Wed Sep 25 03:47:48 UTC 2024: ## CMS’s Alternative Payment Models: Good Intentions, Limited Results

Despite the launch of over 50 alternative payment models (APMs) by the Centers for Medicare & Medicaid Services (CMS), only six have shown statistically significant cost savings, with only four meeting the criteria for expansion. While the aim is to achieve higher quality healthcare at lower costs, these results indicate that APMs are falling short of their goals.

A recent analysis by Patel, Jain and Mate, published in Health Affairs Forefront, points to three key shortcomings of the current APM approach:

**1. Inadequate Data Utilization:** The authors argue that risk adjustment, currently based on pre-episode patient information, should be updated to reflect changes in clinical or social needs throughout the episode. Additionally, they advocate for incorporating exogenous trigger events like housing evictions, sudden unemployment, and natural disasters into episode length adjustments. While this approach has merit, concerns remain about its feasibility and potential for misuse.

**2. Misaligned Incentives:** Despite evidence showing the benefits of holistic and integrated care, APMs lack sufficient incentives for providers to deliver such services. The authors propose rewarding providers for remote patient monitoring, care team coordination, and equity-focused care plans. However, these measures, while valuable, do not directly incentivize improved outcomes or cost reduction.

**3. Institutional Inertia:** The authors advocate for a Plan-Do-Study-Act (PDSA) approach to quality improvement and increased reimbursement for information sharing. While PDSA holds promise at the provider level, mandating it from a payer perspective could create unnecessary bureaucratic burdens and lead to mere documentation exercises, increasing costs for providers.

In conclusion, while the authors identify critical issues with APMs, their proposed solutions, while potentially beneficial at the provider level, may prove ineffective if implemented as payer mandates. Nonetheless, their analysis offers valuable insights and encourages further creative exploration of ways to enhance the effectiveness of APMs.

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