CMS New Payment Models Aim to Ease the Transition to Risk

Dennis Butts, Modern Healthcare

Providers and analysts are calling new value-based physician payment models announced last week by the CMS game-changers, potentially signaling a new era in which many providers are taking on downside risk and responsibility for total cost of care.

The five new voluntary payment models, which are available under the Primary Care First heading through the CMS Center for Medicare and Medicaid Innovation, vary in levels of risk, but all involve providers receiving fixed payments based on their population of Medicare beneficiaries. They’re also designed to encourage improvement on quality metrics and lower costs through bonuses and penalties. 

Two of the models are essentially riskier versions of existing primary-care experiments, while the remaining three are Direct Contracting models that are new to Medicare, with two requiring providers to take on full risk.

Providers and analysts alike are touting the models as a significant moment in the movement to value-based payment, which has been talked about for years with little actual adoption. 

“The shift won’t happen by tomorrow, but over the next two to four years you are going to see a drastically different marketplace, and I think looking back at what actually caused it to change, we are going to look back at this moment—I think it’s potentially that significant. We will have to see how providers respond and take advantage of the opportunity,” said Dennis Butts, managing director at consultancy Guidehouse.

A Bigger Tent

Butts said the ability for technology companies to be involved in the market is “completely game-changing.” 

With tech companies leading the effort they can test new products and care designs with large patient populations and not face opposition from providers to take on more risk. 

Decisions are “no longer going to be in the provider boardroom,” Butts said. “Now it’s the hands of doctors, consumers and tech companies to drive innovation in the marketplace. The game is open for new and transformed healthcare delivery to emerge.”

Read Full Article: CMS to launch new direct-contracting pay models

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