Providers need a harder nudge toward alternative payment models

Fee-for-service may have to be made less attractive, says former MedPAC chair
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The mostly voluntary aspects of alternative payment models for providers could make it harder for Medicare to reap future savings, according to the former chairman of the Medicare Payment Advisory Commission (MedPAC).

Glenn Hackbarth, in a blog post for Health Affairs, wrote that the new payment models promise improvements in quality and efficiency. However, because participation is voluntary, he said many providers are tempted to "keep one foot on the sturdy and familiar 'dock' of fee-for-service (FFS) while the other foot is tentatively placed in the 'boat' of an alternative payment model (APM). Should the APM boat be deemed too risky, the provider may dive back to the safety of the dock."

Therefore, he said it is up to the Centers for Medicare & Medicaid Services to make APMs more attractive to providers.

Hackbarth said Medicare needs to give providers a bigger push toward APMs. One way to do this is to make APMs more fiscally attractive while making FFS less attractive. He suggested the agency boost incentive payments under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), after 2026, particularly for APMs versus FFS. MACRA is the replacement for the failed sustainable growth rate (SGR) payment formula for doctors.

The final rules for MACRA have yet to be released, although acting CMS Administrator Andy Slavitt has said providers should be pleased by what they will include. But the consensus is that over the long-term, some doctors will not be able to avoid some pay cuts even with SGR no longer in place.

Alternatively, he said, CMS could also provide more incentives for Medicare recipients to enroll in Medicare Advantage plans. 

"The government's contribution toward coverage could be based on the average bid submitted by private plans and by traditional Medicare. Beneficiaries opting to enroll in plans with higher than average costs, including traditional Medicare, would pay more," Hackbarth suggested.

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