Value-Based Care

Traditional fee-for-service pays primarily for specific, itemized care delivered by clinicians. This approach has a number of potentially adverse effects, such as:

• rewarding the volume rather than the quality of care;
• putting emphasis on treatment at the expense of prevention and wellness;
• providing no incentives for integrating and coordinating care; and
• discouraging practice transformation and clinician-driven innovation.

Changes in healthcare payment, arising in part from the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), have focused on redesigning healthcare payment so that it rewards better quality care, increases cost effectiveness, ensures appropriate compensation for patient-centered care, and supports both practice improvements and clinician-driven innovations in care delivery.

This alternative to traditional fee-for-service is Value-Based Care, supported by CMS Value-Based programs.

Value-Based payment programs reward healthcare providers with incentive payments for the quality of care they give to people with Medicare. These programs are part of CMS’s larger quality strategy to reform how healthcare is delivered and paid for. Value-Based programs support better care for individuals, better health for populations, and lower cost.

Paying for better care through Value-Based programs reduces the perverse incentive to increase volume, thereby making it possible to reward clinicians who

• emphasize prevention and wellness, in addition to treatment;
• focus on improving outcomes;
• help patients navigate the healthcare system;
• integrate and coordinate care; and
• invest in practice transformation.

Value-Based programs should support a better, more patient-centered approach to care and promote clinician satisfaction.

Value-Based Care has the additional benefit of being cost effective, particularly for individuals with chronic, complex, or costly illnesses. It helps:

• limit duplicative testing;
• avoid polypharmacy;
• avert avoidable Emergency Department visits;
• increase adherence to care plans and medication; and
• improve patients’ quality of life.

How does it work? In a primary healthcare environment, Value-Based Care shifts the focus of payment from the individual office visit (usually to treat an illness or injury) to person-focused payments, which reward the clinician for keeping people well and achieving better outcomes when measured against benchmarks of quality and value.

In the context of specialty-based healthcare, Value-Based Care often pays for a comprehensive “episode” of treatment (for example, for an elective hip replacement) rather than paying separately for each of the individual office visits, tests, procedures, medications, and other services the patient receives during that time. Again, the clinicians are rewarded for achieving better outcomes when measured against benchmarks of quality and value.

In both primary and specialty care, Value-Based Care often includes accountability for the combined quality and value of care should these factors fall below predetermined benchmarks.

Paying for value is a central premise of ”Alternative Payment Models“ (APMs). APMs include:

• Enhanced Fee-for-Service models, which pay for selected services that go beyond treatment;
• Accountable Care Organizations (ACO) models;
• Episode Payment models (also known as Bundled Payment models);
• Population Health models; and
• Models that integrate care for Medicare and Medicaid beneficiaries.

What are the challenges? The transition to Value-Based Care and APMs depends on changes in day-to-day operations, the scope and delivery of care, and the relationship between clinicians and their patients.

What are the advantages to beneficiaries? Through Value-Based Care and APMs, beneficiaries may expect better access to care, more help with navigating healthcare, more coordination occurring directly between providers, more opportunities for shared decision-making, and more productive time with their clinicians. They can expect better quality care, in other words, with no increase in out-of-pocket costs.

What are the advantages to clinicians? Value-based Care and APMs offer clinicians an opportunity to make the delivery of healthcare more rewarding and fulfilling, to enhance the care they provide through support for care coordination and other services, to invest in practice transformation, and to build their own innovations in healthcare delivery and payment.

How does the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) reform Medicare payment?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) ended the Sustainable Growth Rate (SGR) formula, which would have resulted in a significant cut to Medicare payment rates for clinicians. By law, MACRA requires CMS to implement an incentive program, referred to as the Quality Payment Program, which provides two ways for clinicians to participate:

• The Merit-based Incentive Payment System (MIPS)
• Advanced Alternative Payment Models (APMs)

What are the objectives of the Quality Payment Program?

