On April 4, 2018, Sheryl Tatar Dacso presented on a white paper she co-authored titled, “Value-Based Purchasing and Bundled Services/Payments – Reconciling Interests of Participating Providers” at The University of Texas School of Law's 30th Annual Health Law Conference.
With increasing pressure to do more with less, health care systems are continuing to focus efforts on finding innovative ways to increase quality while reducing costs. One ongoing trend is the movement toward innovative incentive payment models, including value-based care purchasing and bundled payment arrangements. The goal of such models is to achieve cost reductions based on a higher level of patient care coordination.
Despite 2017 bringing a fair amount of political uncertainty regarding the Centers for Medicare & Medicaid Services (CMS)’s commitment to value-based reimbursement and bundled payment arrangements, for the time being, it appears these alternative payment models are here to stay. The new Secretary of Health and Human Services (HHS), Alex Azar, has re-affirmed his support of value-based care. While the Trump Administration is not pursuing alternative payment models as ambitiously as the Obama administration, they are not backing away either – recognizing the need to continue cost reductions while moving away from strictly fee-for-service payment models. Additionally, we are seeing more commercial payors, employer self-funded plans and provider organizations continue to move forward with value-based payment models fueled by the incentives of the Affordable Care Act (ACA) for development of Accountable Care Organizations (ACO).
In this paper, we will look into how value-based care and alternative pricing arrangements are structured and discuss the options and challenges associated with potential risk sharing, legal and practical considerations.