On July 20, 14 leading national healthcare associations, in a letter, praised the reintroduction of a bipartisan House bill that will accelerate Medicare’s move to value-based payment by boosting accountable care organizations (ACOs) and other alternative payment models (APMs). The Value in Health Care Act was introduced on Tuesday by Reps. Peter Welch (D-Vt.), Suzan DelBene (D-Wash.), Darin LaHood (R-Ill.), and Brad Wenstrup (R-Ohio).
The bill, called the Value Act for short, strengthens the Medicare Shared Savings Program by updating the program to recognize and reward ACOs. Specifically, the bill increases shared savings rates, updates risk adjustment rules, eliminates the artificial distinction between “high” and “low” revenue ACOs, addresses ACOs’ “rural glitch,” and restarts the ACO Investment Model. The bill also reinforces the shift to value-based care by extending the 5 percent Advanced APM incentive payments for an additional six years and authorizing a study of the overlap of various Medicare alternative payment models. The bill lastly mandates a report by the Government Accountability Office on health outcomes and racial disparities in Medicare patients cared for by ACO participants compared to traditional Medicare and not assigned to any other APM.
The letter was signed by AHIP, American Academy of Family Physicians, American College of Physicians, American Hospital Association, American Medical Association, America’s Essential Hospitals, AMGA, America's Physician Groups, Association of American Medical Colleges, Federation of American Hospitals, Health Care Transformation Task Force, Medical Group Management Association, National Association of ACOs, and Premier Inc.
“Dear Reps. Welch, DelBene, LaHood, and Wenstrup:
On behalf of the undersigned organizations, we thank you for your leadership to ensure that value-based health care continues to serve Medicare patients by embracing higher value and lower cost. The Value in Health Care Act of 2021 makes a number of important reforms to strengthen Medicare’s value-based care models and Accountable Care Organizations (ACOs) to ensure that these models continue to produce high quality care for the Medicare program and its beneficiaries as well as to generate savings for taxpayers. With estimates showing almost 40 percent1 of healthcare dollars are tied to value-based payment and goals to increase that percent moving forward, the value-based care movement is at a critical juncture. The policies in this bipartisan bill are more important than ever given lessons learned about our nation’s health care system as we emerge from the COVID-19 pandemic. ACOs and other alternative payment model (APM) participants have been on the front lines supporting clinicians and patients throughout the COVID-19 crisis. As part of their commitment to value-based care, ACOs and APM participants were already utilizing many of the tools which have been key to managing the COVID-19 crisis—such as care coordinators, remote monitoring, data analysis and aggregation, and patient tracking. They were able to quickly and effectively deploy these same resources to manage patient populations throughout the pandemic. Additionally, the disproportionate impact of COVID-19 on the Black, Latino, and other communities highlights the need for program improvements, such as fair and accurate risk adjustment.”
In addition, “The reforms in this legislation will further strengthen ACOs and APMs and ensure their continued success. We are pleased that the bill provides appropriate shared savings rates, modifies risk adjustment methodologies, removes barriers to participation, ensures fair and accurate benchmarks, and provides educational and technical support for ACOs. The bill also makes important steps to reinforce the transition to value through extending and modifying Advanced APM bonuses and addressing aspects of APM overlap. To advance goals of addressing health inequities, the bill directs a study of the impact of value-based care on health equity. These reforms will ensure that value-based care models continue to be viable for physician and hospital participants. Thank you for your leadership on these important issues. This bill is a comprehensive approach that will strengthen our country’s value-based care program and ensure high quality, lower cost care for our nation’s patients.”
Jerry Penso, M.D., president and CEO of AMGA, one of the 14 cosignatory organizations, said in a statement that “ACOs have proven that Medicare can successfully move the program into value. This bill ensures the sustainability of the ACO program through modernization of its regulatory framework, as well as provides stability in value-based programs by extending the soon expiring APM incentive program in Medicare. Reintroduction of the Value Act is certainly a step in the right direction,” Penso stated.
And, in a statement posted to his company’s website, Premier’s senior vice president for public affairs, Blair Childs, stated, “The Premier healthcare alliance applauds Reps. Peter Welch (D-VT), Suzan DelBene (D- WA), Darin LaHood (R-IL) and Brad Wenstrup (R-OH) for recognizing the need to continue to incent providers to transition from fee-for-service payment to value. In particular, we are very pleased to see our long-standing recommendations included via this concrete legislative proposal, including extending provider bonuses an additional six years. We believe these incentives will encourage additional providers to participate in Alternative Payment Models (APMs) and ultimately speed the transition away from the perverse incentives inherent in fee-for-service reimbursement. We also commend the Representatives for making improvements to the Medicare Shared Savings Program, including increasing the shared savings rate and removing distinctions that place hospital-led ACOs at a disadvantage,” Childs said.