Based on feedback from thousands of physicians and other stakeholders, CMS has developed the following Quality Payment Program objectives:

• To improve beneficiary population health
• To improve the care received by Medicare beneficiaries
• To lower costs to the Medicare program through improvement of care and health
• To advance the use of healthcare information between allied providers and patients
• To educate, engage, and empower patients as members of their care team
• To maximize QPP participation with a flexible and transparent design, and easy to use program tools
• To maximize QPP participation through education, outreach, and support tailored to the needs of practices, especially those that are small, rural and in underserved areas
• To expand APM participation
• To provide accurate, timely, and actionable performance data to clinicians, patients and other stakeholders
• To continuously improve QPP, based on participant feedback and collaboration

Learn more: CMS offers in-depth information, webinars, and other resources on the Quality Payment Program website.

Where can I download Quality Payment Program Resources?

You’ll find downloadable Quality Payment Program resources below and on the Quality Payment Program Resource Library.

Clinicians can participate in the QPP either through MIPS—earning payment adjustments based on performance for services provided to Medicare patients—or through Advanced APMs—earning payment for delivering high-quality, high-value care.

Why MIPS?

Consistent with the goals of MACRA, MIPS aims to improve the relevance and depth of Medicare’s value and quality-based payments, as well as increase flexibility by allowing clinicians to choose measures and activities that are best for their practice and patients.

What is MIPS?

Under MIPS, clinicians are included if they are an eligible clinician type and meet the low volume threshold, which is based on allowed charges for covered professional services under the Medicare Physician Fee Schedule (PFS) and the number of Medicare Part B patients who are furnished covered professional services under the Medicare Physician Fee Schedule.

Performance in MIPS is measured through the data clinicians submit in 4 areas:

• Cost – 15% of MIPS Final Score
• Quality – 45% of MIPS Final Score
• Improvement Activities – 15% of MIPS Final Score
• Promoting Interoperability – 25% of MIPS Final Score

Each performance category is scored by itself and has a specific weight that contributes to your MIPS Final Score. The 2019 MIPS Final Scores may result in a positive, negative, or neutral payment adjustment that will impact Medicare payments to MIPS eligible clinicians in the 2021 MIPS payment year.

In 2017, the first year of the Quality Payment Program, 95 percent of MIPS eligible clinicians participated in the program, and 93 percent of those that participated earned a positive payment adjustment.

Where can I learn more about MIPS?

• Visit the MIPS Overview web page on QPP.CMS.GOV
• Check out resources in the QPP Resource Library, including the MIPS Eligibility and Participation Fact Sheet [PDF – 0.70 KB]
• View past MIPS webinars in the QPP Webinar Library, like the MIPS 101 webinar (slide deck available below)

An alternative pathway in MIPS is to participate in the program as part of a MIPS APM – an Alternative Payment Model that meets MIPS standards but does not necessarily qualify under MACRA as an Advanced APM. Note that many MIPS APMs also qualify as Advanced APMs. Participants in a MIPS APM may have reduced reporting requirements and the opportunity for more favorable performance under MIPS.

Advanced Alternative Payment Models: Clinicians who participate to a sufficient degree in APMs certified as Advanced Alternative Payment Models (Advanced APMs) can receive payment as Qualifying APM Participants (QPs), earning both APM-specific rewards (such as potential shared savings) and a 5 percent lump sum bonus (available through CY 2024), and are excluded from reporting requirements under the Merit-based Incentive Payment System (MIPS). See Section 6.4 for details.

An Alternative Payment Model (APM) is a payment approach developed in partnership with the clinician community that provides added incentives to clinicians to provide high quality and cost-efficient care. As defined by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), APMs include:

• CMS Innovation Center models (under section 1115A, other than a Healthcare Innovation Award);
• The Medicare Shared Savings Program (MSSP);
• Demonstrations under the Healthcare Quality Demonstration Program; and
• Demonstrations required by federal law.

