Payments to high financial risk APMs slightly increased in 2018 compared to 2017: survey

Slightly more healthcare payments flowed through high financial risk advanced payment models (APMs) in 2018 compared to 2017, as payers are showing growing enthusiasm for such models, a new report said. 

A survey released by the public-private partnership Health Care Payment Learning & Action Network (LAN) showed that nearly 36% of total U.S. healthcare payments in 2018 went to APMs that required some type of financial accountability from providers, a slight increase from 2017. The survey features payers in traditional Medicare, Medicare Advantage, Medicaid and commercial plans. 

“This progress is part of a continuing, big-picture trend in health care payment reform since the LAN was established in 2015,” the group said in a release. “Four years ago, one in four health care payments flowed through an APM, and today that ratio is one in three.”

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The report broke APMs into four categories. The first category is fee-for-service with no link to quality, and the second covers fee-for-service payments linked to quality.

The third and fourth categories hold providers financially accountable for not meeting appropriate care measures or cost targets.

LAN found that 35.8% of total U.S. healthcare payments in 2018 were tied to an APM in category three or four, an increase from 34% in 2017. The survey found that 41% of healthcare dollars were sent to category one and 25% sent to category two. The percentage of payments to APMs differed based on the type of payer.

LAN examined data from the Centers for Medicare & Medicaid Services (CMS) and talked to 62 health plans and seven states for fee-for-service Medicaid.

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Medicare Advantage plans had 53.6% of their healthcare dollars in categories three and four, while traditional Medicare had nearly 41% of its payments in such APMs, the report said.

Meanwhile, commercial insurers surveyed had 30% of their dollars in high-risk APMs, and Medicaid had 23.3%.

CMS has sought to spur greater adoption of APMs and value-based care over the past couple of years. The agency recently put out a proposed overhaul to the 1989 Stark Law that bans self-referrals from physicians because of industry complaints it was hindering value-based care arrangements.

The survey showed a large enthusiasm for APMs among healthcare payers. LAN found 97% of respondents believe APMs will lead to better quality and 88% think they will cause more affordable care.