CMS Constantly Pushing Improvement

We have discussed the recent history and current state of CMS on value-based care. In this, the last of the series, we will look at where CMS is going and how they will lead the way into value-based care’s future.

CMS has long stated that its goals for value-based programs are to provide better care for individuals, better health for populations, and lower the overall cost. CMS is the largest individual health care payer in the United States, overseeing both Medicare and Medicaid, totaling 41% of 2020 U.S. health care expenditures. Though CMS might work with private insurers for Medicare Advantage Plans and though individual states administer their own Medicaid programs, broad program guidelines are still determined by CMS. Due to its significant purchasing power, in terms of reimbursement, CMS will continue to command incredible influence over the healthcare industry.

Risk-Sharing Arrangements

Examining value-based care (VBC) solutions forthcoming in 2021 and beyond, CMS is ensuring that providers take on risk as well as promoting increased competition. From the Center for Medicare and Medicaid Innovation (CMMI), the Direct Contracting Model is an example of, “the next evolution of risk-sharing arrangements to produce value and high-quality healthcare.” The first performance period for the Direct Contracting Model begins April 1, 2021, and runs through December 31, 2026. Several other new VBC programs: Oncology Care First (OCF), Radiation Oncology (RO), and Primary Care First were highlighted in Enlace Health’s previous segment.

Related to provider competition, the U.S. government is concerned with mergers and acquisitions of physician groups, along with healthcare facilities driving provider consolidation within the market. This past January, the Federal Trade Commission (FTC) requested five years of claims data for inpatient, outpatient, and physician services from six health plans to evaluate the impact of provider consolidation on the healthcare economy. The FTC plans to study the results, which will provide important evidence on how mergers and acquisitions affect healthcare markets. Based on pure economic principles, free-market competition is viewed as a pivotal piece to the CMS goal of lowering costs.

Embracing Value-Based Care

Value-based programs, some mandatory, are a clear signal from CMS that healthcare providers need to embrace VBC in a real and significant way. However, CMS is not demanding that providers engage without providing the necessary tools. The primary VBC program component that is warranting provider success is timely and actionable data. Building upon CMMI lessons learned, data sharing, and transparency with reporting is a focal point for value-based program success. CMS has issued multiple Requests for Information (RFIs) related to future VBC projects where provider reporting is the main component. CMS is committed to providing actionable analytic insights from data in a timely manner. This is imperative as CMS realizes that if the provider fails, so will CMS, or any other payer that follows the program.

CMS is also signaling a more open-sourced approach, encouraging commercial plans, in collaboration with Medicare and Medicaid, to participate in VBC to help create nationally standardized programs. A coordinated method is desperately needed, as many health plans and insurers have specific customizations and requirements, which makes it difficult for providers to manage multiple programs effectively. Through the incentivizing of standards with design and collaboration, while providing insightful, meaningful data, CMS predicts healthcare providers will be more likely to participate in VBC and will be more successful in managing their value-based program(s).

CMS has been working hard for years, trying and testing various approaches on how to bring value and quality into the reimbursement structure for healthcare. CMS has learned from various trials, in which they have made adjustments and developed new programs to improve upon the preceding iteration. Due to its large member base, CMS has the ability to help change healthcare reimbursement by creating standards in payments. It will be interesting to watch the next evolution of VBC, as CMS attempts to bend the cost curve downward while increasing the quality of care in the United States.


Distribution of health care expenditure from 2015 to 2021, by payer

CMS: Global and Professional Direct Contracting (GPDC) Model

FTC to Study the Impact of Physician Group and Healthcare Facility Mergers

Value-based Care After Covid-19: What Health Leaders Need to Know

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