COVID-19 Impact on CMS and Value-Based Care

2020 proved to be an unusual and intense year for healthcare, unlike any other seen in recent history. All areas of healthcare were impacted and forced to quickly adapt in a variety of areas, ranging from social, political, and operational issues. Value-based care became a rallying cry as it showed how providers embracing alternative payment models managed the financial turbulence better than those utilizing traditional fee-for-service payment. By the end of the year, the US government made clear that although there was unexpected turmoil in the healthcare space, the future direction of healthcare was value-based care.

Due to the rapid infectivity rate of COVID-19, three main issues emerged where value-based care clearly became the right solution: financial stability, accessibility, and care equity.

Providers and health systems who were primarily paid as fee-for-service were in real jeopardy from a financial perspective. Healthcare has always been seen as recession-proof, but COVID-19 exposed the weakness in that logic. It highlighted that quantity over quality was a risk, as patients quickly modified their behavior away from incurring conventional volume-driven services. Health plans and providers who were already embracing value-based reimbursement, especially if they were receiving PMPM payments, were able to weather the shutdown financially.

The second issue was in relation to accessibility. Telehealth was a form of access to care that many in the value-based care space had already started to embrace. That said, telehealth was not regularly accepted as mainstream due to reimbursement obstacles and due to providers, who simply didn’t like the concept. Patients on the other hand jumped at the opportunity to embrace telehealth, which highlighted several major flaws in the current “brick and mortar” system. Telehealth opened up accessibility for those whose main barriers to going to the doctor were distance and timing. In 2019, Telehealth visits increased by 57%. For those with a chronic illness, this increase was even higher at 77%, with the majority of patients being first-time users. Providers and payers who already had telehealth programs in place were able to quickly scale to better manage patient care. Newcomers to telehealth struggled with the added expense, remote training, and adoption.

Another example of telehealth’s advantage over in-person care is within mental health. Due to the limited availability of the number of mental health providers, access to direct in-person care has historically been a tremendous challenge. Additionally, for some mental health patients, attending in-person appointments is a barrier to care. Telehealth truly exploded and new companies started catering to patients and their mental health needs right as the nation started to go into lockdown. Capitalizing on this success, health insurance companies started to bring telehealth providers in-network. This expands patient access through covered network benefits. It is easy to see how value-based programs will grow in this sector of healthcare.

COVID-19 also exposed inequality in healthcare in many ways. Accessibility has always been a concern, but it also manifested areas of opportunity on multiple fronts, such as employer-tied healthcare, food scarcity, internet access, race, gender, and age. Many health plans scrambled on how to address these variables in the short term given the risks involved and worried about long-term solutions. Value-based care illustrated it can be incredibly beneficial to ensure the member is getting quality care when social determinants of health (SDOH) programs are in place. Value-based programs often include an evaluation of the members’ needs to make certain they are given access to community programs that can help address certain inequities. Others, due to directly tying quality of care to payment, become member agnostic when it comes to guaranteeing consistency in care regardless of potential known or unknown biases. As these programs evolve over time, equality in the delivery of healthcare, along with meeting the patient where they are instead of just calling them non-compliant, will become muscle memory for the industry.

While all this was happening during COVID, the government was still responsible for instituting policy and budgets. 2020 was a year filled with a lot of information and change. Moving in the same direction as price transparency and the direct impact COVID-19 had on the long-term viability of CMS programs, the government evaluated value-based programs and published their results. Shortly after the publication of the results and along with emails to BPCIA participants, Seema Verna, the Administrator for CMS, started making appearances and posting op-eds. It became clear that few of the 54 models that The Center for Medicare and Medicaid Innovation (Innovation Center) had implemented were actually successful, with only 5 proving to lower costs and improved quality.

Bundled (or episode of care-based) payment, though not productive in its initial approach, did hold great promise, especially when key concerns were addressed during program design. Ensuring appropriate pricing, implementing downside risk to ensure providers have “skin in the game,” and providing bundle definitions that are both narrower in scope and more focused on quality are all pivotal to a successful program. CMS promoted value-based bundled payment as a way to make CMS solvent again. Seema mentioned that bundles will become mandatory. She also stated that CMS intends to expand bundled payment programs into Medicaid. In addition, CMS plans to engage with payors directly to help push bundle programs and other successful value-based approaches as mainstream payment methodologies within the industry.

In the next segment, we will look at what is new from the CMS Innovation Center and how value-based approaches will grow in 2021.


Value-based Care After COVID-19: What Healthcare Leaders Need to Know

COVID-19 and the acceleration of value-based healthcare

2020 State of Telemedicine Report

Health And Human Services Integration: Generating Sustained Health And Equity Improvements

CMMI nudges providers toward value, but progress is limited

Transforming Medicare’s Payment Systems: Progress Shaped By The ACA

Correcting the course of value-based care models

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