Study: Value-Based Programs May Harm Practices That ‘Disproportionately Serve High-Risk Patients’

07 Aug 2017 | SOURCE: Health Care Dive

Value-based payment programs may financially harm practices that disproportionately serve high-risk patients.

  • A new JAMA report that reviewed the first year of the Medicare Physician Value-Based Payment Modifier (PVBM) Program found providers who served “more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs.”
  • The finding led to fewer bonuses and more penalties for high-risk practices.
  • The study authors said value-based payment programs may financially harm practices that “disproportionately serve high-risk patients.”



CMS created the PVBM to measure the quality and cost of care provided to Medicare beneficiaries. The program bases payments on providers’ performance on quality and cost measures and rewards quality performance and lower costs.

The agency began to phase in practices to the program in 2015 based on 2013 performance and then planned to expand it to solo practices and later to physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists.

The study reviewed 899 physician practices with nearly 5.2 million beneficiaries that participated in the PVBM, a mandatory pay-for-performance program. Authors studied program payments in 2015 and compared them to 2013 fee-for-service (FFS) Medicare numbers.

The JAMA study’s finding that more medically high-risk patients had lower quality and higher costs is eye-opening. Those patients are usually the most costly and payment models will need to figure out ways to reduce those costs while not penalizing physicians if value-based programs are successful. A payment model that only lowers costs and improves care to healthy people won’t move the needle.

Even worse, if physicians are penalized, what incentive do doctors have to care for the sickest Medicare patients?

The JAMA report will likely not quell physician fears about how value-based programs may lead to lower Medicare payments. It also won’t satisfy individuals concerned that changes to the healthcare system may harm the most vulnerable, which is always a worry when there are major healthcare changes.

The JAMA study isn’t the first to show value-based programs as a mixed bag. Recent studies have shown that it hasn’t consistently improved outcomes and costs.

One key finding about value-based care so far has been that experience in the model plays an important role in whether a provider has success. Organizations with the most success under value-based programs have often spent years creating clinically integrated networks, James Landman, director of healthcare finance policy at the Healthcare Financial Management Association, recently told Healthcare Dive.

“If you look at the data for the Medicare Shared Savings Program, which is the biggest of the ACO programs under CMS, there is a correlation between time spent in the program and the ability to generate savings,” Landman said.

CMS is watching the results of value-based payment models like PVBM closely. The federal agency hopes to transfer 50% of traditional FFS Medicare payments to alternative payments models by next year.

CMS has slowed down the move to value-based payments, but that’s more due to the change in administration and slowly grinding gears of government than a move away from value-based programs.The federal agency has delayed the start of some programs to next year as well as paused expanding others.

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