Alternative payment models show increase in new study

October 28, 2019

The Health Care Payment Learning & Action Network found an increased number of U.S. healthcare payments were tied to alternative payment models in 2018.

In 2018, 35.8 percent of total U.S. healthcare payments were tied to two alternative payment models (APMs), according to a new study from the Health Care Payment Learning & Action Network (LAN).                                       

This is an increase from 34 percent in 2017 and is part of a larger trend in healthcare payments reform since the LAN was established in 2015, when only 25 percent of healthcare payments used these APMs.

The study was built on traditional Medicare data as well as data from 62 health plans and seven fee-for-service (FFS) Medicaid states, representing a total of 77 percent of all insured people in the country.

A further breakdown of the findings shows the amount of healthcare dollars received through two specific types of APMs: APMs built on fee-for-service architecture and those built on population-based payment. The data show what percentage of payments came from these models:

  • Medicare Advantage received 53.6 percent

  • Traditional Medicare received 40.9 percent

  • Commercial insurers received 30.1 percent

  • Medicaid received 23.3 percent

Matt Eyles, president and CEO of America’s Health Insurance Plans, released a statement touting the statistics.

“The great progress in adopting advanced payment models shows how much we can achieve when the public sector and private market work together toward a common goal,” he says. “And with more than half of the payments in Medicare Advantage flowing through alternative payment models, the commitment of health insurance providers is clear. Value-based care is the future, and the private market is delivering positive, measurable change.”

During the study, 97 percent of those surveyed said they believe APM adoption will result in better quality of care while 88 percent believe it will result in more affordable care.

Also, during the LAN’s recent summit, co-chair Mark McClellan, MD, released a new set of goals focused on accelerating the transition to shared accountability APMs. These are:

Medicare Advantage & Traditional Medicare

  • 30 percent by 2020

  • 50 percent by 2022

  • 100 percent by 2025

Medicaid

  • 15 percent by 2020

  • 25 percent by 2022

  • 50 percent by 2025

Commercial

  • 15 percent by 2020; 25 percent by 2022

  • 50 percent by 2025

“We believe that these bold goals are achievable, building on the commitment and action from reformers in this room and all across the country,” McClellan is quoted as saying during his opening remarks at the summit. “While the road to significant payment reform has been challenging and takes time, there is better evidence and support driving more public and private commitment than ever before-including through the LAN.”