Value-based Care

Payers and providers are increasingly adopting value-based care, although they need to continue to invest in the models and collaborate to make them work, according to a report released on April 10 by AHIP, the American Medical Association (AMA) and the National Association of Accountable Care Organizations (NAACOS). The 74-page report identified best practices for developing payment arrangements for value-based care, including establishing clearly defined contract terms and considering ways to incentivize payers and providers to participate and move away from fee-for-service arrangements.

“Our goal here — AMA, AHIP and NAACOS — is to identify these real world best practices, get those in the hands of health plans, of physicians and clinicians and the teams in general, the VBC entities, so that they can really absorb this information [and] take action based on it related to their own participation in these models, so that we can really scale this nationwide,” Danielle Lloyd, AHIP’s senior vice president of private market innovations and quality initiatives, said during an April 12 panel discussion at the NAACOS Spring 2024 conference in Baltimore.

Thanks to a final rule published just one year ago, Medicare Advantage plans as of Jan. 1 were expected to meet new constraints when it comes to applying their utilization management (UM) policies, including prior authorization. CMS has said it aims to assess UM-related performance of plans serving 88% of beneficiaries this year, and it intends to accomplish this through both routine program audits and “focused audits.” According to compliance experts, the volume of audit activity since CMS began sending engagement letters in late February suggests the agency is eager to meet its goal, but it may not like what it finds.

As Medicare Advantage organizations continue to face intense scrutiny — from the government’s latest probe into UnitedHealthcare to the Medicare Payment Advisory Commission calling attention to the cost of higher coding in MA — a new report underscores the power of whistleblower lawsuits in enforcing program requirements. Recent False Claims Act (FCA) settlements with the Dept. of Justice reflect a continued focus on MA insurers submitting inaccurate diagnosis information for the purposes of inflating reimbursement, and while the DOJ isn't involved in proposed class action lawsuits accusing major insurers of using artificial intelligence to wrongfully deny claims, such litigation “bears continued watching as it progresses.”

The U.S. Dept. of Justice (DOJ) has opened an antitrust investigation into UnitedHealth Group, according to an internal company document shared with AIS Health and a Wall Street Journal report citing unnamed people familiar with the matter.

Federal regulators are reportedly seeking information about how the Minnesota-based company’s UnitedHealthcare insurance arm interacts with the many provider acquisitions that its Optum division has made in recent years — and how that relationship affects competition.

One health care economist says that while many unanswered questions remain, the result of a different investigation into provider consolidation suggests that the DOJ’s probe of UnitedHealth could end in an antitrust lawsuit.

The Cigna Group may sell its Medicare Advantage business to Health Care Service Corp. for between $3 billion and $4 billion, according to the Wall Street Journal. After Cigna and Humana Inc. reportedly abandoned their rumored talks of combining, Bloomberg last month reported that HCSC and Elevance Health, Inc. were competing to buy Cigna’s MA segment. Sources close to the matter said Cigna is in “exclusive talks” with HCSC, which operates Blue Cross and Blue Shield plans in five states, the Wall Street Journal reported on Jan. 3.

After securing an amended credit agreement with JP Morgan, Bright Health Group, Inc. on Jan 1. finalized the previously announced sale of its Medicare Advantage assets to Molina Healthcare, Inc. The technology-driven startup on Dec. 29 said an amendment to its credit facility with JP Morgan would reduce the final repayment amount by roughly $30 million to approximately $298 million. With the close of the MA sale — which involves the California plans Brand New Day and Central Health Plan — the company has eliminated its secured debt and will use the remaining proceeds of the sale to “provide a solid foundation” for advancing its NeueHealth accountable care organization business, according to a Jan. 2 press release. Molina in December said it would buy the MA plans for approximately $425 million, down from the originally announced $510 million; analysts speculated the discount had to do with underperformance in Bright’s MA business due to heightened Medicare utilization trends in 2023.The deal nets Molina 121,863 MA members, boosting its membership by 115%, according to AIS’s Directory of Health Plans.

Across the U.S. in 2022, 24.5% of health care payments involved two-sided financial risk reimbursement arrangements, according to an analysis published on Oct. 30 from the Health Care Payment Learning & Action Network (HCPLAN). That is up from 19.6% in 2021 and 17.9% in 2020.

