CMS official: Don't expect a lot of fully risk-based payment models going forward

Calculator that says "Medicare" on it on top of money, next to bottle of pills
The Centers for Medicare & Medicaid Services plans to simplify its approach to value-based care payment models going forward, a top agency official said. (Getty Images/liveslow)

Don’t expect a lot more fully risk-based payment models from the Center for Medicare and Medicaid Innovation (CMMI), a top official said.

Centers for Medicare & Medicaid Services Chief Operating Officer Jon Blum detailed the agency’s vision for value-based care during the National Association of Accountable Care Organizations' fall conference Thursday.

“I don’t think that CMS will be promoting models that have more risk just for the sake of having more risk,” said Blum.

Although Blum said it is still important to have risk-based models, there are data that show downsides of full-risk payment models.

“We know that when we [incentivize] risk we see some downsides to that,” Blum said. “We see stronger incentives for more diagnosis code submissions, some of which might be appropriate, some of which not.”

Another concern is when you have “more transformation towards risk that tends to favor those who are better capitalized and can afford risk,” he added.

ACOs agree to take on a share of financial risk and meet spending and quality benchmarks. ACOs that don’t meet the benchmarks will have to repay Medicare but will get a share of savings if they do.

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CMS has offered payment models that require providers to take on a high degree of risk. However, one of those models, the Next Generation ACO model, was sunset by the Biden administration.

Blum said that doesn't mean CMS won't adopt any high-risk models.

“For models to have more risk where truly get better risk and value and more equity, we will celebrate that,” he said. “But when we see risk that brings in some of the downsides of harm that brings payments that are inappropriate or skewing participation to those who can afford it, that is a challenge for us.”

Blum also gave details on CMS’ vision for value-based care going forward, including a major priority to use payment models to close health equity gaps.

“We want the healthcare system to be much more equitable, and want to serve people better,” he said. “Our innovation center team has brought forward the observation that the models we are currently running tend to involve those communities that are higher income, that are disproportionately white.”

CMMI Director Liz Fowler, Ph.D., has previously said that models may have to collect and report race and ethnicity data as a condition to participating in the models.

Another key part of the agency’s overall vision is to simplify the number of models and tracks available.

“We have lost sight of our overall vision,” Blum said. “We have lots of different models, different flavors to what is shared savings and what is accountable care. I think in that spirit of trying to create more options we have lost sight of what we really care about.”

The agency is seeking to simplify the tracks and options for providers going forward.

“The right course 10 years ago was to have many models to develop, but we are in a new phase where we want to devote resources where we think we can get the most learning and create a more simplified set of menus,” Blum said, referring to the initial founding of CMMI.