How CMMI Value-Based Care Models Have Impacted Costs, Quality

Many value-based care models have helped generate savings, reduce costs, and improve care quality, but models must incorporate health equity and clinical outcomes to achieve true value for all, according to the Association of American Medical Colleges (AAMC).

Value-based care aims to tie healthcare payments to the quality of care rather than the quantity of care patients receive. Policymakers who participate in and develop value-based care models may differ on what they consider “value” to mean, though. Some see value in both cost savings and quality, while others see value in cost savings alone.

The AAMC issue brief explores the different types of value-based care models, whether they have achieved savings, and what is missing from value-based care.

Population-based payment models, including accountable care organizations (ACOs), have been widely successful in the healthcare space. Several Medicare ACO models, which are all voluntary for hospitals and physicians, have achieved cost savings by reducing avoidable inpatient admissions and emergency department (ED) visits.

The Medicare Shared Savings Program (MSSP), the largest ACO model in the country, achieved $1.66 billion in savings in 2021, marking the fifth consecutive year the program has generated savings for Medicare.

The Pioneer ACO Model, whose elements were eventually incorporated into MSSP, achieved $254 million in net savings from 2012 to 2013 relative to MSSP. These ACOs reduced inpatient admissions, ED visits, and post-acute care utilization.

Other ACO models have not generated net savings for Medicare, including the Next Generation ACO Model, which achieved gross but not net savings for CMS from 2016 to 2021 after accounting for shared savings. However, the model still reduced spending and utilization measures for acute care, professional services, and post-acute care.

Population-based models that include capitation have had differing impacts on costs and quality. The Primary Care First (PCF) Model includes monthly capitated payments for patients assigned to a provider and additional revenue for primary care visits delivered to patients. The model builds on two earlier primary care models, Comprehensive Primary Care (CPC) and CPC Plus, which reduced inpatient and ED utilization but did not decrease costs.

Meanwhile, the Maryland All-Payer Model achieved the largest savings to date of any CMMI model, generating $975 million in net Medicare savings from 2014 to 2018.

“Capitation is intriguing for both public and private payers because it allows the insurers to offload most or all the financial risk to providers, while the payers keep a slice of the total cost of care to cover administrative services,” AAMC wrote.

“To be willing to take on this degree of financial risk, providers must believe the capitated payments and the associated quality measures are directly related to clinical decisions in their control.”

Value-based care models incorporating episodic payments focus on specific conditions or procedures. Most episodic payment models are voluntary, but CMMI has indicated that future models will likely be mandatory.

The Comprehensive Care for Joint Replacement (CJR) Model, currently the only mandatory bundled payment program, achieved $21.5 million in net savings from 2016 to 2019. The Bundled Payments for Care Improvement (BPCI) Model and the BPCI Advanced Model have both achieved gross savings.

While value-based models have produced savings and improved health outcomes, existing models are lacking health equity, according to AAMC. CMMI has committed to incorporating health equity into future models, but several challenges remain.

For models to address patients’ unmet needs, the needs must be identified, which is difficult to do when data on social needs and patient demographics is lacking. Many providers screen for health-related social needs, but the data is not captured in billing codes that payers can access. Additionally, payers and providers do not consistently collect race and ethnicity data.

This lack of data makes it challenging to account for patients’ health-related social needs in the risk adjustment and measure the impact of value-based care models on health equity.

The underrepresentation of rural and urban safety-net providers in value-based models has also created health equity issues, as patients with higher health-related social needs are less likely to reap the benefits of value-based care.

Most value-based models only measure outcomes by patient experience and mortality, indicating a lack of focus on clinical outcomes.

“Lack of granular, timely data — and a lack of understanding of how to use what we have — are primary limiting factors in measuring clinical outcomes and comparing them between entities,” AAMC wrote. “Addressing this gap is crucial and will require a multifaceted approach, including investments in data infrastructure, in systems that facilitate using the data effectively and in a timely fashion, and, in some cases, in developing new measures.”