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Are Value-Based Payments Unfair to Some Providers?

If providing healthcare to the aged, the homeless, the unemployed, the uninsured and the educationally challenged can be considered a good deed, current value-based payment models appear to substantiate the adage that no good deed goes unpunished.

That’s the theme of at least three recent studies, the first of which comes from the General Accounting Office (GAO). The GAO is recommending that the Centers for Medicare & Medicaid Services (CMS) take a hard look at the formula it uses to calculate hospitals’ total performance scores under the current Hospital Value-Based Purchasing (HVBP) program.

From fiscal years 2013 through 2017, safety net hospitals — those that serve large numbers of low-income patients — appear to have been inappropriately penalized under the formula, the study suggests, while small rural and small urban hospitals may have been inappropriately rewarded.

Exacerbating disparities?

The second study, published in the Annals of Internal Medicine, concluded that CMS’ value-based payment modifiers affected practices serving higher- and lower-risk patients in ways that have the “potential for Medicare’s pay-for-performance programs to exacerbate health care disparities.”

Eric Roberts, an assistant professor of health policy and management at the University of Pittsburgh Graduate School of Public Health and the lead author of the second study, says things will only get worse for poor people in need of medical care, unless the value-based payment models are modified. And modifying them won’t be easy, he says.

“Risk adjustment is usually inadequate in these programs,” he says, “in part because it is difficult to measure the differences in complexity of patients across providers.”

For example, one key performance measure in the value modifier that’s intended to assess practice quality is hospital admissions for ambulatory care sensitive conditions — conditions, that is, that should be manageable in community-based health care settings, and that shouldn’t require hospital admission. But CMS, he says, fails to consider that disabled and poor patients, as well as those with long-term clinical comorbidities, are more likely to require admission.

It’s virtually impossible, he adds, to provide for all of the relevant predictors of health care use and spending that are needed to separate provider performance from the influences of patient mix. “No amount of risk adjustment is going to completely mitigate the problem in the value modifier,” he says. “Practices that serve sicker and poorer patients are going to get penalized.”

At particular risk

A third study, published in JAMA, concludes that as value-based payment programs “increase in size and scope, practices that disproportionately serve high-risk patients may be at particular risk of receiving financial penalties.”

The study was based on data from CMS’s Medicare Physician Value-Based Payment Modifier (PVBM) Program, a forerunner to the Medicare Access and CHIP Reauthorization Act (MACRA) that penalized or rewarded physicians based on quality outcomes and cost of care. Medical risk was associated with worse quality and higher costs, the study found. Furthermore, it points out, “high social risk” patients may face challenges regarding transportation, food, housing, and security, all of which are likely to affect outcomes, but none of which are measured in Medicare claims.

Closing the gap

There are always going to be disadvantaged patients. And value-based reimbursements that may not properly account for them aren’t going away.

Fortunately, the comprehensive population health management solutions offered by CareThrough are designed to close the gaps that can lead to poorer outcomes and reduced reimbursements.

CareThrough’s navigators offer peer-level support to patients who are overwhelmed by the challenges of daily living. They’re trained to listen carefully and to alert doctors to events and situations that may otherwise go unrecognized. By building relationships with patients, they’re able to collect and convey data regarding changes in health status, nutrition, medication and care adherence, and other potential pitfalls.

Navigators are also trained to coordinate care and motivate patients to strive for successful outcomes.

In short, they help break down the barriers that have long contributed to health care disparities, and make sure that the practitioners who serve high-risk patients aren’t penalized for doing so.

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