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Navigating Payment Reform

Triggering the Tipping Point in Payment Reform

Article · November 20, 2017

Moving from volume to value in health care is a goal that has broad support throughout the health care system and among policymakers, as reflected in many state reforms as well as in bipartisan legislation like the Medicare Access and CHIP Reauthorization Act (MACRA). But as NEJM Catalyst readers know, it’s a goal that is much easier to state than achieve, as it requires new expectations and actions by clinicians, payers, purchasers, and consumers. With support from the Department of Health and Human Services, the Health Care Payment Learning & Action Network (LAN) was formed in March 2015 as a public-private initiative to accelerate the adoption of alternative payment models (APMs).

The LAN brings together health plans, private employers, consumer groups, providers, state governments, state Medicaid programs, and other partners to expand the uptake of APMs that reward the provision of better care, improved outcomes, and smarter spending. The LAN is committed to the goals of ensuring 30% of U.S. health care payments are in APMs by the end of 2016 and 50% by 2018.

As its name suggests, the Learning and Action Network is just that — involving leading experts from all facets of our nation’s health care system, learning and working together to develop and share promising practices. The first activity of the LAN was the development of an APM Framework — a shared approach to both categorizing APMs and providing a mechanism to measure how they are adopted across the country.

APM Framework: A Guide to Payment Reform

The APM Framework establishes a set of common concepts and language, and organizes payment models into a trajectory of categories emphasizing provider accountability for both the quality of patient care and total cost of that care.

In categories 3 and 4, the two most comprehensive categories defined in the Framework, the focus is on broad accountability for people’s health and outcomes, via clinical episode payment and population-based payment models rather than traditional, fee-for-service payments. By defining and promoting these new approaches, the APM Framework helps nudge the field toward more effective payment models.

Using the Framework, the LAN has conducted a new national initiative to collect spending data from leading national and regional health plans for measuring use of APMs across the country in commercial, Medicaid, and Medicare Advantage market segments. We shared the outcome of this effort at the LAN’s fall Summit. We expect the results to help shed light on how markets are evolving, and to provide a foundation for further tracking of payment reform activity.

The Promise of Population-Based Payment Models

Population-based payment (PBP) models provide a means to broaden the current payment system from fee-for-service — which supports the provision of some services but not others — toward a system that gives health care professionals the opportunity to take other, potentially more efficient steps to improve the overall health of a population for which they are responsible. At their core, PBP models offer providers the flexibility to invest resources strategically, treat patients holistically, and deliver coordinated, person-centered care — accompanied by more accountability for improving results.

The LAN has focused on several priority areas critical to the success of PBP models, which are captured through a set of papers refined by wide public comment: patient attribution, financial benchmarking, performance measurement, and data sharing. We hope that the LAN’s recommendations can help the health care community align around PBP models more quickly. By using these widely supported methods for effective PBP implementation, health care organizations and those working with them can move on to steps that improve care and potentially lower costs — for example, by proactively engaging patients and helping patients to work with their doctors to build relationships and manage their own health and wellness.

Supporting Clinical Episode Payment Models

The LAN also supports the acceleration and implementation of Clinical Episode Payment models. LAN recommendations for joint replacement, maternity care, and cardiac care focus on 10 design elements common to episode payment design. These examples span major procedures, time-limited conditions, and chronic diseases. In each case, the LAN’s work on clinical episode payments aims to support what is feasible in today’s health care system while providing a path forward to more comprehensive reforms in the evolving health care system.

Convening a National Conversation

Where there are opportunities for federal/state/private employers and plans to align around broadly supported elements of payment reform, more traction and momentum is possible. An example of this is the Center for Medicare and Medicaid Innovation’s (CMMI) Comprehensive Primary Care Plus (CPC+) model. CMMI selected payers within 14 regions to participate in this initiative to improve the quality of care and care coordination that patients receive. The LAN is supporting this work by facilitating a Primary Care Payer Action Collaborative (PAC), which brings payers together who are participating in multi-payer APMs, such as the CPC+ initiative. These payers will join a participant-driven “national table” where they can address regional and national issues and challenges related to implementing APMs with the goal of developing strategies and solutions. Through this work, the LAN aims to spur collaborative thinking, learning, and sharing on the practical opportunities and challenges involved in implementing effective APMs across multiple payers.

In addition to the PAC, which focuses on payment models for primary care, the LAN is also supporting learning and tools for implementation of maternity episode payments. All health care stakeholders are invited to participate in the LAN and to help shape payment reform.

This post originally appeared in NEJM Catalyst on October 24, 2016.

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