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Physican Practices Still Dealing with Effects of APMs

Analysis  |  By Jack O'Brien  
   October 24, 2018

Alternative payment models have presented several new challenges and opportunities for physician practices according to research from the RAND Corporation and the American Medical Association.

Physician practices are grappling with the effects from widespread adoption of alternative payment models (APMs), including an increase in the rate of change and amount of measures to meet, according to a joint study from the RAND Corporation and the American Medical Association released Wednesday morning. 

The pace of change among APMs has accelerated in recent years compared to the 1990s, which has made it difficult for physician practices to keep pace and adapt to frequent changes. In order to properly handle new APMs, large to mid-size practices have decided to spend more on consulting to expand the patient model without negatively impacting care outcomes.

The study, which is a follow up to an earlier one produced in 2014, seeks to address physician concerns about market pressures to consistently meet new value-based care initiatives and calls for payment reform to ensure the "long-term sustainability" of APMs across payers that benefit both physicians and patients. 

“Physicians tell us that it’s more difficult than ever to understand the growing complexity of payment models and they are straining against a conflicting muddle of public and private value-based policies and rules that are continually in flux,” Dr. Barbara L. McAneny, president of the AMA, said in a statement. “The resulting administrative burdens take physicians away from patient care. Today’s report is a call to action to align multiple payers and payment models with consistent measures aimed at improving patient care."

Constant results:

  1. APMs caused physician practices to implement new procedures to handle them.
  2. Financial incentives were "significantly modified" by practices before being sent to frontline physicians.
  3. Timely, high-quality data increased in importance.
  4. Operational errors remain a consistent source of frustration.

Related: Alternative Payment Model Adoption Increases

New findings:

  1. Change is coming — and it's happening quickly.
  2. Complexity among APMs is rising, too.
  3. Downside financial risk has made physician practices more averse to potential losses.

Dr. Mark Friedberg, senior physician policy researcher at RAND, told HealthLeaders that the frequency of changes among APMs is not solely to blame for operational errors and said that simplifying the payment model to reduce complexity would be serve to benefit physician practices. 

“While the practices in our sample generally voiced support for the goals of alternative payment models, these implementation challenges could make it difficult to achieve them,” Friedberg added in a statement.

Just as in the 2014 report, physician practices reported that while they embrace APMs for the noticeable improvements in patient care, leaders also found themselves challenged by a lack of data management skills and subsequently averse to taking on additional financial risk, such as cost of care overruns.

Related: New CMS Bundled Payment Model Recruits 1,300 Providers

Physician practices have become so concerned about the responsbility of additional financial risk that according to the report, some have begun renegotiating contracts with payers to reduce downside risk or transfer it to hospitals or device manufacturers. 

The report argued that allowing physicians to assist in crafting APMs, while also reducing the pace of change, would improve physician engagement as well as patient outcomes, while also reducing the "documentation burden" physicians have faced in recent years. 

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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