A new report by federal auditors offers observations about the merits of voluntary and/or mandatory participation in Medicare alternative payment models.
The Government Accountability Office this week issued a report that examines the pros and cons of mandatory versus voluntary participation in Medicare alternative payment models.
The auditors examined six Medicare episode-based payment models that were in place in early 2018, only one of which was mandatory, and asked participating providers what they liked and disliked about the models.
"In general, stakeholders reported that voluntary models largely benefit providers," GAO said.
"For example, these models tend to have more generous terms and providers can choose to participate in only those models where they are likely to be successful. On the other hand, mandatory models are more likely to give CMS generalizable evaluation results," GAO said.
The auditors looked at six episode-based payment models. Here's what they found:
- Participants often have more favorable incentives and degrees of risk required than in mandatory models because CMS wants to make the model attractive.
- Participants can self-select models and episodes where they have identified care redesign opportunities and feel they can earn performance bonuses.
- CMS is better able to test novel concepts in care redesign with early adopters. This allows CMS to assess the feasibility of a model before additional testing.
- CMS is better able to evaluate performance that is more representative of different types of providers, with results that are more generalizable.
- CMS can test models with greater financial risks and penalties because providers are required to participate.
- CMS can encourage transition from traditional Medicare to value-based care models among providers that may be reluctant to make the change on their own.
Regardless of voluntary or mandatory status, GAO found that providers in the episode-based payment models were bigger, had higher volumes, and were more often in urban areas, when compared to traditional Medicare providers.
The participating providers told GAO they entered the voluntary models because they thought they could meet the metrics and make money.
Health and Human Services Secretary Alex Azar is a firm believer in mandatory payment models. During his confirmation hearings last January Azar told the Senate Finance Committee that "we need to be able to test hypotheses."
"I want to be a collaborative in doing this. I want to be transparent and follow appropriate procedures. But if to test a hypothesis around changing our healthcare system it needs to be mandatory as opposed to voluntary to get adequate data, then so be it," Azar told the committee.
Azar reiterated his support for mandatory models in a November speech at the Patient-Centered Primary Care Collaborative Conference.
"Bundled Payments for Care Improvement is a voluntary model, where potential participants can select whether they want to join. But we're not going to stick to voluntary models," Azar told the conference.
"BPCI Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality," he said.
Azar in November suggested that radiation oncologists would soon be placed in a mandatory alternative payment model, which raised concerns from radiologists.
"We have some reservations about moving forward in a mandatory fashion and really need to learn more about what the secretary has in mind," said Dave Adler, vice president for advocacy at the American Society for Radiation Oncology.
"Our biggest concern would be going 'full mandatory,' where every radiation oncologist is required to participate in this model on Day One. That may be too much and too fast. But it'd be premature to say we object to mandatory model without having those details," Adler said.
The Medicare risk models are designed with the hope of slowing surging costs in the program.
A 2017 report by GAO found that traditional Medicare expenditures in 2017 totaled $394 billion, and that number is expected to grow to $730 billion by 2027, an 85% increase.
The increase will be driven by a number of factors, including an increase in the number of services provided per beneficiary.
“In general, stakeholders reported that voluntary models largely benefit providers.”
Government Accountability Office
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
Providers in the episode-based payment models are bigger, have higher volumes, and are more often in urban areas, when compared to traditional Medicare providers.
Participating providers told GAO they entered the voluntary models because they thought they could meet the benchmarks and make money.
The GAO report comes as HHS Secretary Alex Azar strongly suggests that more mandatory alternative payment models are on their way.