‘Dramatic slowdown’ in value-based care transition—and how Congress can jumpstart it

Members of the American Medical Group Association (AMGA) reported the transition to value-based care is slower than expected, with more multispecialty medical groups and integrated systems predicting fee-for-service (FFS) payments will take up a greater percentage of revenues in the next few years than originally projected.

That doesn’t mean the transition has stopped. According to the AMGA survey, it’s still occurring and most members reported they’re ready to accept the downside risk within the next two years. FFS revenues are expected to decline by 20 percent by 2018, with risk revenues increasing by anywhere from 20 to 152 percent in the same time frame.

AMGA members had expected to be further along on the transition according to the 2015 survey results, and they are now making less optimistic projections for 2017 and beyond. They expect 71 percent of their commercial revenues to come from FFS next year, compared to the 59 percent they had predicted in 2015.  

“These indicate to us that there is real slowdown in the transition to value,” said AMGA Vice President of Policy Chet Speed.

The survey respondents blamed the slowdown on the same barriers to value-based care identified in 2015. One issue is a lack of commercial risk products, with 64 percent of respondents saying fewer than 20 percent of local insurers offer risk products in their market, with 18 percent saying none were available in their area.  

Another barrier is not being able to access data in a timely manner.

Heidi Duncan, MD, of the 450-physician Billings Clinic, Montana’s largest health system, said even though it’s made major investments in health IT to ease the transition, it has issues accessing data from across the region, and lacks real-time claims data from other hospitals or clinics a patient may visit.

Duncan offered a knee replacement patient as an example of how these barriers interfere with value-based care.

“We can tell you what the cost of joint might be,” Duncan said, “but if our patient then goes back to their local hospital and gets readmitted for infection and we’re responsible for managing the life of that patient, the cost of that patient, but we don’t know about this readmission, we can’t manage that person’s health and take risk for that in a very effective manner.”

The proliferation of reporting requirements is also an issue, according to Duncan, saying some require manually entering data from charts, using up more of a system’s time and resources.

Based off these results, the AMGA survey offered several policy recommendations to Congress to speed up the transition to value-based care:

• Require insurance companies to offer access to claims data.
• Require insurers and providers to standardize the data submission and reporting process.
• Create a tax-free account groups could use to buy needed infrastructure and cover early losses for value-based contracts.
• If there aren’t enough risk products available, allow an advanced alternative payment model (APM) with the Quality Payment Program to qualify for the 5 percent APM incentive payment.
• Allow all accountable care organizations, including Track 1 ACOs, into advanced APMs.

“We believe that if these issues aren’t addressed by the federal policymakers, the transition to value will be unnecessarily slowed or maybe even grind to a halt,” Speed said. “We’re hearing for the first time members say, ‘We’ve soon this show before in the '90s when managed care came in with a bang and left with a whimper.”