system. The mandate gives HHS Secretary Sylvia Mathews Burwell the opportunity to fully express her pay-for-value goals, Introcaso writes, by "re-imagining the Medicare program as a coherent whole."

The Centers for Medicare & Medicaid Services also announced this fall that it will test a new value-based insurance design model for MA plans, focusing on beneficiaries with certain chronic conditions in seven states.

To learn more:
- read the blog post

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