More Provider Orgs Have Value-Based Contracts With Private Payers

More provider organizations are participating in value-based contracts outside Medicare, as three-quarters of respondents were under contracts with commercial and Medicare Advantage plans in 2022, a study published in the American Journal of Managed Care found.

The study is based on results from a web-based survey of 100 provider organizations participating in the Medicare Shared Savings Program (MSSP) in 2022. The survey aimed to assess the number of covered lives in value-based contracts by payer category and level of contract risk.

The organizations that responded to the survey reported 15.5 million covered lives under value-based contracts. Most of the respondents (92 percent) reported covered lives by the level of contract risk.

Researchers used results from a 2018 accountable care organization (ACO) survey to compare how value-based contract participation has changed in 2022.

Between 2018 and 2022, the share of respondents with Medicare Advantage value-based contracts increased from 35 percent to 74 percent. In 2022, there were 1.7 million covered lives in these contracts. The share of organizations with commercial value-based contracts grew from 50 percent to 76 percent, with 7.7 million covered lives in 2022.

Around a third (35 percent) of provider organizations had value-based contracts with Medicaid managed care organizations, representing nearly 1.7 million lives. Seventeen percent of respondents were in Medicaid value-based arrangements, with almost 985,000 covered lives.

In traditional Medicare, 70 percent of covered lives were in a two-sided risk contract, up from 42 percent in 2018. Among this 70 percent, 7 percent were in full risk. Around half (52 percent) of covered lives in commercial health plans were in two-sided contracts, with 9 percent in full risk. This share was up from 35 percent in 2018.

Forty-five percent of Medicare Advantage-covered lives were in two-sided contracts in 2022, with 18 percent in full risk.

Downside risk in value-based contracts has increased significantly in the MSSP due to the 2019 rule changes that accelerated the timeline for mandatory downside risk. However, the number of MSSP ACOs has fallen since 2018, while the number of total MSSP lives has remained flat, the study noted. CMS aims to encourage participation with policies such as reduced downside risk requirements starting in 2024.

Data on value-based contracting outside of Medicare is slim, as few private payers subject their value-based payment models to independent evaluations. Mandatory reporting of this information could help advance research and policies about value-based care participation and growth.

Additionally, CMS could collect more information about payment and outcomes in Medicare Advantage contracts to help support this research.