AMGA survey finds 60% of Medicare revenues will be tied to risk by 2019

Medicare written on paper with a stethoscope
Value-based payment models are gaining ground. (Getty/Design491)

The move to value-based care is progressing at a steady pace, with medical groups and health systems that are members of the American Medical Group Association (AMGA) anticipating that nearly 60% of their Medicare revenues will be from risk-based products by 2019.

Medicare Advantage is playing a major role in the transition, as respondents to the AMGA’s third annual risk survey reported they expect revenues from that program to equal traditional Medicare fee-for-service payments by 2019.

Although Medicare Advantage plans largely remain fee-for-service-based, AMGA members report they consider the program to be a strategic priority and to serve as a gateway to more sophisticated risk models, the group said. “Medicare Advantage is an increasingly popular option for beneficiaries. The program also represents an option for quite a few AMGA members to begin taking on financial risk, given the limited availability of other risk products,” Jerry Penso, M.D., AMGA’s  president and CEO, said in a statement.

Also, factoring in other risk-based products, including bundled payments, Medicaid Managed Care Organizations, and Medicare Accountable Care Organizations, alternatives to fee for service are expected to account for 59% of AMGA members’ revenues by 2019, compared to 53% in 2017, the group said. However, the expected decrease in fee-for-service spending is lower than members predicted in both the 2015 and 2016 surveys, according to the report.

Impediments to taking financial risk in insurance contracts remain, including administrative claims data, the group said, calling on Congress and the Department of Health and Human Services to create incentives for other parts of the industry to enter into value arrangements. As in previous surveys, members said data-sharing issues, inadequate infrastructure, limited access to capital and a lack of commercial risk products in their market are barriers to taking on financial risk.

The survey, completed by 74 of the association’s member groups, examined how and when AMGA members are transitioning from reimbursements based on volume to payment models based on value.

Members said the commercial risk market continues to lag behind federal programs. For example, 56% of respondents said they have little to no access to commercial risk products in their local markets. While more members have access to commercial products than reported in earlier surveys, commercial payers by and large are still not offering risk-based products, the report said.

Similarly, the Physician-Focused Payment Model Technical Advisory Committee, set up under MACRA to evaluate new payment models submitted by physician groups, told a congressional committee last month that it had identified three common barriers to the transition to value-based care including the need for technical assistance, greater access to shared data and field-testing of innovative payment models.