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What alternative payment models are right for your agency?

With the expansion of the Home Health Value-Based Purchasing (HHVBP) Model, the industry is experiencing a significant shift toward value-based care. But beyond HHVBP, there are other alternative payment models (APMs) that are being tested through the CMS Innovation Center to measure their effectiveness 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.

When a new APM is announced, it’s important that providers understand whether it has applicability to their agency based on these various factors. If there is applicability, then the must research further to determine if it’s a good fit for their agency to participate.

In this blog, we discuss a few of the models that currently exist, how they’re evolving, and what providers can do to position themselves for successful participation.

In home health, what value-based payment models already exist?

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. Originally implemented in nine states (MA, MD, NC, FL, WA, AZ, IA, NE, TN), all Medicare-certified home health agencies (HHAs) in those nine states competed on value where payment was tied to quality performance.

The original HHVBP Model was very successful, yielding an average annual savings of $141 million to Medicare with evidence of adverse risks, and demonstrating reductions in unplanned acute care hospitalizations and skilled nursing facility stays. On January 8, 2021, CMS announced its intent to expand the HHVBP Model nationwide. Subsequently, on November 2, 2021, CMS published the CY 2022 home health final rule establishing the end of the original model and the start of the expanded model. This final rule also established HHA eligibility criteria, payment adjustment rates, definition of cohorts, applicable quality measures, and payment methodology.

This nationwide expansion determined that pre-implementation would start January 1, 2022, without risk to payments until the first performance year, which recently began on January 1, 2023. HHA performance during 2023 will determine the payment adjustment incentive for the first payment year in CY 2025. As agencies navigate their first performance year, they must keep in mind the quality measures used in the expanded model are calculated using data from all Medicare and Medicaid payors based on OASIS, HHCAHPS survey, and claims-based measures.

In hospice, what value-based payment models already exist?

Beginning on January 1, 2021, through December 2024, CMS is testing the inclusion of the Part A Hospice Benefit within the Medicare Advantage benefits package through the hospice benefit component of the Value-Based Insurance Design (VBID) model. This test allows CMS to assess the impact on care delivery and quality of care, especially for palliative and hospice care, when participating Medicare Advantage (MA) plans are financially responsible for all Parts A and B benefits. This is the first time the hospice benefit is being tested in Medicare Advantage.

The VBID model has now entered its third year in CY 2023, and its growth is projected to double in coming years. In CY 2021, there were nine MA organizations with a total of 53 plans offering the benefit in 206 counties within 13 states and Puerto Rico. Compare that with CY 2022, with 13 participating MA organizations with a total of 115 plans offering the benefit in 461 counties in 21 states and Puerto Rico. In CY 2023, the estimated number of Medicare enrollees covered by participating MA plans will increase by more than 24%, with 52 participating MA organizations and a total of 1,368 plans offering the benefit in 49 states, DC, and Puerto Rico.

In 2023, CMS is requiring each applicant for the hospice benefit component to provide a detailed strategy for advancing health equity. It’s also using an updated two-phase structure for network adequacy, rather than the prior three-phase approach:

  • Phase 1: This group includes plan benefit participants in their first year of participation, in a service area the MA organization has not participated in under the model component.
  • Phase 2: This group includes plan participants that will enter their second or third year of participation in a service area the MA organization has participated in under the model component.

Can agencies apply to participate in other models?

On February 24, 2022, the Center for Medicare and Medicaid Innovation (CMMI) announced a redesign of the Global and Professional Direct Contracting (GPDC) model with the release of an RFA for providers interested in participating in the new Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model. The ACO REACH model is intended to help CMS test an ACO model that can inform the Medicare Shared Savings Program and future models by making changes to the GPDC model in three key areas:

  1. Advance health equity to bring the benefits of accountable care to underserved communities. ACO REACH will test an innovative payment approach to better support care delivery and coordination for patients in underserved communities and will require that all model participants develop and implement a robust health equity plan to identify underserved communities and implement initiatives to measurably reduce health disparities within their beneficiary populations.
  2. Promote provider leadership and governance. The ACO REACH model includes policies to ensure doctors and other health care providers continue to play a primary role in accountable care — requiring at least two beneficiary advocates on the governing board (at least one Medicare beneficiary and at least one consumer advocate), both of whom must hold voting rights.
  3. Protect beneficiaries and the model with more participant vetting, monitoring and greater transparency. CMS will employ increased up-front screening of applicants, robust monitoring of participants, and greater transparency into the model’s progress during implementation — even before final evaluation results — and will share more information on the participants and their work to improve care.

The first performance year for the ACO REACH model began on January 1, 2023, and will run for four performance years: Performance Year 2023 (PY2023) through PY2026. ACO REACH is focused on provider-based organizations and offers three types of participants:

  • Standard ACOs: ACOs comprised of organizations that generally have experience serving Original Medicare patients, including Medicare-only and also dually eligible beneficiaries, who are aligned to an ACO through voluntary alignment or claims-based alignment. These organizations may have previously participated in another CMMI shared savings model (e.g., Next Generation ACO Model and Pioneer ACO Model) and/or the Shared Savings Program. Alternatively, new organizations, composed of existing Original Medicare providers and suppliers, may be created to form a standard ACO. In either case, clinicians participating within these organizations would have substantial experience serving Original Medicare beneficiaries.
  • New-entrant ACOs: ACOs comprised of organizations that have not traditionally provided services to an Original Medicare population and who may rely primarily on voluntary alignment, at least in the first few performance years of model participation. Claims-based alignment will also be utilized.
  • High-needs population ACOs: ACOs that serve Original Medicare patients with complex needs, including dually eligible beneficiaries who are aligned to an ACO through voluntary alignment or claims-based alignment.
    • These participants are expected to use a model of care designed to serve individuals with complex needs, such as the one employed by the Programs of All-Inclusive Care for the Elderly (PACE), to coordinate care for their aligned beneficiaries.

There are two voluntary risk-sharing options under the ACO REACH model. In each option, participating providers accept Medicare claims reductions and agree to receive at least some compensation from their ACO.

  1. Professional: A lower risk-sharing arrangement — 50% savings/losses — with one payment option for participants: Primary Care Capitation Payment, a risk-adjusted monthly payment for primary care services provided by the ACO’s participating providers.
  2. Global: A higher risk-sharing arrangement — 100% savings/losses — with two payment options: Primary Care Capitation Payment (described above) or Total Care Capitation Payment, a risk adjusted monthly.

How can providers market to value-based entities?

Agencies should first identify their value proposition by determining the impacts of their services. What moves the needle on costs, quality of care, and consumer satisfaction? For agencies 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.

Outcomes could include 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 top reasons for costly hospitalizations in the elderly and chronically ill.

These evolving payment models — and expectations for home health and hospice performance — can take a toll on agencies and their staff. 

Request a demo today to learn how MatrixCare can help navigate these changes and guide you toward value-based success.

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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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