While the upward trend is encouraging for those interested in shifting away from a fee-for-service model, health policy experts tell AIS Health, a division of MMIT, that more needs to be done to encourage providers to embrace value-based care. They add that adoption varies based on the payer, with Medicare leading the way and private commercial plans lagging.

Despite the program receiving continued pushback from progressive lawmakers, data from the since-renamed Global and Professional Direct Contracting (GPDC) Model suggests that it is making significant strides, with participants driving gross savings exceeding $870 million in 2022, more than seven times the $117 million in gross savings reported for performance year 2021. At least five known Medicare Advantage sponsors have subsidiaries participating in the model, which allows Accountable Care Organizations (ACOs) to share risk and receive capitated payments for serving fee-for-service (FFS) beneficiaries.

CMS, in a fact sheet highlighting the performance year 2022 data, observed that the total financial savings increased year over year because of “growth in model participation, a longer performance period in PY2022 (12 months vs. 9 months in PY2021), and performance improvements by model participants as they gained experience.” Last year, 99 Direct Contracting Entities participated in the model, up from 53 DCEs in 2021, with 21 million beneficiary months, compared with 3 million beneficiary months in 2021.

Despite the program receiving continued pushback from progressive lawmakers, data from the since-renamed Global and Professional Direct Contracting (GPDC) Model suggests that it is making significant strides, with participants driving gross savings exceeding $870 million in 2022, more than seven times the $117 million in gross savings reported for performance year 2021. At least five known Medicare Advantage sponsors have subsidiaries participating in the model, which allows Accountable Care Organizations (ACOs) to share risk and receive capitated payments for serving fee-for-service (FFS) beneficiaries.

CMS, in a fact sheet highlighting the performance year 2022 data, observed that the total financial savings increased year over year because of “growth in model participation, a longer performance period in PY2022 (12 months vs. 9 months in PY2021), and performance improvements by model participants as they gained experience.” Last year, 99 Direct Contracting Entities participated in the model, up from 53 DCEs in 2021, with 21 million beneficiary months, compared with 3 million beneficiary months in 2021.

A systemwide shift in the direction of value-based contracting has, since the turn of the century, been a cherished goal of many policymakers and health plans. A panel of experts say that a national focus on value-based reimbursement has yielded tangible results, although they say much more must be done to facilitate the value-based care transition — and point out that government may have to play an even bigger role than it already has to make that transformation happen.

Generally, value-based care is defined as paying providers based on cost and quality metrics, rather than per service or visit, and may believe widespread implementation of value-based payment could bring down overall health care spending. It's no secret that health care costs and spending per capita are much higher in the U.S. than they are in other wealthy countries — and experts predict that commercial insurance costs are set to rise steeply over the next few years. However, according to Melinda Buntin, Ph.D., a professor at Johns Hopkins University’s schools of public health and business, increased scrutiny from policymakers and the health care sector on prices over the past two decades has had some impact.

As the CMS Center for Medicare and Medicaid Innovation works toward its goal of having all fee-for-service (FFS) Medicare beneficiaries and most Medicaid beneficiaries in accountable care relationships by 2030, CMMI this year has unveiled three models aimed at advancing value-based care. One of them is the Guiding an Improved Dementia Experience (GUIDE) Model, which combines care coordination, caregiver support and respite services to improve the quality of life for people with dementia and their caregivers while delaying avoidable long-term nursing facility placement. Although the model does not serve Medicare Advantage beneficiaries, its mission appears to parallel specialized MA plans that offer supplemental benefits aimed at helping people age in place, deploy interdisciplinary care teams and empower caregivers to play an active role in their loved ones’ care.

An estimated 6.7 million people in the U.S. are currently living with Alzheimer’s or another form of dementia, and that number is expected to grow to nearly 14 million by 2060. Medicare will cover most of those Americans at some point, but the program as it exists today does not have a standardized care delivery approach for dementia, observed Tonya Saffer, director of the division for health care payment models at CMMI, during a Sept. 13 webinar on the model hosted by Manatt, Phelps & Phillips, LLP.