Understanding the Future of APMs and MIPs

May 2021

The new Director of the Center for Medicare and Medicaid Innovation (CMMI), Liz Fowler, recently stated that the healthcare system is at a “critical juncture in the path to value-based care.” At the beginning of 2021, CMS placed five payment models under review, delaying or pausing their implementation, and announced that it is no longer accepting new applications for other models.

Fowler explained that CMMI is “thinking more creatively” to handle the increasing complexity of payment models and wants providers to engage more in value-based care. She stated that CMS will focus on implementing fewer but more targeted models, aligned with October 2020 Medicare Payment Advisory Commission recommendations that CMMI condense its demonstrations and establish long-term goals for alternative payment models.

Healthcare entities are also committed to advancing value-based care. Provider groups recently signed a letter asking to open up a second application period for the Direct Contracting Payment model. In Oregon, forty healthcare organizations, including health systems and insurers, have agreed to connect 70% of their payments to capitation and APMs over the next few years. A blog in Health Affairs also advocates that CMMI make the Next Generation Accountable Care Organization (ACO) model a permanent option for ACOs, given its success in achieving financial savings and improving quality. Other stakeholders agree – 14 organizations submitted a letter to the Department of Health and Human Services to extend the Next Generation ACO model through 2022 and establish a permanent full-risk ACO option. The model is currently on track to sunset at the end of 2021.

In short, the commitment to value-based care remains, as the specific models and mechanisms to improve value continue to evolve.

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