To view a list of the APMs that CMS operates, download Alternative Payment Models in the Quality Payment Program [PDF – 344 KB]

APMs require clinicians to view and understand data from multiple healthcare settings. Practices that wish to implement APMs should assess their community’s existing data sharing capacity and may want to collaborate with other clinicians to develop a shared solution for sustainable APM adoption. Community leaders and clinicians who wish to develop a financial model that combines healthcare and social services can download the PCCI Shared Savings Playbook [PDF – 1 MB], a step-by-step guide for communities that are working to develop a successful shared savings program.

To learn more about strategies to support the adoption of APMs, download the Data Sharing Requirements Initiative: Collaborative Approaches to Advance Data Sharing [PDF – 2MB]

Advanced APMs

Advanced Alternative Payment Models (Advanced APMs) are a kind of APM designated by MACRA that allow practices to earn more – through the Quality Payment Program – for taking on additional risk related to their patients’ outcomes. Clinicians who participate to a sufficient extent in Advanced APMs earn Qualifying APM Participant (QP) status through which they receive added incentives and an exclusion from the requirements of the Merit-based Incentive Payment System (MIPS).

Advanced APMs in the Quality Payment Program: Clinicians who participate in Advanced APMs and earn QP status will receive a 5 percent APM Incentive Payment (available in CY 2019 through CY 2024) in addition to potential APM-specific rewards. Under MACRA, Advanced APMs

• Require participants to use certified EHR technology;
• Provide payment for covered professional services based on quality measures comparable to those used in the MIPS quality performance category; and
• Either: (1) are a Medical Home Model expanded under CMS Innovation Center authority OR (2) require participants to bear a more than nominal amount of financial risk.

To be eligible for the Advanced APM incentives and MIPS exclusion, clinicians must become QPs by having a certain percentage of their patients or payments through an Advanced APM.

As we discussed in Section 6.3, Promoting Interoperability is 1 of 4 performance categories under the new Merit-based Incentive Payment System (MIPS).

Promoting Interoperability was formerly called Advancing Care Information and requires participants to report on measures related to use of certified electronic health record (CEHRT) technology. This will count for up to 25 percent of their MIPS final score.

Note: Beginning with the 2019 payment adjustment year, clinicians will no longer receive a payment adjustment based on participation in the EHR Incentive Program. Instead, they may participate in MIPS and receive a positive or negative payment adjustment based on their final score, which includes performance in the Promoting Interoperability category.

Download 2019 Promoting Interoperability Performance Category Fact Sheet [PDF – 1.2 MB]

Small practices (defined as 15 or fewer clinicians), especially those in rural or Health Professional Shortage Areas (HPSAs), play a vital role in caring for Medicare patients with diverse needs. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provides support to help solo Merit-based Incentive Payment System (MIPS) eligible clinicians and small practices participate in the Quality Payment Program.

Additionally, the Centers for Medicare & Medicaid Services (CMS) appreciates the unique challenges that small practices face in different communities, and the Quality Payment Program provides options for clinicians in small practices.

The following website details the flexibility and support available to small and rural practices, or HPSAs, as described in the legislation. CMS is committed to a continued dialogue regarding the obstacles and challenges these practices encounter.

The CMS Primary Cares Initiative

Administered through the CMS Innovation Center, the CMS Primary Cares Initiative will provide primary care practices and other providers with five new payment model options under two paths:

Primary Care First and Direct Contracting.

The five payment model options are:

1. Primary Care First (PCF)
2. Primary Care First – High Need Populations
3. Direct Contracting – Global
4. Direct Contracting – Professional
5. Direct Contracting – Geographic

The Primary Care First (PCF) payment model options will test whether financial risk and performance-based payments that reward primary care practitioners and other clinicians for easily understood, actionable outcomes will reduce total Medicare expenditures, preserve or enhance quality of care, and improve patient health outcomes. PCF will provide payment to practices through a simplified total monthly payment that allows clinicians to focus on caring for patients rather than their revenue cycle. PCF also includes a payment model option that provides higher payments to practices that specialize in care for high need patients, including those with complex, chronic needs and seriously ill populations (SIP).

