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American College of Physicians Pushes Payment Reforms to Boost Value and Equity

Analysis  |  By Christopher Cheney  
   June 24, 2022

The internal medicine specialist society urges renewed effort to shift from volume-based physician payment to value-based payment models.

The American College of Physicians (ACP) has proposed a seven-part set of reforms to link physician payment to value and equity rather than volume of services.

Policymakers and lawmakers have been seeking to replace fee-for-service reimbursement in healthcare with value-based payment models since passage of the Patient Protection and Affordable Care Act in 2010. Despite more than a decade of effort, a recent study found that physician payment remains overwhelmingly based on service volume rather than service value.

ACP consists of internal medicine specialists and subspecialists. With more than 160,000 members in several countries, ACP is the largest medical-specialty society in the world.

This week, ACP published the organization's seven-part set of physician payment reforms in a position paper in Annals of Internal Medicine. Physician payment models dominated by fee-for-service approaches do not promote value or equity in U.S. healthcare, the position paper says. "Socioeconomic factors remain one of the most clinically significant contributors to health outcomes in this country, yet the current fee-for-service payment structure incentivizes volume and does not address such factors. The American College of Physicians proposes specific policy recommendations on reforming payment programs, including those designed to treat underserved patient populations, to better address value in healthcare, and achieve greater equity."

The position paper says there is a need to design "smarter" healthcare payment models. "The approach of building a healthcare system that is smarter about how dollars are spent to make people healthier must shift to one with a clear intention of decreasing health inequities and addressing social drivers of health."

The position paper urges more meaningful efforts to create value-based payment models. "Policy leaders and the clinical community must work together to make progress toward equity using value-based payment. For more than a decade, policy goals have highlighted the need to achieve greater equity, yet the fact remains that execution of these policies continues to lag. Now is the time to set a national intention to build on that experience and support implementation and assessment of payment approaches to advance health equity and overcome social drivers and other disparities that lead to poorer health outcomes."

Position one

ACP calls on Medicare and other payers to craft population-based, prospective payment models for primary and comprehensive care. These payment models should promote access to care and address healthcare disparities and inequities that are related to personal characteristics and/or social drivers of health. New payment models should be designed to improve care for underserved patient populations.

Position two

Research should be conducted to measure the cost of caring for patients who are impacted by healthcare disparities and inequities based on personal characteristics and/or social drivers of health. In value-based payment models, performance and cost measures should be adjusted for risk, health status, and social drivers of health. Performance and cost data should be used to improve the value of primary and comprehensive care.

Position three

Medicare law should be modified to establish a way to calculate savings from increased investment and payments for primary care and preventive healthcare services (Part B) that reduce emergency room visits and hospitalizations (Part A). These savings should be reinvested in primary and preventive care as well as social and public health services. Investment in primary care should not be based only on short-term cost savings because primary care improves population health, and some savings are generated over several years.

Position four

The federal secretary of health and human services should reform the Medicare Quality Payment Program to ensure the program addresses inequity, healthcare disparities, and social drivers of health. New policies and financial approaches should encourage physician practices to adopt value-based payment models.

Position five

Delivery and payment systems should support clinicians and healthcare facilities in offering care to patients when and where they need it in a range of modalities, including in-person visits and telehealth. This approach to care is particularly important for patients experiencing healthcare disparities and inequities based on personal characteristics and/or social drivers of health. These delivery and payment systems should not add administrative burdens on clinicians or inappropriately question clinician judgment.

Position six

Money should be allocated for the development of health information technology systems and communication capabilities such as broadband so that delivery and payment reforms address the needs of all patient populations. These capabilities should help patients who are experiencing healthcare disparities and inequities linked to personal characteristics and/or social drivers of health. Policies fostering these capabilities should not unintentionally redistribute resources away from at-risk patients or create incentives to avoid at-risk patients.

Position seven

Healthcare stakeholders including policymakers, payers, health systems, private-sector investors, and philanthropic organizations should develop financing mechanisms other than direct payment to clinicians such as grants to address inequities, healthcare disparities, and social drivers of health.

Related: Value-based Care Advances, but Transition Proves Challenging

Christopher Cheney is the senior clinical careโ€‹ editor at HealthLeaders.


Socioeconomic factors contribute significantly to health outcomes, but the fee-for-service payment model does not address these factors.

The American College of Physicians' proposed payment reforms would improve healthcare for underserved patient populations.

Several of the proposals would reform the way Medicare pays clinicians and healthcare facilities.

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