than in the federal space. Respondents provided several explanations
for this dichotomy. Payer infrastructure was and remains designed to
process claims in an FFS model.
Restructuring IT and administrative
functions to develop risk models
is costly and time-consuming, and
provides little increased shareholder value (for for-profit payers).
Indeed, any savings achieved by a
provider in FFS—such as addressing readmissions or emergency
department visits—inure to the
payer, providing groups with little
incentive to develop risk-based payment models. Respondents report
that negotiating risk-based arrangements with commercial payers has
generally not progressed beyond
attempts to reduce reimbursement
rates without corresponding incentives to AMGA members.
Importantly, employers have been
slow to demand value arrangements.
Large employer human resources
departments generally focus their
benefit strategies around increasing
employee access to providers, not
on harder-to-define “value” arrangements. Additionally, many providers
do not have a sufficiently sized
patient population to support downside-risk arrangements.
Moreover, despite the strong
desire by policymakers and some
healthcare stakeholders to move
to value, FFS remains the dominant payment model in health care.
To date, neither lawmakers nor
industry stakeholders have created
sufficient incentives or eliminated
key obstacles, which are necessary to create the tipping point that
moves the system to value.
The 2018 results indicate that MA
plans accounted for 30% of revenues,
up from 22% in 2016. Moreover, fully
capitated MA payments increased
from 10% of MA revenues in 2016
to 24% in 2018. MA revenues are
double those of any other federal
risk-based payment model.
Medicare Advantage Insights
Respondents provided several reasons for their increased engagement
with MA plans. For groups willing to
take on increasing levels of risk, MA
arrangements allow flexibility in care
delivery efficiencies. MA arrangements can provide opportunities for
AMGA members and MA plans to
target, reward, and adjust for factors
that both parties agree improve
care and the patient experience. MA
contracts can fund the services and
infrastructure providers need to optimize outcomes for MA beneficiaries.
MA allows for greater accountability
and appropriately aligns incentives
MA also allows groups to affect
the revenue side through appropriate risk adjustment; the expense
side through improved care
management processes; and the
quality side by meeting MA Star
ratings. Critically, because beneficiaries enroll in an MA plan, MA
does not share the patient attribution problem that is so prevalent in
the ACO program. AMGA members
know exactly who is in their MA
patient population, which allows
them to design programs around
keeping patients healthy or better
managing patients with high-cost,
Not surprisingly, AMGA members
are also moving to MA because it is
where their patients are going. New
Medicare beneficiaries have experience in care delivered in a network
and are willing to part with some
level of access in exchange for a rich
benefit package that can include
vision, dental, and wellness care.
Since 2016, federal ACO revenues
have remained flat, accounting for
14% to 15% of total revenues; 7%
downside risk and 8% upside-only
risk in 2018.
Commercial ACO revenues, however, have fluctuated over the four
survey years: from a low of 12% in
2015, to a high of 21% in 2017, and
16% in 2018.
At the federal level, it seems clear
that AMGA members are shifting focus from ACOs and toward
MA. Respondents report that the
regulatory framework around ACOs
makes financial success in this
model challenging at best. Patient
attribution, financial benchmarking, and risk-adjustment
methodologies have been problematic since the MSSP rollout
in 2012 (although some positive
changes around attribution and
benchmarking were included in the
2018 MSSP final rule).
Respondents noted the inherent
difficulties in taking risk on an FFS
chassis and that savings opportunities shrink year after year if the ACO
maintains a strong savings performance. This issue is exacerbated
by the fact that shared savings
payments, assuming there are
shared savings, are often not made
until a year after the agreement
period begins. Moreover, the ability
to control costs in the ACO setting
are difficult and unpredictable, as
patients are allowed to receive care
outside the medical group setting.
Four years of data clearly
demonstrate that the move to value
is slower in the commercial setting
than in the federal space.