Evidence lacking that Medicaid APMs deliver on promises of reduced costs, better quality

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More states are adopting value-based reimbursement models for Medicaid, but there’s limited evidence on how these alternative payment models (APMs) back up claims of reducing costs while improving care quality.

In analyzing 45 APMs across 28 states, Deloitte found research has yet to demonstrate the models’ impact on outcomes and expenditures.

“Although many state initiatives are underway, relatively few have been evaluated for their impact on total cost of care or health outcomes,” the Deloitte report said.

Though these programs are in use in an increasing number of states, the analysis found information on these initiatives is “fairly limited,” with most research focused on measuring operational success in terms of implementation milestones, like how many providers are using electronic health record technology or how many quality metrics are being reported.

Data quantifying savings from Medicaid APMs, was rare, the analysis said, with information on outcomes “typically limited and more likely to be self-reported or anecdotal.” The analysis said there could be several explanations for this dearth of data, ranging from evaluations being too expensive to the models simply being too new. It also may be difficult to draw conclusions about one program when states have several concurrent value-based initiatives.

“As the U.S. healthcare system transitions from paying for volume to paying for value, the number, types, and prevalence of APMs continue to increase. With many models being implemented concurrently, it can be difficult for evaluators to attribute outcomes to a specific model or identify drivers of success (or failure),” the analysis said.

Here’s what the analysis found about existing data on four of the most common types of Medicaid APMs:

  • Patient-centered medical home (PCMH): In use in 29 states, findings on this primary care-focused organization model have been mixed. One study of Vermont’s PCMH program found it saved $482 per year per participant, but found no differences in quality beyond one diabetes measure. An evaluation of a federal model, the Multi-payer Advanced Primary Care Practice (MAPCP) demonstration, found no states significantly slowed growth rates for Medicaid expenditures, but some states had varying success on reducing emergency department visits.
  • Medicaid Health Homes: In use in 21 states, this model had a stronger track record of success. The analysis said providers saw improved care coordination, integration and member engagement. At the state level, Missouri’s program reduced both utilization and cost. In Ohio, however, a program targeted at patients with serious mental illness resulted in a $561 per-member, per-month overall increase for Medicaid program costs, though there was also “significant improvement” in outcomes like diabetes and hypertension control.
  • Medicaid accountable care organizations (ACOs): In use in 10 states—with others like Massachusetts soon to follow—only two state-level Medicaid ACOs, in Colorado and Oregon, have been widely studied. In Colorado, Medicaid costs were reduced by an average of $60 per person per month, with great geographic variation. Oregon’s program was credited with meeting the CMS goal of reducing Medicaid spending growth below the 3.4 percent annual target. Neither showed significant differences in quality measures.
  • Episode of care payments: In use in only three states in 2016, these bundled payment initiatives did result in some improvements in Arkansas, the only states where an evaluation of the program was published. Despite some decreases in areas like rate of cesarean sections and costs of treating Attention-deficit/hyperactivity disorder, the analysis said there may be an insufficient number of Medicaid patients to achieve savings through these bundles, unless they’re focused on conditions prevalent in that population.

With such mixed results, the analysis recommended that these models “evolve” to incorporate two-sided financial risk, as well as align their requirements to qualify for the 5 percent incentive payment as an Advanced APM under the Medicare Access and CHIP Reauthorization Act (MACRA).