NHPCO NewsLine Fall 2021 - 16

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PAYMENT MODEL PRIMER
There are many new payment models emerging as
healthcare transitions from fee-for-service (FFS) to
value-based payment models. Value-based care is
sometimes referred to as pay for performance (P4P).
FFS is the traditional payment model where when a
service is provided, a bill or insurance claim is
generated, and the provider of the service gets paid.
The more services a provider performs, the more they
get paid. Volume of service is incentivized, even if that
service is not producing the desired outcome.
Under value-based payment models, positive outcomes
of the service are incentivized over volume. A provider
gets " paid more " if they achieve a desired outcome,
especially if it was done efficiently. There is a full
continuum of value-based models ranging from
bonus payments for quality metrics to shared risk/
shared reward to fully capitated payments where the
provider takes on full financial and clinical
responsibility for a patient. Through the CMS
Hospice Benefit, hospices have always been fully
capitated, another reason why hospices are well
positioned within the emerging healthcare landscape.
Recent indications from CMS point to a move to
accelerate the transition from FFS to value-based
payment models and perhaps move it to becoming
mandatory for providers. The following list explores
some of these options, though new payment models
are emerging, and others may be available within
your healthcare care network.
ACO - Accountable Care
Organization
ACOs are groups of providers that take on quality
and cost accountability for Medicare FFS patients
assigned to them. For this they receive enhanced
administrative flexibility and can share in upside, and
sometimes downside, risk, as well as quality incentive
payments. There are many types of ACOs, but most
of these models have ended or will end soon. Direct
Contracting is being seen as the next step for ACOs.
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Newsline / Fall 2021
The ACO models include:
▌ Medicare Shared Saving Program (MSSP) is an ACO
caring for FFS Medicare beneficiaries. There are
currently 477 MSSP ACOs.
▌ ACO Investment Model is for MSSP ACOs in rural
and underserved areas and employs pre-paid saving
arrangements. There are currently 45 Investment
ACOs but this program has ended.
▌ Advance Payment ACO Model is for MSSP ACOs
who need capital to invest in infrastructure and
staff. There are currently 35 Advance Payment ACOs
but this program has ended.
▌ Comprehensive ESRD Care Initiative is for ACOs
caring for patients receiving dialysis treatment.
There are currently 33 Comprehensive ESRD ACOs
but this program is ending this year.
▌ Next Generation ACO Model (NexGen ACO) is for
ACOs who have demonstrated more experience and
care management ability than a MSSP ACO and
allows them to take on more risk and higher
financial rewards. There are currently 35 NexGen
ACOs but this program is ending this year.
▌ Pioneer ACO Model moves from shared savings into
a population-based payment model which more
closely aligns with private payers' provider
incentives. There are currently 9 Pioneer ACOs but
this program has ended.
Hospices and other palliative care providers can
contract with ACOs to offer non-hospice services and/or
to become a preferred hospice provider which will help
an ACO meet their savings and quality incentives. More
information on ACOs is available from CMS online.
VBID - Value Based
Insurance Design
Medicare Advantage (MA) plans are private insurances
who have contracted with CMS to offer Medicare
beneficiaries an alternative to traditional FFS
Medicare. In addition to covering all Medicare services
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO
NHPCO NewsLine Fall 2021

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