MedPAC recommends streamlining alternative pay models

The Medicare Payment Advisory Commission (MedPAC) is recommending that the Centers for Medicare & Medicaid Services (CMS) implement a smaller portfolio of alternative payment models (APM).

The recommendations come as part of MedPAC’s June 2021 Report to the Congress: Medicare and the Health Care Delivery System; released earlier this week.

The report recommends that CMS create a smaller, more harmonized portfolio of APMs which are designed to work together. This would result in less overlap, and when overlaps do exist they can be designed so that incentives do not diminish in strength when combined with other models.

MedPAC also recommends that CMS could minimize complexity by using consistent model parameters, like consistent methods for calculating spending targets and measuring quality, across the entire portfolio of APMs, according to the report.

The report notes that most of the APMs are operated by the Center for Medicare and Medicaid Innovation (CMMI) excluding the largest APM, the Medicare Shared Savings Program. The APMs under the control of CMMI are temporary demonstrations which could be expanded to permanent programs if they reduced spending in Medicare, Medicaid, or CHIP while maintaining quality care or increasing quality without increasing spending.

Since the CMMI’s establishment a decade ago, the strategy of implement a wide range of models has given the agency a chance to amass data on what works and what doesn’t, but continuing to test a lot of APMs will likely inhibit the development of APMs, the report says.