1 in 4 medical payments now linked to alternative payment models


In the wake of the Affordable Care Act’s emphasis on value-based payment models, health insurers are slowly adopting alternative payment models (APM) that link reimbursement to quality and care coordination.

Nearly 25 percent of payments made by health insurers in 2016 were made through APMs that tied reimbursement to cost and quality metrics or coordinated, population-based care, according to a report from the Health Care Payment Learning & Action Network (LAN). Comparatively, approximately 23 percent of healthcare dollars were funneled through APMs during the prior year.

The largest portion of APM payments in 2016 were made through Medicare Advantage plans (41 percent), while 22 percent of payments in commercial health plans and 18 percent of Medicaid dollars were linked to APMs.

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Through a partnership with America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association, LAN collected data from 70 health plans across the country, representing 67 percent of the healthcare market, to establish look-back metrics for 2015. Forty health plans representing 44 percent of the commercial market provided information for “point-in-time” metrics, representing expected payments based on 2016 contracts.

“This report shows the meaningful progress we’ve made to improve quality and lower costs,” Marilyn Tavenner, AHIP president and CEO ,said in an announcement. “Health plans, doctors, hospitals, businesses and public programs are all changing, all collaborating--and all improving the way we deliver care. We’re being smarter purchasers of healthcare by prioritizing efficient, effective and evidence-based approaches to delivering care. That means better quality for patients and lower costs for consumers.”

The shift toward value-based payments within public health plans has been well documented, with the federal government pushing to tie 30 percent of all Medicare fee-for-service payments to APMs by the end of this year, along with a 50 percent goal by 2018. In March, the Department of Health and Human Services indicated it had met its 30 percent target ahead of schedule.

LAN, a public-private alliance created by President Barack Obama in 2015, implemented an identical goal among both public and private health plans. Since then, payers have recognized their role in APMs and more providers have embraced value-based payments. Following the passage of the Medicare Access and Chip Reauthorization Act, physicians are likely to have more opportunities to participate in APMs moving forward.