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The value shift: A guide to value-based payment models

As the industry continues to shift toward value-based care, many of the Medicare alternative payment models (APMs) continue to be tested through the CMS Innovation Center to measure their effectiveness through the model period and to determine feasibility for expansion and/or permanent adoption. Many of these APMs vary regarding the patient populations they target, reimbursement and quality measurement methodology, and the provider participation requirements—as no two models are exactly alike. Therefore, it’s important when a new APM is announced, that providers understand whether the new model has applicability to their agency based on these various factors—and if there is applicability, then conduct further research to learn more about the opportunity and determine if it’s a good fit for their agency to participate. Here, we discuss a few of the value-based payment models that currently exist, how they’re evolving, and what providers can do to position themselves for successful participation.

What value-based payment models already exist in home health?

One of the more successful APMs currently in place is the home health value-based purchasing (HHVBP) model, which was implemented by the CMS Innovation Center on January 1, 2016, among all Medicare-certified home health agencies (HHAs) that provide services in nine states (Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee), representing each geographic area in the nation. These nine states have been competing on value in the HHVBP model, where payment is tied to a quality performance score that adjusts the payments by a predetermined maximum payment adjustment, up or down, for each of the five years across the initial model demonstration.

In January of this year, the U.S. Department of Health and Human Services (HHS) announced that an expansion of the HHVBP model has now been approved, which will be implemented no earlier than January 1, 2022. This is the CMS target date, so we do expect to see details of the expansion proposed in-home health rule-making this summer. It’s also anticipated that the expansion will be nationwide, and many in the industry are hoping CMS will include clarification as to how the total performance score (TPS) of the final year of the current nine-state HHVBP model demonstration will be calculated regarding the data exemptions and impacts from the current public health emergency.

What value-based payment models already exist in hospice?

Currently being tested in the CMS Innovation Center over a four-year period, the value-based insurance design (VBID) model (beginning with patient elections January 1, 2021, and later) is testing the impact on quality and program expenditures of incorporating the Medicare Part A hospice benefit into the Medicare Advantage (MA) program for Part A and Part B services, with the goal of creating a more seamless continuum of care. By voluntarily participating in this model component, MA organizations (MAOs) are incorporating the Medicare hospice benefit into MA covered benefits, while offering comprehensive palliative care services outside the hospice benefit for enrollees with serious illness. Prior to this, the hospice benefit component was carved out of Medicare Advantage and only offered under Original Medicare fee-for-service.

In this first model year, due to the limited number of CMS-approved MA plans participating, the VBID model only impacts hospices that are servicing patients in specific geographic areas where that VBID plan benefit is being offered. What’s important to know, is that for a hospice agency to service a patient who chooses the VBID plan benefit over Original Medicare, the hospice needs to abide by the new VBID model requirements in order to bill the plan and be paid. Therefore, for the VBID model, unlike some other models, hospice providers do not have to apply with CMS to participate, but rather need to know if they reside in an area where the model is being offered to determine the impact to their agency.

It’s important for hospices to stay abreast of what is happening in model year one because existing MAO participating plans can apply to expand and/or more MAOs can apply to participate in future model years—thereby expanding on the geographic areas where the model benefit is to be offered.

Other models in which agencies can apply to participate

These are some of the models in which agencies can apply to participate:

Primary Care First Model: Seriously Ill Population (SIP)

This five-year model targets chronically ill patient populations who have fragmented care, which means the beneficiary lacks a primary care physician. It currently applies to only 26 geographic regions across the country and has a per-member, per-month payment methodology with the opportunity for bonus payments.

Keep in mind that patients cannot be in the SIP benefit for longer than a year. After which, they need to either choose to go back to primary care or transition into hospice. Therefore, this model may be of interest to hospice organizations within the 26 regions since a hospice can service a patient that can then transition into hospice care.

The Primary Care First Model’s Seriously Ill Population (SIP) component was previously delayed until April 1, 2021, due to the impacts of the ongoing public health emergency. CMS has since announced that the SIP component of the model is currently on hold and under review until further notice.

Direct Contracting Model: Professional, Global, and GEO Options

The Direct Contracting Model Professional and Global risk-sharing options (five-year demonstration) are accountable care organization (ACO), risk-sharing type model options where home health or hospice providers can contract with participating direct care entities (DCEs) as preferred or participating providers based on their participation status—and will share in shared profit/losses. On April 8, 2021, CMS announced the 53 organizations participating in performance year 2021 of the Global and Professional Direct Contracting Model which started on April 1, 2021.

A third risk-sharing option, the GEO option, is targeted for CY 2022 implementation. However, unlike the global and professional options, the GEO option requires DCEs to take financial risk for a portion of all patients in a geographic area rather than only for Medicare FFS beneficiaries seeing specific providers. This option allows various waivers and benefit enhancements such as a waiver of the home health homebound requirement and the three-day SNF rule; offering enhanced benefits such as palliative/curative care and asynchronous telehealth services may be of high interest to home health and hospice providers in the GEO areas.

How can providers demonstrate their value to market themselves to value-based entities?

A good first step for providers is to identify their value proposition by identifying the impacts of their services in an outcomes-driven manner, focusing on service impacts that move the needle on costs, quality of care, and consumer satisfaction. If you are looking to win an opportunity to partner with an ACO, or contract with a managed care organization (MCO), look at how you can decrease per-beneficiary costs while impacting favorable quality outcomes, in addition to helping improve consumer satisfaction or care experience scores—which are very important, as they help enroll more beneficiaries into the ACO or MCO.

Providers need to look at their existing programs and consider how they impact outcomes, such as reducing hospital admissions, preventing falls, or improving medication compliance—all of which will garner the attention of value-based entities, particularly as medication-related issues and falls are two of the leading reasons for costly hospitalizations in the elderly and chronically ill.

And last, once a provider has identified what they’re offering, they need to identify the metrics that show value and the ability to assess and develop their data. That is where having strong analytics within your EMR is important.

Need help navigating value-based payment models? Let us help.


Brandy Shifteh
Brandy Shifteh

Brandy Shifteh, RN, BHSA, MBA, joined MatrixCare in April of 2018 as a Clinical Informatics Business Analyst, where she has been very involved in the development and enhancement of clinical analytics that supports scrubbing of OASIS assessment data, casemix/HIPPS scoring, clinical assessment reviews and coding. In April of 2019, she transitioned into a Regulations Compliance role, where she is responsible for monitoring regulations that impact home health, hospice and private duty home care, to help ensure our solutions support all existing and new regulations. She is very plugged into the regulatory community with relationships at both the state and federal level and serves as an active member on the National Government Services (NGS) Vendor Coalition group, where she provides input on MAC provider education and materials. Brandy is a Registered Nurse and comes to us with over 23 years of operations management experience in the home health, hospice and private duty home care sector, inclusive of accreditation/survey preparedness, compliance and clinical/quality improvement programming. She holds two undergraduate degrees; science and nursing and health services administration; and an MBA in computer information systems (CIS).


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