Medicare Advantage (MA) plan spending on two-sided risk value-based care payment models increased in 2021, according to a new report.
The Health Care Payment Learning & Action Network (LAN) released findings Wednesday on the implementation (PDF) of value-based care across the healthcare industry. Overall, there was stability in value-based care participation across all categories LAN surveyed, but it showed MA is leading in the adoption of downside risk payment model participation.
“We’re behind the providers in their journey across the risk spectrum,” said Diwen Chen, vice president of payment innovation for Elevance Health, previously known as Anthem, during a session Wednesday at the LAN Summit.
LAN’s survey found that last year, 35.2% of MA payments to providers went to a combination of alternative payment models that have two-sided financial risk. That is an increase compared to 2020 when 29.3% of spending went to such models.
There was a pronounced decrease in MA spending in a payment model with one-sided risk where the provider has no financial risk for missing savings targets. In 2020, there was 28.7% of MA spending on a one-sided risk model, and this declined to 21% in 2021. Chen said a potential reason could be that long-term investment among plans into getting value-based care participation is starting to bear fruit.
“A lot of the contracting and networks that I have seen play out is that we have provided a glide path for the providers in previous years and perhaps those are now getting into that time where downside risk is hitting,” she added.
LAN’s survey of five states, 73 health plans and traditional Medicare found steady participation in alternative payment models overall. It found 40.5% of Medicare and plan spending in 2021 was devoted to providers in a fee-for-service model with no link to quality or value, slightly up from 39.3% in 2020.
Overall, there was 19.6% of spending on a two-sided risk model compared with 17.9% for 2020.
This was also the second year the LAN asked plans about their goals to improve health equity, a major priority for the Biden administration. It showed that 46% are using value-based provider arrangements to get providers to collect standardized race, ethnicity and language data and another 40% use participation in quality improvement collaboratives.
The Center for Medicare and Medicaid Innovation (CMMI) has sought to incorporate health equity measures into payment models, starting with a mandate in the ACO REACH model that all participants create an equity plan.
CMMI's director of policy development, Ellen Lukens, touted forward progress in the past year to increase opportunities for participation in payment models.
“I think we really feel that coming off the pandemic and maintaining our participation in and of itself is very positive,” she said during the LAN virtual summit Wednesday.
But Lukens cautioned that there may be a need to boost infrastructure and other support to get more providers into a model.
“We increasingly understand that we need to meet providers where they are, that not all participants in our models are in the same place in their evolution towards value-based care,” she said.
Accountable care organization participation has been flat in the past several years. The Centers for Medicare & Medicaid Services sought to address this issue by offering upfront investments to new ACOs and changing the payment benchmarks so such organizations could get a higher slice of savings.