Both models under PCF incentivize providers to reduce hospital utilization and total cost of care by potentially significantly rewarding them through performance-based payment adjustments based on their performance. These models seek to improve quality of care, specifically patients’ experiences of care and key outcome-based clinical quality measures, which may include controlling high blood pressure, managing diabetes mellitus, and screening for colorectal cancer. PCF will be tested for five years and is scheduled to begin in January 2020. A second application round is also planned for participants starting in January 2021.

Like the PCF payment model options, the Direct Contracting (DC) payment model options are also focused on transforming primary care, allowing healthcare providers to take greater control of managing the costs of care for an aligned population of Medicare fee-for-service (FFS) beneficiaries. While the PCF models are focused on individual primary care practice sites, the DC payment model options aim to engage a wider variety of organizations that have experience taking on financial risk and serving larger patient populations, such as Accountable Care Organizations (ACOs), Medicare Advantage (MA) plans, and Medicaid managed care organizations (MCOs).

The DC payment model options are designed to create a competitive delivery system environment where organizations offering greater efficiencies and better quality of care will be financially rewarded. The payment model options include a focus on care for patients with complex, chronic needs and SIPs, as well as a voluntary alignment option that allows beneficiaries to align with the healthcare provider of their choosing.

Depending on the DC payment model option in which an organization is participating, the model participant will receive a fixed monthly payment that can range from a portion of anticipated primary care costs to the total cost of care. Participants in the global payment model option will ultimately bear full financial risk, while those in the professional payment model option will share risk with CMS. This will provide prospective model participants a range of financial risk arrangements from which to choose while providing a more predictable revenue stream and reducing healthcare provider burden commensurate with level of financial risk.

In addition, CMS is seeking public comment on one DC payment model option with an expected performance period launch in January 2021. The Geographic Population-Based option is designed to offer innovative organizations the opportunity to assume responsibility for the total cost of care and health needs of a population in a defined target region. Driving accountability to a local level empowers communities to devise strategies best designed to meet their healthcare needs. Given the novelty of this option, we are seeking public comment through a new Request for Information.

Together, CMS anticipates these five payment model options administered under the Primary Cares Initiative could:

• Provide better alignment for over 25 percent of all Medicare FFS beneficiaries – nearly 11 million Medicare beneficiaries would potentially be included (a collective 5 million beneficiaries in the DC payment model options and a collective 6.4 million in PCF payment model options);
• Offer new participation and payment options and opportunities for an estimated one in four (25 percent) primary care practitioners as well as other healthcare providers; and
• Create new coordinated care opportunities for a large portion of the 11-12 million beneficiaries dually eligible for Medicare and Medicaid, specifically those in Medicaid managed care and Medicare FFS.

All five payment model options focus on supporting care for patients who have chronic conditions and serious illnesses. Through the PCF payment model options, high need patients with serious illness who do not have a primary care practitioner or care coordination and indicate an interest in receiving care from a practice participating in the model will be assigned to a model participant. Participating practices that choose to care for SIP patients will be required to provide care to clinically stabilize the patient. All payment model options include enhancements to encourage participation of providers who are focused on care for these populations.

CMS based the design of these payment model options on considerable stakeholder input. The models draw from Physician-Focused Payment Model Technical Advisory Committee (PTAC) review of proposals, including but not limited, to The Advanced Primary Care Model from the American Academy of Family Physicians; An Innovative Model for Primary Care Office Payment from Jean Antonucci, MD; The Patient and Caregiver Support for Serious Illness Model from the American Academy of Hospice and Palliative Medicine; and The Advanced Care Model from the Coalition to Transform Advanced Care. All payment model options are responsive to stakeholder feedback that we received from advanced primary care practices expressing interest in accepting increased financial risk in exchange for greater flexibility and fewer requirements.

