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The Center for Medicare and Medicaid Innovation will take a closer look at value-based payment models, with CMMI’s chief operating officer Jon Blum noting that full-risk models can lead to overpayments by federal agencies and penalize providers with more vulnerable patient populations.

“I don’t think that CMS will be promoting models that have more risk just for the sake of having more risk,” Blum said at the National Association of Accountable Care Organizations conference Thursday.

Although the comments were vague, their implications could be huge—it could signal that CMMI aims to restructure payment models to crack down on inappropriate coding, shift the focus of value-based programs to reduce patient inequities and cut down on initiatives that only serve to empower dominant providers with large market shares, said Dr. Mai Pham, former head of CMMI.

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“Providers, once they’re motivated by a risk budget or other incentive, they can get very creative with coding,” said Pham, who currently serves as CEO of the Institute for Exceptional Care, which works to improve care for people with intellectual and developmental disabilities.

As CMMI designs new payment models, the organization will be thoughtful about the incentives offered, and consider how risk-adjustment programs incentivize physicians and health plans to record patients as sicker so they can keep more reimbursement, Phan said.

This direction represents a sharp departure from the previous administration, which “promoted risk over everything else,” said Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association. That approach ultimately stalled efforts to promote value-based care nationwide since independent practices and small medical groups structured around a fee-for-service system were unable to make the capital investments necessary to switch their operations to focus on value.

Under the Trump administration, some providers simply chose not to participate in the accountable care organization programs, Gilberg said.

“The ones that were successful tended to be clustered in areas with practices where they were wealthier, and perhaps not as economically and racially diverse areas,” he said.

As an example, Gilberg pointed to the “Pathways to Success” program, which required new accountable care organizations to accept downside risk after three years of participation—much faster than under the Medicare Shared Savings Program, which launched the ACO program as part of the Affordable Care Act. The aggressive risk involved reportedly dissuaded new entrants from participating in the model, with just 35 ACOs entering the program in 2020, down from an average of 107 in 2018, according to the National Association of Accountable Care Organizations.

“When you have half your patient population under risk, and your other half under fee-for-service, it creates competing incentives,” Gilberg said. “The bottom line is that he wants to meet practices where they are along the risk spectrum.”

Full risk-adjustment models that excluded some providers excluded some patients.

Physician participation in ACOs is lower in places with more vulnerable populations than in more affluent communities, limiting vulnerable populations’ access to these clinicians which could exacerbate existing disparities in healthcare quality. Nearly 36% of primary care providers working in zip codes with the lowest Black population participated in ACO, while just 26% of clinicians working in zip codes with high proportions of Black populations participated in an ACO, according to a 2016 report in Health Affairs.

“The specter of disparities looms large over these payment models,” said Dr. Joshua Liao, medical director of payment strategy at the University of Washington School of Medicine.

Multi-payer models created with both private and Medicare payers in mind help physicians ease into accepting risk, since it allows physicians to align the incentives of multiple, larger patient populations and simplify the structure of their operations.

“If half of my patients are Medicare, and 30% are commercial payers, then if they do a shared program, then I can deliver changes to 80%,” Liao said. “It increases the likelihood that the changes in care can impact more people.”

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