Study: Problems persist with APMs


Physicians continue to support advanced alternative payment models despite the fact that operational issues have not improved over the last 4 years and new ones have cropped up, according to a follow-up survey conducted by the RAND Corporation for the American Medical Association.

“All the things we heard in 2014 were still present in 2018. Both the challenges that practices had experienced back in 2014 having to do with data timeliness, data completeness and accuracy, payment model execution, all those challenges persisted,” Mark W. Friedberg, MD, senior physician policy researcher at RAND, said in an interview.

RAND surveyed 31 practices of varying practice size and specialty across six geographic regions, some of which participated in the 2014 survey. Supplemental information was provided by interviews with 32 market observers, 8 health plan leaders, 10 hospital and hospital system leaders, 10 state and local medical society leaders, and 4 chapter leaders with MGMA (formerly the Medical Group Management Association).

“We had thought we would hear that the problem had gotten a little bit better since there has been some investment in trying to tamp down the wide range of measures that are involved in these alternative payment models,” Dr. Friedberg said. “We did not see any evidence of that having any effect on the practices that participated in this study this time around.”

Indeed, concerns reported in 2014 were again reported in 2018, along with a new set of concerns, including the perceived pace of change in alternative payment models (APMs), the complexity of APMs, and physician concerns over two-sided risk models.

“Practices, especially those that participated both times, said in 2014 we had these challenges [of rapid changes in APM models] and since then, things have just gotten a lot faster,” he said, noting that doctors are complaining of models that are going through changes, sometimes without much warning. “They are changing quite rapidly from year to year. If you look at the MACRA QPP [Quality Payment Program] for example, that model changes every year to some extent and those things are hard for them to keep up with.”

Running hand in hand with the change is the complexity of the changes, a result of expanding performance measures and uncertainty with thresholds for penalties and rewards and in some ways has had little impact on improving care.

Dr. Friedberg noted that some practices are hiring people to examine APMs to devise strategic ways to choose and report data for maximum return.

“In a practice, for example, if their quality of care was already very good, what these folks ended up doing was help them choose measures and work the attribution algorithms in a strategic way to either guarantee a bonus or minimize the risk of incurring a penalty,” he said.

He also noted that practices appear to becoming more risk averse.

“We heard a lot more of the following thing, which is that if [practices] were in a two-sided risk model, several of them reported trying and succeeding in some cases offloading the downside risk to partners,” Dr. Friedberg reported. “And what this resulted in was that the practice, even though from the payer’s perspective they are in a two-sided model, the practice was actually in a one-sided model with a partner who is taking all of the downside risk and a portion of the upside risk, leaving a small upside risk proposition that remained for the practice.”

He said the range of partners that were absorbing the downside risk included hospitals, device manufacturers, consulting companies, or private equity firms.

Despite the concerns surrounding APMs, Dr. Friedberg said that “we did not hear practices broadly saying that they just weren’t interested in alternative payment models. In general, practices still remained pretty enthusiastic about these alternative payment models in theory. If they could be made simpler, if the pace of change weren’t quite so fast, that they would have a chance to really do some important care improvements in alternative payment models.”

He noted some of the surveyed practices were able to make investments in care as a direct result of participating in APMs, such as in behavioral health capabilities in primary care, for example, leading to quality of care improvements.

However, these issues could reveal a future unwillingness to participate in APMs, especially two-sided risk models, something at least the Centers for Medicare & Medicaid Services are pushing for as a stated goal of the QPP is to get practices to participate in APMs and take on more risk.

The growing aversion to taking on downside risk could lead practices to simply stay in fee for service and simply take the payment penalty because it is a fixed amount that can be planned for, as opposed to the fluctuations of bonuses and penalties that comes with a rapidly changing APM environment, Dr. Friedberg said.

Going forward, the report makes a number of recommendations to help create an environment that would potentially make APMs more successful, including simplifying the models; creating stable, predictable, and moderately paced pathways to APM participation; making data available in a more timely fashion; minimizing downside risk or helping practices better manage it; and designing APMs that will encourage clinical changes to help improve the effectiveness of care delivered.

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