For a fact sheet on the CMS Primary Care First payment model options, please visit https://www.cms.gov/newsroom/fact-sheets/primary-care-first-foster-independence-reward-outcomes.

More information on CMS Primary Care payment model options is at: https://innovation.cms.gov/initiatives/primary-care-first-model-options/.

For a fact sheet on the Direct Contracting payment model options, please visit https://www.cms.gov/newsroom/fact-sheets/direct-contracting.

More information on the Direct Contracting model options is at: https://innovation.cms.gov/initiatives/direct-contracting-model-options/.

To view a fact sheet on the CMS Primary Cares Initiative, please visit: https://innovation.cms.gov/Files/x/primary-cares-initiative-onepager.pdf.

To review the Direct Contracting—Geographic Request for Information, please visit: https://innovation.cms.gov/Files/x/dc-geographicpbp-rfi.pdf.

Comprehensive Primary Care Plus

Comprehensive Primary Care Plus (CPC+) is a national advanced primary care model that aims to strengthen primary care through state-based multi-payer payment reform and care delivery transformation. CPC+ was built on the foundation and lessons learned from the original Comprehensive Primary Care (CPC) model.

Current participants include 2,969 practices, representing over 17,870 practitioners in 18 regions across the United States: Arkansas, Colorado, Hawaii, Kansas and Missouri: Greater Kansas City Region, Michigan, Montana, New Jersey, New York: North Hudson-Capital Region, Ohio: Statewide and Northern Kentucky: Ohio and Northern Kentucky Region, Oklahoma, Oregon, Pennsylvania: Greater Philadelphia Region, Rhode Island, and Tennessee. CPC+ Model 2018 starters represent four additional regions: Louisiana, Nebraska, North Dakota, and the Great Buffalo Region of New York.

The first cohort of CPC+ Practices began participation in the CPC+ Model on January 1, 2017, and will continue participation for five years. The second cohort began participation in the CPC+ Model on January 1, 2018, and will also continue participation for five years. The CPC+ Model includes two primary care practice tracks that have differing care delivery requirements and payment options to meet the diverse needs of primary care practices in the United States.

Care requirements for CPC+ ensure that practices in each track have the processes and skills to deliver better care. The multi-payer payment redesign gives practices greater financial resources and the flexibility to make appropriate investments to improve the quality and efficiency of care, and reduce unnecessary healthcare utilization. The CPC+ Model provides practices with a robust learning system, as well as actionable patient-level cost and utilization data feedback to guide their decision making.

The more advanced track of the CPC+ Model requires CPC+ Practices to develop health IT capabilities necessary to delivering advanced primary care in collaboration with a Health IT vendor(s). The CPC+ Model’s multi-payer design brings together CMS, commercial insurance plans, and state Medicaid agencies to provide the financial support necessary for practices to make fundamental changes in their care delivery. The CPC+ Model also promotes alignment and integration with Medicare accountable care organizations (ACOs) by allowing CPC+ practices to participate in both CPC+ and a Medicare Shared Savings Program ACO.

Approximately 1.8 million Medicare Fee-for-Service beneficiaries are attributed to participating CPC+ Practices every quarter. The CPC+ Model is an Advanced APM and MIPS APM.

CMS has released the first annual evaluation report for the Comprehensive Primary Care Plus (CPC+) Model, which details the implementation experience and impact on beneficiary outcomes over the first year for practices that started participating in the CPC+ model in January 2017. To view the findings-at-a-glance, please visit: https://innovation.cms.gov/Files/reports/cpcplus-fg-firstannrpt.pdf. To see the report, please visit: https://downloads.cms.gov/files/cmmi/cpcplus-first-ann-rpt.pdf.