AHA seeks to address barriers to value-based care adoption

The American Hospital Association is looking to remove barriers and better support hospitals, health systems and other providers with value-based care adoption.  

In a letter to the Physician‐Focused Payment Model Technical Advisory Committee (PTAC), the American Hospital Association, or AHA, strongly encouraged policymakers to address revenue thresholds, extend value-based incentive payments and implement sustainable reimbursement policies. AHA identified these as barriers to transitioning to population-based, total cost-of-care (PB-TCOC) and primary and specialty care models. 

Current revenue thresholds used by CMS for accountable care organizations (ACOs) have hampered participation in these value-based care models, AHA explained. For example, CMS distinguishes between high- and low-revenue ACOs in the Medicare Shared Savings Program. However, AHA said this distinction is not associated with significant performance differences. 

Furthermore, high-revenue ACOs often care for clinically complex, high-cost patients and need equitable access to advanced investment payments (AIPs). Many small and rural hospitals, federally qualified health centers and critical access hospitals are also classified as high-revenue, limiting their ability to access AIPs and adopt value-based care models. 

AHA also urged PTAC to extend incentive payments for participants of alternative payment models (APMs) under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA.  

MACRA introduced a 5% incentive payment for providers in advanced APMs to support value-based initiatives like digital tool implementation, care coordination and social determinants of health efforts. These incentives, initially authorized through the 2024 payment period, have received only single-year extensions at lower rates. 

Sustained incentive payments are crucial to encourage providers to transition to PB-TCOC, primary and specialty care models, AHA argued. The letter pushed for Congressional approval of longer-term extensions of the incentive payments. 

Additionally, AHA advised PTAC to establish common principles for PB-TOC, primary and specialty care value-based models to make them more attractive to potential participants.  

Among the principles suggested by AHA were adequate on-ramps and glidepaths to downside financial risk, risk adjustment methodologies that account for chronic risk factors and clinical complexity, voluntary participation options, balanced risk and rewards and guardrails to ensure participants do not compete against their own best performance. 

AHA also recommended increasing model design transparency, timely data access and waivers to Medicare program regulations that inhibit care coordination and adequate model duration. 

Finally, AHA urged PTAC to ensure sustainable reimbursement aligned with inflation to counter claims that value-based care models have encouraged consolidation in healthcare. Presenters at the March PTAC meeting cited acquisition of physician practices as a barrier to the competitiveness of value-based care models. 

More than a third of all U.S. healthcare payments are made through alternative payment models, according to the latest data from the Health Care Payment Learning and Action Network. More progress is needed, though, to achieve CMS’ goal of having all Traditional Medicare beneficiaries in an accountable care relationship, like an ACO, by 2030. 

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.