Leaders from the Centers for Medicare & Medicaid Services think private insurers have been too slow to adopt payment reforms, but they would be best served by adopting value-based payment systems in tandem with CMS today.
Alignment between public and private payers is key to making value-based models work, in order to "provide consistent incentives to clinicians and organizations," wrote Rahul Rajkumar, MD, JD, a CMS senior advisor; Patrick Conway, MD, CMS' deputy innovation and quality administrator; and Marilyn Tavenner, CMS administrator, in a viewpoint article published online this week by the Journal of the American Medical Association.
That doesn't mean private payers need to adopt provider contracts identical to CMS' or replicate their models.
Experimenting "with different quantitative methods for establishing financial benchmarks, measuring quality, attributing patients to clinicians and organizations, and adjusting risk is a desirable attribute of this early phase of payment reform," they wrote. Over time, however, private and public payers should "work to align both quality measures and their general approach to value-based payment and accountable care models."
But private insurers may be further along in the journey than CMS gives them credit for.
Cigna is aiming to have 100 accountable care initiatives in place by the end of the year, many of them with physician groups, while more than 50 percent of WellPoint's physician contracts now use value-based reimbursement models. UnitedHealth Group has more than $20 billion in annual reimbursements paid through accountable care contracts with 575 hospitals, 1,100 medical groups and 75,000 physicians, and is planning to double its ACO network through 2017.
CMS' early attempts to move public and private healthcare financing from fee-for-service to (broadly defined) quality-based reimbursements have shown signs of potential. In their first year, Medicare pioneer ACOs – one of 20 different payment models CMS is testing – saved $147 million and scored well on more than a dozen quality benchmarks.
However, for Medicare ACOs, there have been some early challenges, particularly with data management. Some of the challenges that cropped up in a survey of 35 health organizations participating in the Medicare shared savings program include delays in getting claims data, new skill sets to analyze data, addresses of assignees, slow stand-up of IT system, data inconsistency from CMS and translating the data into actionable information for care managers and providers.
Despite the challenges, providers in both the shared savings and pioneer ACO programs saved $380 million through January 2014, and between private and public payers, about 15 percent of the U.S. population is receiving care through an accountable care contract.
What's most important now, wrote CMS' administrators in JAMA, is having payers in general move away from fee-for-service and begin to generate new quality and cost data.