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LUGPA Policy Brief: Enhancing Value-Based Care Adoption through Federal Legislation


September 7, 2023


Since 2008, Medicare has been transitioning from fee-for-service to value-based care models. These models focus on quality improvement by linking payments to specific quality measures, demonstrating efficiency and effectiveness. Value-based care aims to enhance patient care population health strategies and reduce healthcare costs.

This data-driven approach requires providers to report metrics to payers, showcasing progress in patient outcomes, population health, patient engagement, health IT utilization, and preventive care. Providers are incentivized under these models to adopt methods like evidence-based medicine, patient engagement, health IT upgrades, and data analytics, with increased payments for successful implementation.

Value in Health Care Act

The Value in Health Care Act of 2023 is proposed legislation endorsed by physicians and medical groups. It aims to modify Medicare's Alternative Payment Models (APMs) to encourage broader participation in value-based health programs. The Act proposes changes to enhance the involvement of accountable care organizations (ACOs), aligning with improved care quality, outcomes, and cost reduction goals.

The Value in Health Care Act introduces several modifications to APM and ACO parameters:

  • Increasing shared savings for early Medicare ACO program participants to attract more engagement.
  • Adjusting risk assessment to consider community-specific health risks for more accurate participant representation.
  • Eliminating arbitrary distinctions within ACO programs to ensure equal participation opportunities.
  • Adjusting performance metrics to establish fair benchmarks that prevent participants from competing against their past achievements.
  • Providing enhanced technical support for ACO participants to offset initial setup costs.
  • Extending participation incentives for Advanced APMs by two years.
  • Adjusting arbitrary thresholds for Advanced APM qualification to align with the evolving value-based care movement.

The Value in Health Care Act of 2023 would represent a vital step toward expanding value-based care adoption among healthcare providers.

LUGPA supports a specialty-focused, value-based care model. In 2017, LUGPA submitted an APM application to the Physician-Focused Payment Model Technical Advisory Committee (PTAC) titled "Initial Therapy of Newly Diagnosed Patients with Organ-Confined Prostate Cancer."

This APM incentivized patient-physician shared decision-making by compensating physicians for responsible active surveillance (AS) management of low-risk localized prostate cancer patients. Despite PTAC's recognition of its appropriateness and benefits, it was not recommended to CMS, raising concerns about CMS's approach to value-based models.

LUPGA believes independent providers can play a central role in moving healthcare toward value-based care; however, independent practices have been shut out of alternative payment models (APMs). LUPGA emphasizes the pivotal role of independent healthcare providers in advancing value-based care but points out their exclusion from alternative payment models (APMs). In their October 2022 testimony to Congress, LUGPA proposed five key recommendations for improvement:

  • Revamp payment updates by preventing Medicare fee cuts, repealing sequester and PAYGO cuts, and adopting a reliable cost-based payment system.
  • Foster Physician-Focused Payment Models (PFPMs) by enhancing input from independent physicians in APM development, mandating testing of approved APMs, and encouraging CMMI to adopt PFPMs independently.
  • Reform the MIPS program to reward quality and value, abolish the winner/loser approach, expand exceptional performance bonuses, and establish relevant metrics.
  • Establish equitable Medicare payments for physician-administered drugs and outpatient surgical procedures.
  • Institutionalize recent Stark and Anti-Kickback law reforms, promoting innovative integrated value-based care models with eventual risk-sharing arrangements for outcome-aligned payments.

CMS's Prospective Episode-Based Payment Model

One recent development in CMS’s efforts to promote value-based care is a planned effort to promote episode-based care. In July, CMS initiated a request for information (RFI) to develop a prospective episode-based payment model aimed at comprehensive patient care across clinical episodes. The model seeks insights from stakeholders on care alignment, clinical episode selection, participant eligibility, health equity considerations, quality metrics, payment structure, and methodology.

The model aims to improve care quality while reducing federal healthcare expenditures, building upon initiatives like Bundled Payments for Care Improvement (BPCI) and BPCI Advanced. Two specific goals of the new model are to improve care transitions for the beneficiary and increase the engagement of specialists within value-based, accountable care. The model is projected for rollout in 2026, allowing time for refinement and alignment.

For additional information on value-based care, you can read LUGPA’s brief on the issue here: www.lugpa.org/value-based-care-models