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Disadvantaged Patients in Value-Based Payment Programs

Eastman, Peggy

doi: 10.1097/01.COT.0000494619.26994.9f
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value-based payment

value-based payment

WASHINGTON, D.C.—As the Centers for Medicare & Medicaid Services (CMS) moves toward new regulations on value-based reimbursement for Medicare patients, concern has been raised about under-payment of health care providers who serve populations with disproportionately high social risk factors.

Social risk factors may include income, education, race and ethnicity, reduced access to care, dual eligibility (Medicare and Medicaid), language and place of birth, low health literacy, risky behaviors such as smoking, gender identity, living alone, and environmental factors such as living in substandard housing and/or an unsafe neighborhood.

A new report from a committee of the National Academies of Sciences, Engineering, and Medicine explores ways of preventing this provider payment imbalance. The report, Accounting for Social Risk Factors in Medicare Payment: Criteria, Factors, and Methods, makes the point that since providers who mostly serve vulnerable, at-risk populations are likely to have fewer resources to begin with, and care for patients who require more resources to achieve good outcomes on quality measures, they could fare poorly on CMS quality ratings. If so, this imbalance could simply increase U.S. health disparities—which no one wants to see.

The committee did not make recommendations, but studied how social risk factors could be incorporated into value-based Medicare reimbursement in a fair way for health care providers. Their report is the third in a series of five reports requested by the U.S. Department of Health and Human Services in response to concerns about health equity and accuracy in publicly reported performance measures.

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Health Disparities in Cancer

The unintended increase in health disparities caused by value-based Medicare payment could be a special problem in oncology, where those with social risk factors—especially minorities—tend to be diagnosed at later stages and have lower survival rates. According to American Cancer Society statistics, African-Americans have the highest cancer death rate and the shortest cancer survival rate of any racial-ethnic group in the U.S. for most cancers. A review from the University of Michigan Comprehensive Cancer Center (Journal of the American College of Surgeons 2010; 211:105-113) found the following:

  • blacks with cancer are up to two times as likely as those from other races to die from their disease;
  • blacks are more often diagnosed with advanced cancer and are more likely to have other underlying health conditions; and
  • hospitals that treat primarily black patients tend to have fewer resources and offer lower quality care.

“Accounting for social risk factors in Medicare payments is not intended to obscure disparities that exist, but rather bring disparities to light,” said committee Chair Donald M. Steinwachs, PhD, Professor at the Center for Health Services and Outcomes Research, Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore. “Payment systems should include sufficient incentives for quality improvement for both socially at-risk populations and to patients overall.”

In considering how social risk factors might have an impact on value-based Medicare reimbursement, the committee considered these criteria:

  • whether the social risk factor is related to the patient's outcome;
  • whether the social risk factor precedes health care delivery and is neither a consequence of the quality of care nor modifiable by health provider actions; and
  • whether the social risk factor is not something the health provider can manipulate.

The committee noted the Medicare fee-for-service payment system, which CMS is moving away from, has certain disadvantages when it comes to serving patients with social risk factors. These include the following: under fee-for-service, providers and insurers have incentives to avoid serving disadvantaged patients; there is underpayment to providers who disproportionately serve socially at-risk populations; and there is underinvestment in quality of care for these patients.

In the best-case scenario, if value-based payment programs are constructed well, they could potentially decrease health disparities. The committee's new report states a payment system that takes into account social risk factors should and could accomplish four policy goals:

  1. reduce disparities in access, quality and outcomes;
  2. achieve quality improvement and efficient care delivery for all patients;
  3. provide just and adequate public reporting; and
  4. compensate health providers fairly.

The committee said such a payment system should include transparency and accountability for overall performance and for performance with respect to socially at-risk members of the population; accurate performance measurement—with high reliability and without bias (systematic error) related to differences in the populations served; and incentives for improvement overall and for socially at-risk groups, both within reporting units (such as the provider setting that is being evaluated—hospitals and health plans) and between reporting units.

To accomplish these goals, the committee identified four possible strategies:

  1. stratified public reporting, which seeks to make overall quality visible to consumers, providers, payers and regulators;
  2. adjustment of performance measure scores, which accounts for social risk factors statistically in an effort to more accurately measure true performance;
  3. direct adjustment of payments, which explicitly uses measures of social risk factors in payment but by itself does not affect performance measure scores; and
  4. restructuring incentive design in order to implicitly account for social risk factors in payment.
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Concerns About MACRA

At a recent briefing on Capitol Hill sponsored by the Alliance for Health Reform, several speakers expressed their concerns about potential unintended consequences of Medicare value-based care; the Medicare Access and CHIP Reauthorization Act (MACRA) will implement new regulations on Medicare value-based payment in 2017. A major concern is that MACRA could accelerate consolidation of health care providers and create difficult challenges for small practices. CMS must “provide protection for smaller independent practices to meet regulatory requirements and mitigate further provider consolidation under MACRA,” said Donald R. Fischer, MD, MBA, a health care consultant who recently retired as Senior Vice President and Chief Medical Officer at Highmark Blue Cross Blue Shield. If small practices that serve disadvantaged Medicare patients are not protected, it could be especially devastating for their patients.

A new report from the National Center for Policy Analysis (NCPA), a nonprofit, nonpartisan public policy research firm, also has major concerns about how MACRA could adversely affect Medicare beneficiaries. For consumers, MACRA's increased federal control over the practice of medicine could translate into “higher costs and more difficulties getting access to timely and quality care,” warned NCPA Senior Fellow John R. Graham, MBA.

The views and values of all patients must always be considered and honored in value-based payment reform, said other speakers at the Capitol Hill briefing.

“Patients and families should be viewed as partners in all [payment] transformation efforts, from point of care to governance,” emphasized Stephanie Glover, MPA, Health Policy Analyst with the National Partnership for Women & Families, a nonprofit, nonpartisan advocacy group dedicated to promoting access to quality health care, among other aims. She said alternative payment models “should be built upon a strong foundation of robust consumer protections that ensure consumer needs are met and that safeguard consumer rights and access to care.”

Glover added, “As CMS continues to develop new models of care and payment and providers take on increased risk, reward and responsibility, the agency must ensure that the evolution and application of consumer safeguards are keeping pace.” Safeguarding patients' rights and assuring access to care is especially important when providing treatment to the most vulnerable populations in the nation.

Medicare quality measurement and reporting should be “meaningful, actionable and transparent to consumers, patients and family caregivers,” Glover emphasized. And, she said, quality-measure data sets “should include the use of measures derived from patient-generated data that address both care experience and outcomes.”

Peggy Eastman is a contributing writer.

Wolters Kluwer Health, Inc. All rights reserved.
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